Money and Tertiary Education

Every parent looks forward to the day their child finishes secondary school and steps into the world of tertiary education as this marks the child’s first steps into adulthood. This is when children are busy choosing their area of studies and this period is an important period because their choice will have an effect on their parents’ savings. education money

Firstly, it is important that a child is certain of his area of venture. Many a time, the child chooses a particular diploma/degree programme but does not graduate and leaves his studies halfway through. This, of course, cannot be avoided in some circumstances. Perhaps parents could play an important role in assessing their child’s growth from younger days to gauge his area of interest. Once this has been determined, parents can play an important role in supporting their children in deciding a course to take which will reduce the chances of their child not completing the programme and inadvertently save their parents’ money.

Secondly, parents have to prepare themselves for the financial consequences attached to tertiary education. Parents have the option of private or public education, whereby public education is more affordable than private education. However, public education institutions have a limitation of the number of students in their faculties. As such, only students who have excellent results in major examinations (such as the Sijil Pelajaran Malaysia and Sijil Tinggi Persekolahan Malaysia) are placed in public universities.

There are three aspects parents must plan for: the location, the price and the financial planning to fund their child’s course. The location determines the price and the price requires parents to start saving earlier in life.

Before deciding where to send your child for his tertiary education, research and assess the various systems available, which meet your child’s requirement and is within your budget. It is recommended that you consult other parents who already have experience of sending their children for higher education. This will help you in choosing the right education system and school for your child. It will also involve a lot of work, but will save you a lot of headache, heartache and money in future.

This aspect really depends on your child’s area of venture and the learning system which best suits his education style. Parents should also bear in mind that if their child lives out of home, there will be additional costs involved such as accommodation, food and extra daily expenses.

The financial plan
You have to work out a plan for the education fund that you have previously determined. If these funds are required at different intervals, one option that you have is to diversify your investment. This will help the money “grow” over time.

Thirdly, if you put the education financial plan into action earlier in life, one of the options available is the Skim Simpanan Pendidikan Nasional (SSPN). This scheme is managed by the Perbadanan Tabung Pendidikan Tinggi Nasional (PTPTN), with an emphasis on ‘Savings towards Higher Education’. Besides ensuring annual dividend returns, the SSPN also provides special financial incentives in the form of Matching Grants especially for low-income depositors. In addition, insurance coverage and payment of death compensation is provided free of charge to all eligible depositors.

Saving for your child’s education need not be a nightmare if we can educate ourselves with the following:

• Start saving early.
If you plan to start a family, start saving before your child is born. Savings should be done consistently, do not give yourself excuses to skip a month or two’s savings. Enrol into an automatic savings programme if it works better for you. This will allow you to reap the profits of your saving – money makes more money.

• Remain disciplined.
Very often, materialistic luxuries take precedence over long-term needs. Remain focused and disciplined to achieve the long term goal.

• Utilize various investment instruments.
We can always use more than one vehicle to accumulate our funds and the key to spreading out investment risks of a particular instrument is diversification.

• Assess Your Needs.
You need to know your financial goal to know whether you’re on track. You’d also need to constantly keep yourself up to-date with the latest education costs as they generally rise each year, not forgetting the currency fluctuations as well.

• Set Reasonable Expectations.
Talk to your children pertaining to the family’s finances and set reasonable expectations with them. If it takes too much to save up in order to send them overseas, tell them earlier that they’ll have to study hard to obtain a scholarship.

• Think Positive.
The task may be daunting but do not underestimate your ability. What the mind can conceive, it can achieve.

Remember, it is a parent’s responsibility to make sure that their child gets the best education, within a set budget, for a better and a promising future.


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