Investing in our children’s education
Education is the key to your child’s future success. Fredric Afram says the pressure is on the parents to save for their child’s future, and the planning must start today.
The price of education has never been more prominent than it is today. Headlines scream of rising university fees and student debt but with high unemployment levels plaguing the horizon, the pressure is on to give children the best start in life.
Ask any parent and their wish is for their child to gain a good education, and become successful without the burden of a massive debt. In my conversations with clients, I often find myself stressing that it is our responsibility as parents to protect and provide for our children, and they always agree. Children are our future and it is vital we invest in them now to reap the benefits later. It is no coincidence that those who receive a good degree from a respected institution feature among the highest earners.
As parents, we are our children’s best example, the people they look up to and the people they learn from. Research has shown that often children who grow up in an international environment seek to replicate their parents and study internationally.
As we all know, a good, well-rounded education – wherever it may be in the world – is invaluable but it does beg the question, at what cost?
Providing a good education does not come cheap, and if you have more than one child, this amount multiplies further still. Planning for your child’s future is no easy feat and is not something that can be achieved overnight. It takes careful and considerate planning.
At present, average total university fees in the United Kingdom amount to as much as US$20,000 (QR72,000) per year, taking into account everything from tuition fees to accommodation to books, travel, food and socialising. Needless to say, the figures are alarmingly expensive and are only set to rise further.
Bearing this in mind, and with inflation in the sector set a minimum of five percent, who knows what the costs will be several years down the line when it is your turn to wave them off to university?
From the moment your child is born, you have 216 monthly paydays before they reach their 18th birthday to put aside enough to cover the cost of university. At an average cost of US$20,000 (QR72,000) per year and for the duration of four years, you would need US$80,000 (QR291,200) saved. Take into account the five percent inflation level over the next 18 years and this amount equates to US$152,000 (QR553,280).
As such, there is really only one way to ensure that your children will have the opportunity to take this next step in life, and that is through education fees planning. It is essential that you be prepared for the outlays that you will face, and are realistic about the true cost of an invaluable education, or run the risk of encountering nasty shocks further down the line.
It is clear that the earlier you prepare, the easier it is to meet education costs, and acting sooner rather than later means you can relax knowing you have made the necessary provisions for your children’s future. But despite a shared goal, no two families are the same and their situations are often entirely unique. As such, we would urge people to seek professional advice, as by listening to your specific questions and concerns, as well as recognising your individual needs, a financial planner is able to come up with the right planning process and strategies for your particular circumstances. Above all, you need to find the right solution to get the most out of your money to make that university dream become an achievable reality.
Fredric Afram, senior financial planner at Guardian Wealth Management Qatar.