getitgt Pay for my child's uni education or let them pay for themselves?
I'm torn between letting my child go to school without any financial worries and giving them an opportunity to learn some life lessons about money.
If I am not setting aside a % of my savings for this, more can be funneled into my retirement. Any advice would help!
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I relate so much to your dilemma. That's why I'm not topping up my child's CPF account with my money; instead, i will persuade him to deposit his angbao money into CPF when he is of preschool age, haha.
for me, personally, saving up for his college fund brings peace of mind, even if I can't save so much for my retirement as a result. I feel that if he's struggling to pay his college fees and will be saddled with debts in the future, his stress will spill over to my life indirectly. so why not pay his college fees if I can save up to do so?
so i pump in some money into his CDA account regularly.
however, i want to stop giving him an allowance after he enrols into NS. force him to save up for his pocket money during university, haha
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@ethanloh Even if this is limited to specific schools here, I'm liking this option too. The interest free period means you can park that sum in a high-interest account or even make a low-risk investment if you have the sum set aside already then make the full payment before interest kicks in. If funds aren't readily available, you can still pay for uni and use that time to earn and set aside funds then make a partial or full payment. There are just so many options here.
On the question of whether I'd pay for my child's education, for me personally that's a yes, but only if he wants to attend. As much as I would like to force my child to earn a degree, I know that ultimately that is his choice.
Personally, I think it makes sense to get the children to take a tuition free loan for 4 years, and decide whether you should pay down the debt with your own money, and work out a payment plan, or let your kid shoulder the burden him/herself.
Why? Because things keep changing, and the money you may have set aside may be used for other emergency purpose. Getting an interest free loan is 1 way to juggle the need for cashflow.
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Hi @getitgt! Ah the perils of parenting - one of our community managers is a mum herself, so we've chatted about this topic before. Here's what she has to share:
"I think every parent would want to cover their child's education if they could afford to! However, it's not always the most ideal situation especially if one is working towards his/her own golden years. These days, it is also best to not rely on children as a 'retirement plan'.
A popular option for parents is to start with an endowment plan early that helps to protect savings, while making sure savings are in an account that yields the highest possible interest. This may be tough these days given the low-interest rate environment, so if you haven't already - strong encourage to consider investing in unit trusts, bonds, equities or Exchange Traded Funds (ETFs).
A good way to kickstart your child's financial literacy is sharing some ways he/she has to 'pay you back' if you're helping out first:
If using your CPF drawn under the CPF Education Scheme, this is to be paid back by your child with interest into your CPF account
If paying with your own cash upfront, work out a plan between both of you so that your child is responsible for paying you back once he/she starts working. This also gives them the responsibility to budget and account for repayments, food, transport, and so on, when they start working!
Of course, if your child is able to cope with studying/working part-time, it doesn't hurt to pick up some real-life experience while earning some money while they're at it. Good luck! "