# How much you should save per month for your child future education in College or University?

Every parents have a dream for their son. To be engineer, doctor, lawyer and so on. To realize the dream, parents should prepare in financial when they time come.

Many of us, we have a big dream but we didn’t  prepare for the dream. You must start savings now because education is not cheap.

How much you should put aside for your child future education (monthly)?

Step 1

• Determine age of child : Example 5 years old

Step 2

• How many years before he/she begins college : 19 – 5 = 14 years

Step 3

• How much the annual cost for the college? :  Google or from booklet.

If you choose Engineering,  price taken from Taylor’s University College

Price per semester RM51,400 .3 semester per year. Total yearly = RM154,200

Step 4

• Consider 6% inflation factor : Price 14 years later, 154,000 x 2.26 = RM348,040

How do i get the 2.26 value? The value refer to inflation table. Email me if you want the Table

Step 5

• Total cost to complete study? : 2 years x 348,040 = RM696,080

Step 6

• If you do savings in investment product, use this Step 6 : Investment returns after taxes 8%

696,080 x 0.038 = RM26451.04. How do i get the 0.038 value?  Email me if you want the Table for investment return.

Step 7

• How much savings per month?

Rm26451.04 / 12 months = RM2204.25 per month!

If you don’t put your savings in Investment products :

RM696,080 / 14 years / 12 months = RM4143.33 per month!

Conclusion

Education is expensive.

There are lots of parents out there, which are afford to put RM1000 or RM2000 per months savings for their kids. Small salary earner, I totally understand but i hate to see big incomer earner to neglect their kids.

Above you can see comparison between, savings in Investment products compare to normal savings . If you want to do long term savings, investment is the place you should dump your money. Save RM370,314 to get RM696,080 or save RM696,080 to get RM696,080. You decide.

RM2204.25 per month! Wow, this amount are bigger than monthly salary average Malaysians.  Dont be afraid, if you cant afford to save this amount for your kids. I also cant afford this. The moral of the story, we MUST put aside some money for our kids every months. Small amount like RM100, as we know from here, it will never be enough. At least, we do some savings for them.  It helps to reduce the amount of education sponsorship later. Dont make your kids burden with loans before he even start working.

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### 2 responses to “How much you should save per month for your child future education in College or University?”

1. azzubayani

Could you pls email me the tables of inflation and investment return.Tq

• firdausprudential

Hi,

August 2009 Fact Sheets emailed to you.

Or you may download here