Planning and saving funds that will be used to pay for children's school fees is one of the most important financial responsibilities for parents. Investing in your child's education means you are guaranteeing your child's future while also giving them the strength to pursue their dreams and aspirations.
Explore the following variety of useful information and tips to help you prepare for your children's education costs effectively to encourage their success in the future.
Scope of Children's Education Costs
Costs for children's education include many things, not just school fees. This fee covers all expenses to facilitate your child's education from elementary school, middle school, high school, to college.
Funds that need to be prepared include school entrance fees, monthly fees, supporting funds in the form of books or activities outside of school. For children at a higher level of education, you need to prepare additional funds such as transportation funds and boarding fees if the child goes to school in another city or even country.
Steps for Preparing Education Funds
The process of preparing education costs needs to be done well in advance. To ensure that the money you need is ready when the time comes, you need to take the following preparatory steps:
- Start Early
It's never too early to prepare your child's school fees. Start early, long before your child starts school.
The longer the preparation time, the lighter the burden you have to bear. Ideally, preparations for education costs can begin even before you and your partner have children. - Mapping School Choice
The next step is to map schools for future children. Is the school you choose a public or private school? What about the location of the school, is it in a big or small city, or maybe abroad? These considerations will influence the amount of your child's school costs later. - Create a Spending Plan
After mapping the school, it's time to create a budget plan. Gather information about the costs of several schools that you and your partner have chosen. This information will give you a big picture of the amount of costs that need to be prepared.
In making this plan, consider inflation each year. BPS data shows that inflation greatly influences the adjustment of education costs every year. This adjustment can reach an average of more than 10% every year.
For example, if the cost of a child's education per year this year is 10 million rupiah, then in 5 years, the costs that must be prepared could reach 15 million and above.
Consideration of Funding Sources for Children's Education
After calculating the amount of costs that you have to prepare, now you need to find a source of funds for all these expenses. You can prepare these funding sources through various approaches such as:
- Create a Savings Plan
The first step to preparing for your beloved child's school fees is to create a savings plan. Set aside special funds every month to put into savings. Some financial experts state that the amount of savings funds for children's school fees should be around 10-20% of their monthly income. - Exploring Education Savings Options
Currently, almost every bank and financial institution offers education savings products. Collect information from each bank about the savings program and compare.
This comparison can take the form of interest amount, savings period, auto-debit feature, monthly savings amount, administration fees, and additional features such as life insurance with a certain coverage value. Choose a product from a trusted bank with the features that best suit your needs. - Preferred Investments
Another source of education costs comes from investment. It is very important to choose an investment product that is able to answer your needs from all aspects such as time period, risk and amount of initial funds.
The investment products available are quite diverse, some of which are:
- Gold precious metal investment for long-term needs
- Investment in mutual funds with several choices of instruments such as stock mutual funds and money market mutual funds for short-term or long-term goals
- Deposits with various interest options
- Property investment for long-term needs - Educational Scholarships
The choice of school scholarships currently available is increasingly diverse. These scholarships come from various agencies, including government, educational institutions, companies and private agencies.
You can collect scholarship information which includes the type of scholarship, amount of funding, conditions that must be met, and other information. Discuss with your child about the existence of these scholarships and what things need to be prepared early on to get the desired scholarship. - Consultation with a Financial Planner
Consulting a financial planner who specializes in educational planning will provide valuable insight and guidance. These professionals can help in developing financial strategies that are tailored to conditions and goals. By seeking expert advice, you can make the right decisions and optimize your education savings plan for your children.
Conclusion
Preparing children's school fees requires careful consideration and planning. You need to start early, set educational goals, look for various options for educational funding sources and seek professional advice.
These steps will help you prepare funds for your child's education effectively. Evaluate your plan periodically and make adjustments as needed. All of these preparations will help you prepare for the school fees your beloved child needs for future success.
