High cost of education

Some financial planners alarm parents about the high cost of education.

For example, the cost of getting a basic degree is:

              Today     15 yrs    Monthly     
                         Later    saving
Singapore    $40,000    $72,000     $250
Australia    $160,000  $288,000   $1,000
USA          $280,000  $504,000   $1,750
UK           $270,000  $486,000   $1,700

Assume cost increase by 4% per year for all countries. Estimates based on 4 year course, except for Australia (3 years). Cost for overseas education includes tuition fees and living expenses.

Assuming an investment return of 6% per annum (not guaranteed), the parent has to save between $250 to $1,750 a month.

That is a lot of money.

Fortunately, most students enjoy a subsidy (if they go to a university in Singapore) or if they qualify for a scholarship in a foreign university. Some of them work to pay for their expenses.

Still, it is useful for the parent to have some regular savings to provide part of the cost of their children's education.

I recommend a monthly saving of $100 to $300 per child. This depends on the financial means of the parents.