HSBC: Planning For Children’s Education Costs
[Advice column by HSBC Bermuda]
I plan to enroll my daughter into private school in six years. Money will be extremely tight when I do, but her education is worth the sacrifice. What can I do to prepare myself financially and what are my other financing options besides a loan?
Planning ahead
The costs may seem overwhelming, but if you’re realistic about your financial situation and plan in advance there’s a better chance of giving your child the education you want.
Our checklist can help you plan how to fund your child’s education:
- Calculate the total cost of your child’s education. If applicable, ask the school for a copy of average school fees for the past five years.
- Work out what you’ll have to spend on other extras. Calculate the cost of school uniforms, lunches, school supplies, trips and spending money.
- Keep a budget. Write down all your money coming in [salary, property and inheritance] and going out [mortgage payments, bills, pension payments].
- Subtract the school fees from your income. Work out if the remainder is enough to live on comfortably.
Funding your child’s education
There are a number of options for financing your child’s education. Some options might include:
- Investing. Since you have more than 3 years, investing could bring a much greater potential for growth, but carries with it the risk that you could get back less than you invested.
- Shorter-term savings such as a Fixed Term Deposit account
- Scholarship. Many private schools offer scholarships. The value will vary, and rarely covers the whole fees.
- Bursary. A grant from a private school to help you pay the fees.
Free Financial Planning with HSBC
HSBC can help you develop your own financial plan! Our approach takes you through the complete financial planning process, at no cost to you. We’ll work with you to understand your particular circumstances and your financial ambitions. From there, we provide you with solutions on how to manage, grow and protect your savings to achieve your goals.
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