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Zhi Finance » The university education fund is set up as soon as the child is born

The university education fund is set up as soon as the child is born

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The best time to set up children’s education fund is when you are just married and ready to have children. If you haven’t set up a college education fund yet and your child has been born, let’s seriously figure out how to start setting up a college education fund.

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Even if you don’t save money for your children’s college education, they can still go to college, but their choices are limited (unless they have excellent grades). If you save for your children through long-term savings, they will have more choices. If you want to make sure that children can choose any school in the world that enrolls them, be prepared.

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If you want to pay $10000 for your child’s college education when she is 18, you must save $29 per month (assuming the interest rate is 5%, you can earn a 5% return in most mutual funds that focus on medium-term bond investment). Remember, over the past two decades, the rate of increase in college tuition is higher than the general inflation, so “29” dollars is far from enough.

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It’s hard to estimate how much you really need to spend. It can be speculated that the upper limit is to spend $300000 to let your child go to Ivy League University in 18 years, which means you must save 30 times of $29 a month, or $870.

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Or you can let your child go to a local university and stay at home. After deducting the cost of accommodation, the cost can be greatly reduced. Depending on your state and university, you may be able to pay for four years of college tuition, book fees and other expenses with $50000. That means you only need to save five times as much as $29 a month, or $145.

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If you can’t save that much, do your best. You can save $20000 by saving $58 a month for 18 years. Combined with stay at home, financial aid, summer work and part-time work, children can finish college without applying for student loans.

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Don’t take it for granted that you can borrow money to help your children go to college. You may be able to borrow money, but the consequence is that the debt will make the children under heavy pressure, unable to safely absorb the nutrients needed for career development from college education, or affect your happy retirement life.

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If you only need to borrow a little money to step up the gap between your savings and other sources of income (donations, scholarships, summer jobs and part-time jobs) and your child’s college tuition, there is no problem. If the loan only accounts for 10% to 20% of the tuition, it will not destroy your retirement life and the life of your children. If there is no other way, consider applying for a student loan to fill the gap. But don’t let student loans become the only source of college tuition.

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Start the savings plan as soon as the child is born. When the child is 18 years old, you can give her better college education opportunities.