Estimate Education Fee for Children

Education is as important as basic needs such as clothing, food, and home. Education though not essential living needs, but is crucial in building a child’s independence. With education, children can have the basic competencies to become independent individuals, including financially independent.

In preparing to fund education, parents should be able to allocate their income. The more expensive education funds should be prepared, the greater the funds should be allocated.

Because of that there must be planning funds for education, so that parents can afford the tuition fees of children according to education levels. The concept of parent education funds are saved for the entire period of the child’s education fund. Criteria education funding is at the time when it will be used, the amount of education funding is adequate, in accordance with the increase in inflation. This is determined by the ability of parents to save or invest the funds for education. The problem is that not all parents understand how to do money saving effectively, because it’s every parent must have knowledge of investment products and financial instruments as well as understand the risk and return (profit rate).

Target Funds

First step is parents should take into account when paying funds for education. Not now, but three years later, 9 years later, and so on. After knowing when to pay, it means that parents will know how much time they had to prepare for education funding.

After knowing the time, then calculate what it costs now and later. This means parents need to know where the children will be schooled, because the education cost at many various schools are not the same. Parents need to know to which school children will be schooled. After determining the choice of school, parents may request information regarding the school entrance and tuition fees.

Furthermore, parents have to estimate the education fee each of these levels of education. Estimated assuming 10 percent increase in tuition fees per year. After knowing how the target and deposit every month, there’s more to consider, that if something happens such as a parent to not work or stops working or sick and unable to earn a steady income again.

Actually, save yourself and buy insurance too. The amount insured is the amount of funds that need to cover education, no need to overdo it. “Now, the choice to anticipate the risk of unpaid down payment because unexpected things that happen to a parent is much more practical and accessible. Usually there is a product of education funding that is once a package with insurance. Offered, if there is risk to the parents, then parents will be free from paying the deposit. The next deposit will be paid by insurers. All you need to consider is how much should be insured.

Must be Creative

Parents must be more creative in order to fund preparatory education that he had run the appropriate. Education funds for long term and there are stages. The problem is, if parents take the standardized financial products, such as savings, the benefits are very small, while the rising costs of education funding is much greater than the interest rate that can be provided by the bank. That is, if parents continue to use it that way, the savings deposits became very burdensome because they have to pursue the target fund investments.

Therefore if there are other alternatives which could deliver higher returns to investment results in the long run, parents should learn it. Parents should dare to accept the risk of loss. Some people are happy just to put money in the bank so it means he’s very conservative, not taking any risk. Because, savings products out there is always a risk, such as financial institutions closed or unstable economic conditions that cause the performance of the financial instruments we select down (systemic risk).

Education fund has a stage, so the investment period varies. There are short term (1-2 years), medium (3-5 years) and long term. Savings and conservative financial products suitable for short, medium and long term while better select products that provide better returns, such as retail bonds, fixed-income funds, or gold. Above 5 years can use stock mutual funds. Investment property can also be, but the big capital. Each instrument has a risk investment.

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