Dan scb masthead hello harvard

Saving regularly as soon as your little arrives, ensures you can plan their education – worry free

Hello, Harvard! How much should you save for your child to study abroad?

No sooner than your child is born, family and friends will start talking about whether the little one is going to study overseas to be a doctor, be educated at Harvard, or study economics at Oxford.

According to the recent Emerging Affluent Study 2018  across 11 countries, 43% of people surveyed rank their children’s education as one of their top three financial goals. But with sky-rocketing costs — especially for overseas education — how many can really achieve these goals?

What are the costs?

In no time at all, 18 years will have passed and you will be waving your children goodbye as they leave for university. Whether they decide to study locally in Singapore, or overseas in Australia, Hong Kong, the UK or the US, here are the tuition costs you could be looking at by today’s standards.

Of course, like everything else, costs are on the rise and if you are looking at university fees 20 years from now, if your child decides to study in Singapore, a year’s tuition is likely to cost around S$77,000 a year.

Costs Don’t Stop at Tuition Fees

It’s worth remembering that on top of university tuition fees, you will have to find a way of funding books, transport, food and accommodation. On-campus living, for example, can be expensive, costing around S$35,000 a year in the US. Other incidentals like flights home and paying to store belongings between the end of one university year and the next can all add up.

Don’t delay. Start today.

But the good news is that the sooner you start, the easier it is. If you start saving when your child is 5 years old instead of waiting until he is 10 years old, you will have nearly double the amount the time he goes to university.

Regular savings make it more affordable

Reaching what might seem a daunting target is made much easier if it’s through small regular amounts, which can be done through Regular Savings Plans (RSPs) or Endowment Plans.

Let’s look at Rachel Lo, 35, a successful business manager with a two year old son. She has decided it’s the right time to invest in his education, and will put aside S$1000 a month in an RSP for the next 16 years to pay for his education.

By the time Rachel’s son reaches his eighteenth birthday, his mum will have invested S$192,000. With a projected rate of return of 5% per year, she stands to have S$293,000 in his education fund.

Investing over the long term means that Rachel will be able to ride out any losses, and her investment plus compound interest should meet all her son’s education needs.

Like Rachel, you can discuss with our financial advisors, how much you want to invest each month and the type of investments you would like to explore.

Make an appointment today.

Disclaimer:

Buying an insurance policy is a long-term commitment. An early termination of the policy usually involves high cost and the surrender value payable (if any) may be less than the total premiums paid. The contents of this article do not constitute a contract of insurance and reference should be made to the respective policies for the exact terms and conditions applicable to the insurance policy. It does not constitute an offer to buy or sell an insurance product or service. It is also not intended to provide any insurance or financial advice. All insurance products described in this article are products of and underwritten by the respective insurers and not Standard Chartered Bank (Singapore) Limited. Standard Chartered Bank (Singapore) Limited shall not be liable in any manner whatsoever regarding your application or the contract of insurance. In facilitating insurance arrangements or in referring customers to any insurer, the Bank is acting in alliance with the insurer and not as an agent for customers.

This article is for general information only and it does not constitute an offer, recommendation or solicitation to enter into any transaction. This article has not been prepared for any particular person or class of persons and it has been prepared without regard to the specific investment or insurance objectives, financial situation or particular needs of any person. You should seek advice from a licensed or an exempt financial adviser on the suitability of a product for you, taking into account these factors before making a commitment to purchase any product. In the event that you choose not to seek advice from a licensed or an exempt financial adviser, you should carefully consider whether the product is suitable for you.