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Saving for your Children’s University Cost

When you are a single parent with children, it is often tough to save, let alone saving for a future expenditure like university cost. The stress adds up when you have more than one child. How can you save enough to pay for your children’s’ university cost?

1) Take stock of what you can save and what you need to save for
Singapore is expensive and having a single income can mean that money is tight most of the time. Take time to note down all your expenditure and what you can save. It is important to also break your savings into parts – that is why listing down what you need to save for is crucial. For example, you will need to save for your children’s university cost, your retirement, and sudden illness. Break the amount that you can save into these three components and save accordingly. You do not have to save a lot every month, but slow and steady savings is better than no savings at all.

2) Consider a financial plan to save for your children’s university cost
There are many saving plans out in the market which help you to save for your children’s educational cost. However, be sure to understand the saving plan completely before committing to any purchase as some of these plans might not work out to benefit you. Speak to a financial planner before you make any sort of purchase.

3) Invest in unit trusts
You can choose to grow your savings by investing in unit trusts if you are financially able to do so. However, choose the unit trusts carefully and understand the structure before buying into any of the unit trusts. Some of them contains complex structures and may not be suitable for you. If you do not understand the product, do not invest in it.

4) Invest in Equity Investments
You can choose to grow your savings through investing in stocks and shares if you are a savvy investor. You need to do your homework and invest only in products that give you passive income which you can save for the future. If you do not understand the products or the stock market, please do not consider this option as it could potentially wipe out your savings. The equity market is volatile and you need to make only informed decisions when investing.

5) Invest in Bonds
Bonds are basically fixed income-securities. When you buy a bond, you are technically lending money at a fixed interest rate to the bond issuer for an agreed period of time. Upon maturity, you will receive the amount that is promised to you when you purchase it. It is a relatively safe investment and the returns are usually low.

6) CPF Education Scheme and Tuition Fee Loan Scheme
If all of the above are beyond your means, you can fall back on the CPF Education Scheme. This scheme allows you to borrow from your CPF Ordinary Account to pay for your children’s university cost at approved institutions, subjected to the withdrawal limits. After the limit is reached, you can take a loan from the Tuition Fee Loan Scheme for the remaining sum of money. This loan is interest-free during the period of study and only commences payment after your children graduate.

Saving for your children’s education may be an uphill battle for a single parent, but it is not impossible to do so. Any little bit counts and you might be surprised at how much you can save over the years.

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