Education Planning Concerns For Families With 2 Children And More
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Every parent knows saving up for the funds for their children’s education is important. From savings accounts, to endowment plans to investment tools, one would have used what he/she personally deem as the most appropriate way of savings up. Education Planning Concerns For Families With 2 Children And More
There is no one right way to education planning. Whichever way, you would definitely be able to attain that goal if you are planning for just one child’s education funding. The challenge begins when you have more than 1 child. What if you have more than 2 children?
I recall before my son was born; my girl just barely started going to childcare. Whenever the notice from school came informing of an excursion or an enrichment or concert, it was easy to decide if I were to allow her to participate. Even to the extent of the number of sets of uniform, I recall purchasing 4 sets to make my laundry easier and more manageable.
2 years later, it was time for my son to join in the childcare scheme. It was a total game changer. Every single expense simply multiplied by 2. I believe every parent with 2 childcare-going children will be familiar with the 10% sibling discount. Is that really a lot of savings for us? Maybe. Depending on the school fees, you can easily save up to a few hundred dollars a month. Education Planning Concerns For Families With 2 Children And More
In 2020, government enhanced subisidies to help parents with the afforability of Child Care Centres. 1Every working mummy/ single daddy working at least 56 hours per month is entitled a monthly basic subsidy of $300 for full-day childcare per child. This is applicable for all income tiers. The 2 criterias to meet:
- Child is a Singaporean Citizen
- Infant or Childcare centre is licensed by Early Childhood Development Agency (ECDA)
Basing on the above statistics, let us look at the difference in the costing for a family with one child versus one with 2 children.
Assuming without the sibling discount, the fees after Basic Subsidy, for 2 Child Care going children, the fees range from $840 to $4,400 depending on the choice of centre.
Example: For Anchor Operator Child Care Centres (Before sibling discount)
Fees for 2 children = ($720- $300) x 2 = $840
With the available sibling discount, the fees then reduce to $768 to $4,400 per month.
Example : For Anchor Operator Child Care Centres
Elder Child = $720
Younger Child = $720 x 90% = $648
Total Child Care Fees = ($720 – $300) + ($648 – $300) = $768
That makes it an average savings of $134 (the estimate of a week’s worth of grocery expenses) across the 3 different types of centres.
If this is the cost savings during childcare days, what about tertiary education years? Would there be more cost savings? The answer is a NO! Tertiary Course Fee follows cohort-based system2 ; tuition fee for each cohort of student intake for the course will be fixed throughout the course of studies.
Henceforth, it is important for all parents to plan for tertiary education fees as each child. But before we plunge into savings for the sake of saving, there are some pointers that you would want to take note of first.
FACTORS TO CONSIDER BEFORE PLANNING
- Age gap between your 2 children?
- Gender of the children
- Tertiary Savings Goal
HOW DOES THESE FACTORS AFFECT
1.Age Gap Between Children
As mentioned earlier, I have 2 children who are 2 years apart; my daughter being the elder among the 2.
Unlike the usual common commitment of 4 years of financing a degree course, in my situation, my commitment is lengthened to twice the duration.
In the case of the opposite with the son being elder and similarly 2 years apart,
In this scenario, the course fee payment term is not affected but instead it doubles the amount payable as both children would be taking their degree course together.
2.Gender of the children
If like myself, you have one boy and one girl, the previous illustrations already showed what would be the expected cost during their pursue of their degree education.
But what if you have 2 boys or 2 girls?
Regardless of whether both children are boys or girls, if they are of the same gender with 2 years age gap, it not only lengthens the usual 4 years of education funding years, there is also a good 2 years that they will both be in university at the same time. In such case, there is 2 years where your liability of the fees double until your elder child completes his tertiary education.
3.Tertiary Savings Goal
Discuss with your spouse if you all would want to save towards a diploma education or degree education for your children. The type of tertiary course will affect not only the end savings goal that you need to achieve but it also helps to determine the time frame you will need.
HOW CAN WE PLAN FOR THE NECESSARY EDUCATION FUNDS
Now that we have looked through the factors to consider, how can we plan for such education fees then?
1.Identify when you would need to have such funds
A common mistake most parents make when saving for a child is to have savings plan that only matures after the child completes his/ her tertiary education. You would want the funds ready before the course starts
2.Calculate what is the school fee amount that each child would need
We cannot decide the course that our children will pursue. No one can tell the future. But that does not mean we cannot plan. Take the average of cost of a degree or diploma as a guide. And with this, include inflation of 3% to have a rough estimate of what is the amount that you would be looking at
3.Workout what is your comfortable commitment towards savings towards this goal
As much as it is important, we cannot simply park 100% of our earnings just towards this savings goal. Be realistic about the amount that you need to set aside. A savings goal is better worked towards in stages rather than not doing it at all.
Bringing up one child is not easy. Bringing up more than one child is a challenge. The end result of this challenge is great parenting achievement.
Now that you know the consideration factors and how to go about doing it, you are ready to get into deeper discussion with your financial planner what can be done to assist you in reaching this goal.
For a reference of the course fee of the common diploma and degree courses available in Singapore, download the “Reference Guide to Local University Course Fees” List.
Now that you know the consideration factors and how to go about doing it, you are ready to get into an in depth discussion with your financial planner of what could be done to assist you in achieving this goal.
Sources:
1 – (ECDA), E. C. (November, 2020). Subsidies and Financial Assistance. Retrieved (5 July 2021), from
https://www.ecda.gov.sg/Pages/Subsidies-and-Financial-Assistance.aspx
2 – Nanyang Technological University. (August 2019). Important Notes 2014 PDF. Retrieved on (5 July 2021) from,
https://www.ntu.edu.sg/docs/default-source/ntu/nss_fin/important-notes-2014.pdf?sfvrsn=12a02c62_2
iChildcare in Singapore 2021 : Cost, Options and Subsidies for Working Parents. (11 Feburary, 2021). (NTUC Income) Retrieved (5 July), 2021, from https://www.income.com.sg/blog/childcare-singapore-guide-working-parents
iiTuition Fees | NTU Singapore. (2021). (Nanyang Technological University Singapore). Retrieved (5 July 2021), from,
https://www.ntu.edu.sg/admissions/undergraduate/
Article by Pamela Chong
Email: pamela.chong@legacyfa-asia.com
The writer is an Associate Manager from TN Advisory Group.
If you wish to know more about Children Education Planning or any other enquiries, you may contact me through Whatsapp or Email to schedule an appointment with me and I will get back to you as soon as possible.
