Harvard University, US | |
RM | |
| Tuition Fees Per Year : | 105,000 |
| Other Expenses Per Year : | 33,000 |
| Total Per Year : | 138,000 |
| Total for 4 Years : | 552,000 |
University of Cambridge, UK | |
RM | |
| Tuition Fees Per Year : | 64,000 |
| Other Expenses Per Year : | 42,000 |
| Total Per Year : | 106,000 |
| Total for 4 Years : | 424,000 |
Monash University, Australia | |
RM | |
| Tuition Fees Per Year : | 54,000 |
| Other Expenses Per Year : | 25,000 |
| Total Per Year : | 79,000 |
| Total for 4 Years : | 316,000 |
University Malaya, Malaysia | |
RM | |
| Tuition Fees Per Year : | 1,200 |
| Other Expenses Per Year : | 10,000 |
| Total Per Year : | 11,200 |
| Total for 4 Years : | 44,800 |
| Next to buying a home, funding for a child's education is the largest expenditure most parents will make. The following are some factors that you need to take into consideration when making education planning for your children: 1. Number of children you have. 2. Whether you want your child to attend a local or an overseas university. 3. Number of years you have before your child attends university. 4. Type of course that your child may be pursuing. 5. Current tuition fees and other type of expenses. 6. Currency exchange rate of the country your child wants to study in. 7. Expected rate of increase in education cost. 8. Your current and possible future income. 9. Investment that can be put aside for your child's university education. 10. Expected rate of return from your investment. Key Expenses Tuition fees for universities abroad are normally higher than that of local universities and may vary according to programme or course. Furthermore, you need to consider the rise in tuition fees when making education planning because they can increase quite significantly. Besides that you also have to take into account the following: - Medical fees - Course materials (such as text books and lecture notes) - Transportation (including air fares if studying overseas) - Room and board (if studying overseas or staying in dormitory) - Student activity fees (such as for sports and recreation) - Course-related expenses (such as laboratory fees, library fees, and exam fees) The Key is to Start Early Although it is never too late to start planning for your child's education, it is always best to start as early as possible to ensure you have sufficient funds by the time your child is ready to enroll in a university. Through the effects of compounding, a small sum of money put aside each month can grow into a significant amount. Ronald has a 4-year-old daughter, whom he would like to send to the University of Cambridge when she is 19. He plans to invest a lump sum figure to kick start her education fund while saving a fixed amount each month to make up for the balance. The first thing he needs to do is to determine the amount he requires by factoring in the inflation rate. Currently, a 4-year course in the University of Cambridge would cost about RM424.000. Assuming an inflation rate of 5 percent, the expense would have increased to RM881.920 by the time Ronald's daughter becomes 19. Current Expenses = RM424,000 Future Expenses = RM424,000 x 2.08 (15 years later) with inflation (5% per annum) = RM881,920 Ronald invests RM40.000 into an equity unit trust fund which he expects will give him annual returns of8 percent*. Using Table A, replacing inflation rate with compounding rate of returns, he can calculate how much his investment will grow to and what is his shortfall. Lump sum investment = RM40,000 Total after 15 years = RM40,000 x 3.17(with 8% annual returns) = RM126,800 Shortfall (after lump = RM881,920 - RM126,800sum investment) = RM755,120 To fund for his shortfall, Ronald plans to invest in a portfolio of stocks and unit trusts. Using Table B, he can determine how much he needs to save each month. Assuming he can get 8 percent annual returns* from his portfolio, he will need to invest RM2.190 every month in order to get RM755,120 when his daughter is ready for university. Amount needed = RM755,120 Monthly investment (with 8% = RM755,120 x 0.0029 annual returns for 15 years) = RM2,190 |
