In addition to the mortgage, car, and pension fund preparation, there is another expenditure item that should be your marriage that is children’s education. Although currently has not been given a baby, or the age of the child is still very young, the cost of educations should have begun to be prepared.
Why? The cost of educations until the children graduate from college is not cheap. Plus every year the cost also continues to rise significantly.
You certainly do not want abandoned children’s education and ultimately sacrifice other savings such as pension funds, venture capital, and other active assets is not it? Therefore avoid some of the following children educations funding mistakes.
1. Not set up early
Like pension funds, education funds should be prepared as early as possible. Investing early education funds will give you plenty of time for the money you save to grow.
You can either prepare by saving on regular accounts, deposits, saving futures, or investing them through instruments like mutual funds. One thing to keep in mind that preparing an educational fund means you have to keep up with the growing age of the child.
2. Do not stick to past experiences
Do not use your parents’ past experience to set up a children’s education fund. The reason, past and present is different. Currently the higher the inflation rate, the need is also more and more. The price of necessities and other prices including education is also definitely higher.
Instead, compare it to the current actual conditions and look for a more modern reference to the preparation of a child’s education fund.
3. Miss-choosing financial products to fund education
Before choosing the financial products you want to use for the purpose of financing children’s education should be careful first scheme. Have a thorough understanding and get as much detail as possible about the financial product.
Then compare the estimated return on investment to the actual conditions of the required education costs. In addition, you should also look for references or recommendations what financial products suitable to finance children’s educations funds. Make no mistake.
4. Owe to educate children
Debt can indeed be the last solution that can help fund child education. However, it should be avoided. If you have to owe make sure you are wise to choose the source of debt, have a plan to pay installments, as well as understand the interest rate and debt tenor well.
5. Less discussion with children
When the child is old enough to discuss future educational plans, try to communicate the suitability of their educational dreams to your financial capabilities. Give your child a sense of your financial ability to finance their educations.
It is important to do so that you know the amount of education fund that must be prepared. Moreover, if there is a component of debt in it. The cost is also often not just the cost of schooling. You have to take into account the cost of living, especially if the child wants to go to another city.