Fund­ing a fu­ture

Finweek English Edition - - MONEY CLINIC -

PEO­PLE FROM ALL spheres of life, cul­tures and back­grounds recog­nise the need for plan­ning in or­der to give chil­dren and other loved ones the op­por­tu­nity to study. While not all grad­u­ates will find their dream jobs im­me­di­ately on com­ple­tion of their stud­ies, it is gen­er­ally true that a good ter­tiary ed­u­ca­tion will pro­vide a per­son with the best chance pos­si­ble for start­ing a ca­reer.

How­ever, very few de­ci­sions in life do not re­volve around money and the de­ci­sion of whether to study or not is no ex­cep­tion. Sav­ing for an ed­u­ca­tion may seem over­whelm­ing when you are al­ready bur­dened by monthly mort­gage and car pay­ments, school fees, petrol/trans­porta- tion costs, ris­ing food prices, etc. So how ex­actly does one tackle this prob­lem? First, it is im­por­tant to re­alise that even if one can­not save the to­tal amount re­quired to fund a full univer­sity tu­ition, ev­ery bit saved will help when your child wants to study af­ter school. Any short­fall may be funded with a study loan and stu­dents can also earn ad­di­tional in­come from part-time work while study­ing.

Se­condly, the ef­fect of com­pound in­ter­est makes it more efficient to start early than to save a lot later. Gen­er­ally speak­ing, you will be bet­ter off if you start sav­ing a small amount reg­u­larly be­fore the child goes to school for the first time, than if you save a large amount later when s/he goes to high school.

While there are many dif­fer­ent in­vest­ment ve­hi­cles avail­able on the mar­ket, most peo­ple use ei­ther unit trusts or an en­dow­ment to save for ed­u­ca­tion. A qual­i­fied fi­nan­cial plan­ner will be able to as­sist you in se­lect­ing the best in­vest­ment ve­hi­cle for your needs.

In or­der to make the dream of ed­u­ca­tion a re­al­ity, hard work (which in­cludes mak­ing sac­ri­fices) is re­quired from both chil­dren and par­ents. Mark Twain, the Amer­i­can writer and hu­morist (1835-1910) said:

“ The se­cret of get­ting ahead is get­ting started. The se­cret of get­ting started is break­ing your com­plex over­whelm­ing tasks into small man­age­able tasks, and then start­ing on the first one.”

The first task in solv­ing the ed­u­ca­tion dilemma is to start sav­ing to­day!

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