The Cost of Education

Don’t have kids.

Children cost a lot of money if you didn’t know; my father always reminds me how much I have cost him over the years, even threatening to have kept “bills” from my upbringing, especially the costs of my schooling to get me where I am today. Nice guy. That said, education really is a substantial cost to think about when raising a child, often forgotten about when priorities lie with name-calling, nappy purchasing and battling the existential crisis of “oh gosh, what have I done?!


Let me be frank. Starting to save for your child’s education now is going to save you a bundle (of joy) in the future; the adage “sooner the better” applies as normal when it comes to funding your child’s education, as with any savings.

Allow me to scare you right off the bat with some calculations of higher education costs in the future—hint? It’s getting higher and higher…





Now, these figures are for sending kids in sought after places, for more of a “scare” tactic. That said, a growing number of youngsters are choosing to spend education abroad, backed by the desires of their parents, for the valuable skills and experience they will gain in the expanding global economy we are becoming — 51% of parents would consider university abroad education for their children.

Tertiary education is going to be expensive, anyway. But, as the images above visualise, if you haven’t had that little angel yet, or they are still young, you have time to save; if you start saving between $250-500 now, that will significantly aid toward their journey to higher education.

Quick note: I am not advocating that your child needs to attend higher education, as there are plenty of other options out there to consider. However, looking at the stats, here is what you can expect those costs to be if they go down that route so that you can start planning for it earlier.



Let’s now look at education costs overall.

The Value of Education

HSBC has created a thorough, global look at education in their “The Value of Education” report, which is definitely worth a read for any parent out there—the sooner, the better!

Let’s take a scan at their research:



Fascinating — but also, yikes!

My key takeaways from this :

About $45,000 USD is spent by parents on their child during their education alone, disregarding any support or loans that weren’t borne by the parent

74% of parents are funding their child’s education from day-to-day income, which means no dedicated savings and thus straight from the pocket, hence other sacrifices being made

Parents are keen for their children to study abroad and to postgraduate level, which means their costs will be significantly higher

I’m no parent, but this scares me already.

Although, what I have learned is the benefits of preparing early; we have a useful benchmark of $45,000 to work with here, which is a great starting point to save for new or prospective parents. Seeing that 75% of parents fund from day-to-day income, having a specific education pot stashed away would certainly take away the burden from your own jobs/careers, as well as not impair the funding of and quality of your “own” time or having to make drastic personal sacrifices.

Yes, yes, I am aware there are sacrifices to be made in having kids—I’m just saying you could make it easier with a bit of planning in advance. I believe you can never truly be ready to be a parent, but with the right research, you can prepare for events such as your child’s education, despite it seeming a long way away. Learn from those before you.


I mean, you’re saving for retirement, right? (I hope so!) This is just a similar type of long-term planning with a different target, for the sake of your children.


Okay, okay. You know starting early is going to prove beneficial to you and your kids. So, where to start? At its most basic level, a dedicated education plan. This doesn’t need to be anything fancy or bespoke, simply a regularly funded plan that will be used for the purposes of education. You could even ask your parents to start a savings plan for their grandchildren, whether born or unborn—do families still do that? Like with retirement or long-term planning, stashing away early and consistently is best.

That said, we can have clear targets when it comes to our children’s education. It doesn’t matter if you are in the early stages or already have kids, you can set up education plans to generate savings for when it is needed. Proactive parents might have started before even having kids, ready for their primary and secondary, even tertiary education. But, it is my hunch that most parents don’t even think about education savings until they have kids—remember, you gotta buy nappies and baby stuff now, yep?

This can shed light on why parents are funding their child’s primary and secondary education from day-to-day income, due to no prior preparation.

Again, everyone’s situation is unique, so for the benefit of a benchmark to aim for and how to achieve it, let’s use our handy $45,000 statistic; let us assume we are starting from nothing and wish to reach that target by contributing monthly savings:



The results are in! Now, I have assumed an 8% annual growth over the long term, which is a fair average to assume with the right savings scheme.

So, ~$250 a month over 10 years will gear you up with $45,000 that can be used for the sake of your little tyke’s education—not bad, eh? The model here shows the basic concept of regular saving over time, yet the main idea is that saving for your child’s education now will be of huge benefit to you and leave you a lot less to worry about when the child arrives and then needs it most.

Here’s another way we can view things: let’s decide we want to start saving from the child’s birth (hello grandparents) with the intention of stashing it away until they are ready for university, in 18 years.

What can we expect from a, say, simple $200-a-month contribution over the long term?


18 years of saving $200 a month, to save between ~ $90,000 to $145,000? That’s not bad at all for anyone, let alone for your child’s savings!

An amount like this should certainly help toward their tertiary education costs when they could do with it most.

I’m sure they would deserve it by then, as well…

Time to Act

It really is the same old song and dance: start early, save often.

However, it is easy to forget about the impact of education costs before it is too late, and they are rising.

There’s no “special” savings scheme that you need for education planning, simply the tried and tested practise of regularly stashing away of your savings. All I would suggest is that you have a separate plan in place so that you don’t need to eat into your income or your own savings for this purpose.

Again, pester your parents, or should I say, “soon-to-be” grandparents—that’s why they are there, no?

After all…what better gift is there than the gift of education?

If you’re looking for some friendly advice or for help setting up a savings plan, drop me an email at thomas(at) to see how I can help!



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