Published on March 8, 2022
One common concern I’ve observed across my parental client pool circles around arranging funds for their children’s college education. Though knowledge is a child’s fundamental right today, we know it is not free.
Most kids in the UAE want to move to the US, UK, Australia, or Europe to pursue higher education. And as a parent, it’s natural to provide the best for your child. However, this ‘expensive dream’ is possible to fulfill with planning & execution, which includes investing in the best child education plan in the country.
If you’re a parent or will embrace parenthood soon, read further to learn some tips on planning for high education costs. These insights will help you prepare for the future without having to dip into your savings or take out expensive loans to fund education.
While there are different child education plans in the UAE, I recommend opting for either a savings plan or a guaranteed plan that takes uncertainties out of the equation.
Depending on the plan’s premium, maturity timeline, and interest offered – you can begin building the best life for your children’s future with as low as USD 200 a month (but you will ideally need to do more to succeed).
Remember this pro tip to ditch expensive premiums:
Choose a plan with a 10-15-year maturity.
While longer timelines seem challenging to commit to initially, it helps if you start early. Starting early reduces the amount you will need to invest and spreads over a more extended period. This strategy helps mitigate risks associated with market fluctuations as well.
Discover: Benefits Of Life Insurance In UAE
Tips To Prepare For A Child Education Plan
While I usually recommend parents to choose a guaranteed child education plan because of the emotional relief offered, it’s not as straightforward as it seems.
These financial plans work best when your parental plan is put well in place. So here are three quick tips to help you get started on the planning and execution for building a better life for your child.
While this goes without saying, nothing is possible without a plan in place. Raising a child is a structured, logical, and analytical journey, especially when saving for an expensive college fund.
The math is pretty simple.
● First, calculate an estimate of the college tuition fee.
● Next, divide the total amount by the number of years (starting from the year you begin saving) depending on your income and expenses.
● Then, divide the value of the annual savings by 12 to know the savings amount each month.
● Account for at least a 20% increase from current fee levels due to inflation.
This way, with a set goal in place, you can effectively plan & spend on everyday and significant purchases while building your child’s future.
Sharing a pro tip to keep your spirits high here:
Set realistic monetary goals for your child’s education plan.
With life’s uncertainty unfolding at the most unexpected times, you should also have enough coverage for yourself & your partner. Because plans only work if you are around to keep it on track.
As a parent, you’re going to experience changes in your lifestyle, right from facing a lack of sleep, skipping late-night social events to simply cutting down on unnecessary expenses. So whether your child decides to study in the UAE or move to a foreign country, it’s ideal for you to have a solid financial foundation to fulfill their dreams.
Apply this tip for outlining your strategy:
Speak to the parents within your circle, both whose children study locally and overseas, to get a rough idea of the costs – tuition, living, miscellaneous, etc.
Then, use this benchmark value and adjust it to the inflation rate times the number of years till your child reaches college. This strategy will help you execute your game plan effectively.
I know I’ve mentioned this point multiple times in this blog, only because it’s supremely important for you to remember.
Think of a child education plan like a compound interest problem you learned in elementary school. If you begin investing today, imagine the interest your principal earns over the years, giving a solid amount for protecting your future with much ease.
Remember, as with any other plan, the sooner you start, the better it is for you to be in charge of your finances’ impact in your life.
Giving birth to a new life and caring for them is a big responsibility for every parent. So it’s essential to take every step carefully, with proper guidance, especially when it comes to managing finances.
I will strongly recommend starting early with your child’s education plan process in the UAE for a stress-free tomorrow. As always, you can reach out to me with your concerns, and I’ll be happy to assist you with the finest resources.