Children's Educational Plans (2)
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Children's Educational Plans -- The third step is calculate how much protection is needed in planning for children's education in case the risk is already mentioned above, this children's education funding plan can still work as expected.
Well, the question is which is the better insurance education? It's can only be answered by a new question : which the most effective insurance education and the extent to which such insurance is financially competitive (value for money) to meet the goals, based on children's education planning process.
Indeed, the cost of the school year continues to increase. Even a limited survey increase in school fees is always summed over inflation. So, if our current state of inflation of about 6-7% per year then the rising costs of education, particularly the cost of tuition, much larger, around 15% - 30% (depending on the school, when popular schools the higher gains). One reason is the high level of demand for schools, particularly schools, although not necessarily the favorite favorite school is a school of quality.
One of the economic law, is the law of supply and demand, also apply here. The greater the demand, the price of a product will be more expensive. And vice versa. In fact, there is a school located in the elite residential complex in Jakarta satellite that sets tuition fees and school fees are very high. This happens because the school was regarded as one - the only grade school in the region. Thus, planning for education funding is a necessity. The earlier the better. If we do not do planning our children's education early on, then eventually every time our children will attend school, then we will look for a loan.
So it's your need to make planning of your child since three years is appropriate. Let's we will try to find the solution and several steps or processes in this plan.
1. Determine when funds are needed. Suppose your child's current age is three years and the age at which funds are required is 15 years (for entering high school). Thus you still have 12 years to save or invest with the goal of setting up the fund.
2. Determine the amount of funding needs of today and the future. You've mentioned that the cost of entry into a private high school with medium quality is $ 1,000 up to $ 1,500. But today it is cost (present value), when in fact it needs real funds are in the future, which is 12 years from now. Therefore, we need to know how much these funds in the next 12 years. To calculate it, we need to take the magnitude of the inflation assumption, for example 15%.
3. Determine the amount of funds that need to be saved per year or per month. Once you know the amount of funds needed, then you can calculate the amount of funds that need to be saved per year or per month to reach financial goals. Also necessary to take an assumed rate of return or interest for the purposes of this calculation (of course the yield or interest exists in real terms, in other words, any financial instrument which has a rate of return for that and must be greater than inflation assumptions have been used) .
Children's Educational Plans -- The third step is calculate how much protection is needed in planning for children's education in case the risk is already mentioned above, this children's education funding plan can still work as expected.
Indeed, the cost of the school year continues to increase. Even a limited survey increase in school fees is always summed over inflation. So, if our current state of inflation of about 6-7% per year then the rising costs of education, particularly the cost of tuition, much larger, around 15% - 30% (depending on the school, when popular schools the higher gains). One reason is the high level of demand for schools, particularly schools, although not necessarily the favorite favorite school is a school of quality.
One of the economic law, is the law of supply and demand, also apply here. The greater the demand, the price of a product will be more expensive. And vice versa. In fact, there is a school located in the elite residential complex in Jakarta satellite that sets tuition fees and school fees are very high. This happens because the school was regarded as one - the only grade school in the region. Thus, planning for education funding is a necessity. The earlier the better. If we do not do planning our children's education early on, then eventually every time our children will attend school, then we will look for a loan.
So it's your need to make planning of your child since three years is appropriate. Let's we will try to find the solution and several steps or processes in this plan.
2. Determine the amount of funding needs of today and the future. You've mentioned that the cost of entry into a private high school with medium quality is $ 1,000 up to $ 1,500. But today it is cost (present value), when in fact it needs real funds are in the future, which is 12 years from now. Therefore, we need to know how much these funds in the next 12 years. To calculate it, we need to take the magnitude of the inflation assumption, for example 15%.
3. Determine the amount of funds that need to be saved per year or per month. Once you know the amount of funds needed, then you can calculate the amount of funds that need to be saved per year or per month to reach financial goals. Also necessary to take an assumed rate of return or interest for the purposes of this calculation (of course the yield or interest exists in real terms, in other words, any financial instrument which has a rate of return for that and must be greater than inflation assumptions have been used) .
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