Five steps for your children's education plans
Related Topic :
Five steps for your children's education plan - Cost of education is becoming increasingly greater. Therefore, education cost should be plan in advance. Families who already understand about families need spreads and have better financial planning usually have been prepare education cost since the child was born.
There are a number of phases in the preparation of children educational cost. First, determine the child's school. Families should know clearly the desired education for the children and adapted to the abilities of children. Families can not push-up the children to attend schools in which standard value is far above the ability of the child.
Second, calculate all of its costs for children's education. Families should gather information on the costs required for the education of children. The fee includes tuition, cost of development, recreation fees, the cost of books and other expenses.
Third, determine the rate of inflation from now until the child goes to school even when children are studying in school. The inflation rate can be calculated by using the current inflation rate assumption. When today the inflation rate is too small, the estimated inflation rate should be raised. If this year we have inflation of 5%, the family should raise inflation of about 6% to 7%.
Fourth, calculate the applicable interest rate in the future. Interest rates are predicted in the future can not be separated from the estimated rate of inflation. The interest rate is a reflection of the prevailing inflation rate. Therefore, families must obtain a desired real interest rate the government each year. When the desired real interest rate of government about 1% to 2%, the interest rate applicable is the result of the real interest rate with inflation. When inflation is 7%, the applicable interest rate of 8 percent to 9 percent.
Fifth, determine the amount of savings made. If the funds needed have been determined and the amount of time to get to school children, the family can determine the amount of savings each month. For example, families need of $ 7,500, of which these funds are needed in five years or 60 months, then the funds should be set aside from the monthly family income of $ 125. That is, funds amounting to $ 125 million of savings are kept under the pillow, have not been bred through investment. When families make an investment, funds set aside will be smaller and very good if more time to invest.
When we must make a choice of investment, families can invest themselves or place it on the investment manager and also combine it with insurance. When investment used by itself, investors need an investment of knowledge and takes time. When deposited, the family should get a broader, better interest rates and banking conditions in question. All actions must contain a family of risk and should be understood.
Insurance education
When choosing a family insurance education, it should be realized that in addition to paying insurance policy, the family also invested. Useful insurance policy to pay tuition fees if the family could no longer pay the mortgage investment. This inability may be due to the insurer can not work or died.
When families take out insurance, family expenditures for education fund savings will be greater. On the other hand, the family does not need to thinking about investments that will be done in order to achieve the desired educational cost. Future risks have been transferred to the family through the payment of insurance policy. However, insurance is not required if the family knows exactly health and uncertainty in the future. Families should know precisely the ability of households to be able to provide the education fund.
As described above, in preparing for the children's education plan, the family will be at risk, whether the risk of tightening expenditure, investment risk, and risk funding needs swelling because of the situation. Families should be prepared to address these risks by carefully watching the children's education cost. (*)
Five steps for your children's education plan - Cost of education is becoming increasingly greater. Therefore, education cost should be plan in advance. Families who already understand about families need spreads and have better financial planning usually have been prepare education cost since the child was born.
Second, calculate all of its costs for children's education. Families should gather information on the costs required for the education of children. The fee includes tuition, cost of development, recreation fees, the cost of books and other expenses.
Third, determine the rate of inflation from now until the child goes to school even when children are studying in school. The inflation rate can be calculated by using the current inflation rate assumption. When today the inflation rate is too small, the estimated inflation rate should be raised. If this year we have inflation of 5%, the family should raise inflation of about 6% to 7%.
Fourth, calculate the applicable interest rate in the future. Interest rates are predicted in the future can not be separated from the estimated rate of inflation. The interest rate is a reflection of the prevailing inflation rate. Therefore, families must obtain a desired real interest rate the government each year. When the desired real interest rate of government about 1% to 2%, the interest rate applicable is the result of the real interest rate with inflation. When inflation is 7%, the applicable interest rate of 8 percent to 9 percent.
Fifth, determine the amount of savings made. If the funds needed have been determined and the amount of time to get to school children, the family can determine the amount of savings each month. For example, families need of $ 7,500, of which these funds are needed in five years or 60 months, then the funds should be set aside from the monthly family income of $ 125. That is, funds amounting to $ 125 million of savings are kept under the pillow, have not been bred through investment. When families make an investment, funds set aside will be smaller and very good if more time to invest.
When we must make a choice of investment, families can invest themselves or place it on the investment manager and also combine it with insurance. When investment used by itself, investors need an investment of knowledge and takes time. When deposited, the family should get a broader, better interest rates and banking conditions in question. All actions must contain a family of risk and should be understood.
Insurance education
When choosing a family insurance education, it should be realized that in addition to paying insurance policy, the family also invested. Useful insurance policy to pay tuition fees if the family could no longer pay the mortgage investment. This inability may be due to the insurer can not work or died.
When families take out insurance, family expenditures for education fund savings will be greater. On the other hand, the family does not need to thinking about investments that will be done in order to achieve the desired educational cost. Future risks have been transferred to the family through the payment of insurance policy. However, insurance is not required if the family knows exactly health and uncertainty in the future. Families should know precisely the ability of households to be able to provide the education fund.
As described above, in preparing for the children's education plan, the family will be at risk, whether the risk of tightening expenditure, investment risk, and risk funding needs swelling because of the situation. Families should be prepared to address these risks by carefully watching the children's education cost. (*)
.gif)
.gif)
