Raising a child and sending them to school involves a lot of money.
We’re here to help you get a better idea on how much you need to save for your child’s education and when you should start doing so.
Take a look at your current finances
Before you even begin, you need to know your baseline. Knowing how much you have saved gives you a better idea of how much more you need to save for your child’s education fund.
Estimate the costs
If you already have a child, you can start looking into prospective schools to see what their fees look like. According to a research by Smart Parenting in 2018, here are the estimates per school level:
- Pre-schools: PHP 29,000 to PHP 280,000 a year
- Elementary schools: PHP 70,000 to PHP 200,000
- High schools: PHP 100,000 to PHP 250,000
- College: PHP 110,000 per sem
On average, expect to spend around PHP 2 million for your child’s complete education. Keep in mind, though, that tuition typically increases every year, so it’s best to factor in a 10% increase per year when estimating the total cost.
Start saving as soon as possible
The earlier you start, the more you can reap the benefits of compounding to grow your savings. You don’t have to wait to get pregnant or have children to start saving for your child’s education fund. You can begin setting aside money for a future fund whenever you and your partner feel comfortable to do so.
Once you’ve figured out how much money you need, you then need to discuss:
- How much money and how often will you put money into your child’s education fund?
- What possible roadblocks will you encounter?
- How will you fund the account?
Invest wisely
There are many products out there specifically designed to help you build your child’s education fund. Before you sign on the dotted line, remember to:
- Figure out your exact goal
- Assess if the intended product aligns with your goal or if it can help you meet it
- How much you can afford to set aside
- How much you are willing to risk
Do regular temp checks
Go back to your goals and plan at least once a year to check on your progress and see if you are on track. If something is amiss, adjust your methods (such as changing your investments) accordingly.
A good education is the best gift you can give your child. Make sure they have access to the best schools possible.
With Metrobank, you can choose from a number of investment products to suit your goals, risk appetite, and timeline. Talk to us today to start investing meaningfully with Metrobank.