Tips On How To Prepare Education FUNDS For Your Beloved Children

Have you prepared the education funds for your beloved children? If your children are still under five years old, this is the right time to save up your income for their education funds. You might still afford their elementary and middle education, but what about their university fund later? The cost is not small, even public universities can be very expensive, let alone private universities. As parents you would definitely want to give them the proper education, right?

here are some mistakes parents generally do in preparing their children education funds:

1. Not properly planned
   The disastrous mistake about planning a child's education fund is the lack of planning itself. As a parent, if you happen to improperly plan your child’s education fund is a disastrous mistake.
2. Too late in making plans
   Being late in planning is not because parents not realizing the importance of the planning itself, but because PUTTING IT OFF.  Some characteristics in putting things off:

• Eagerly being consumptive. If you ever decide on buying a car, think about buying an affordable one and one that gives added value for your family.
• To think that you still have time to save up, because your child is still littler
• Mom and dad often let go of their responsibilities on their children's education funds

3. Ignoring inflation
There are some who miscalculate their education fund planning, due to ignoring the infaltion factor or the increase in education cost. In average the increase in education cost in Indonesia is between 15–20% per year.

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4. Time miscalculation
Sometimes parents make mistake in deciding the estimation between time and the required fund. When calculating the time period, put your children's age in the equation.

5. Too little in saving up or investing
The next mistake is that you save up or invest too little. you need to remember that all money calculation is always based on assumptions. in making calculation, ideally you should use realistic assumptions.

6. Investing without planning

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Besides that, you also need to know whether you should save up or where to invest. How much? When? There are so many financial products designed to meet the needs of children’s education funds, starting from futures education funds, deposit, education insurance, mutual fund investment, and other investment products.

It is very important to decide the right investment or savings for education. Let’s read the steps below for what you can do to plan the right education funds for your children:

1. Calculate the difference
   After calculating all the education costs and you obtain the approximate number, then you can start to calculate the difference you need to fill in that gap. Compare it with the current fund you have now, so that it could help you in discovering the amount of difference for the future.
   This difference is what needs to be anticipated early on, that is by investing or preparing the amount of education funds by purchasing education insurance products.
2. Calculate the amount of education cost for your children in the future
   The next step is to calculate the amount of education costs required for your children’s education in the future. Do this step by step, starting from the lowest level of education up to when they will conclude their education in the university level. The amount might be magnanimous, so don’t be surprised.
3. Maintain the financial condition
   Track and count every asset you currently have, whether it is in the form of cash money or other kinds of investment. Review all the available cash you currently have, then count the projection value in the future when your child starts his/her university degree (for example in the next 18 years).
   This will help you to foresee your financial capability in fulfilling the needs for your children education costs in the future. When you know your potential, then next is an easier step to overcome it.
4. Purchase the right education insurance
   Almost all insurance companies offer education insurance products. You will have a few to consider and select from, of course by gathering the accurate information first. Don’t forget to keep comparing one another, so that you may find and purchase the best product to fulfil this financial need.

Although education insurance cannot fulfil the entire education fund needs, but this product will surely help to make it easier in overcoming it for the future. Choose the best product, so that the fund needs can be fulfilled in the future