News & Articles Spending Big on Education: How to Save for Your Child\'s Future
Spending Big on Education: How to Save for Your Child\'s Future
29 Dec 2015
A recent newspaper report has stated that Malaysia is the 5th most expensive country for degrees, as reported by news portal AsiaOne. This report is based off a London website called Expert Market, a business to business marketplace. The most shocking aspect of this report was that Malaysian parents actually spend 55%of their income on their children's education.
This would actually mean that parents spend more than half of their salaries paying for their children's education all the way from primary to tertiary. The only way that parents can save is if their children obtain a study loan or scholarship. On average. a degree from a private University or College will cost around RM76,925. The countries which are more expensive in Malaysia in terms of tertiary education is Hungary, Romania, Estonia and Chile.
Parents do not have to despair however, as there are several ways that they can invest in their children's future. There are both long term saving schemes as well as short term solutions if you haven't got enough time to invest.
National Education Savings Scheme (SSPN)
Also known as Skim Simpanan Nasional, this scheme was introduced by PTPTN so as to grow your children's savings until they are ready to enter college or university. In addition to annual dividends, this scheme also offers insurance coverage and death compensation to eligible depositors. Any Malaysian is qualified to invest and can claim a tax relief of up to RM3000.
Bank Education or Savings Account
Many of the major banks in Malaysia offer some sort of savings account for children with higher interest rates than regular savings accounts. Some have insurance and parental illness coverage that comes with it in a package.
Unit Trust Funds
Apart from banks, you can also invest in an equity or balanced equity unit trust fund that can fetch returns of at least 10% annually. Unit trusts are easily controlled through online means and control the amount of risks you're willing to take.
Several short term financial solutions are also available for your child's education, in case you don't have enough from your long term investment or didn't invest in long term plans:
Employee Provident Fund
Technically, anyone with an EPF account is allowed to make an Education Withdrawal for your child but at the expense of your own retirement fund.
PTPTN
The National Higher Education Fund Corporation allows your child to take education loans that has to be repaid after they graduate and get a job. These loans cover fully or partially any tuition fees and living expenses.
Refinancing Your Home
If you have a piece of property that has already been fully paid for, you can consider refinancing it and liquidize the money. However, keep in mind that you will have to be paying mortgage again on the property.
This would actually mean that parents spend more than half of their salaries paying for their children's education all the way from primary to tertiary. The only way that parents can save is if their children obtain a study loan or scholarship. On average. a degree from a private University or College will cost around RM76,925. The countries which are more expensive in Malaysia in terms of tertiary education is Hungary, Romania, Estonia and Chile.
Parents do not have to despair however, as there are several ways that they can invest in their children's future. There are both long term saving schemes as well as short term solutions if you haven't got enough time to invest.
National Education Savings Scheme (SSPN)
Also known as Skim Simpanan Nasional, this scheme was introduced by PTPTN so as to grow your children's savings until they are ready to enter college or university. In addition to annual dividends, this scheme also offers insurance coverage and death compensation to eligible depositors. Any Malaysian is qualified to invest and can claim a tax relief of up to RM3000.
Bank Education or Savings Account
Many of the major banks in Malaysia offer some sort of savings account for children with higher interest rates than regular savings accounts. Some have insurance and parental illness coverage that comes with it in a package.
Unit Trust Funds
Apart from banks, you can also invest in an equity or balanced equity unit trust fund that can fetch returns of at least 10% annually. Unit trusts are easily controlled through online means and control the amount of risks you're willing to take.
Several short term financial solutions are also available for your child's education, in case you don't have enough from your long term investment or didn't invest in long term plans:
Employee Provident Fund
Technically, anyone with an EPF account is allowed to make an Education Withdrawal for your child but at the expense of your own retirement fund.
PTPTN
The National Higher Education Fund Corporation allows your child to take education loans that has to be repaid after they graduate and get a job. These loans cover fully or partially any tuition fees and living expenses.
Refinancing Your Home
If you have a piece of property that has already been fully paid for, you can consider refinancing it and liquidize the money. However, keep in mind that you will have to be paying mortgage again on the property.
Source: DurianProperty.com