Child Education Planning – My Younger Son

Every student enters secondary school with the potential to continue his or her education after graduation. While some would prefer to be educated at local university, others may want to seek higher learning abroad.

However, most parents are finding it difficult to put together a realistic financial plan as foreign and local university costs are escalating annually. The respective Central Banks of various countries also shown that, inflation is growing at an average rate of 3 percent per annum.

As an illustration, here I would like to share with you my university education fund planning for my younger son who was born 6 months ago.

Basic Information
Child Name :Irsyad
Child Age :0 Year Old
Age to Enrol University :18 Years Old
No of Years Left to Enrol University :18 Years
Name of University Intended to Enrol :University Malaya
Field of Study Intended To Enrol :Medicine
Number of Years to Complete The Study :5 Years
Current Tuition Fees Per Year :RM 2,000.00
Current Living Cost Per Year :RM 6,000.00
Total Current Cost Per Year :RM 8,000.00
Total Current Cost to Complete Intended Study :RM 40,000.00

Calculating Future Cost Due to Inflation
Average Inflation Rate Per Year : 2.6%
Total Future Cost to Complete Intended Study : RM 63,491.05

Single Investment I Made Yesterday For My Son
Total Future Cost to Complete Intended Study :RM 63,491.05
Expected Investment Rate of Return :10%
No of Years Left to Enrol University :18 Years
Amount I Invested Yesterday :RM 11,420.00

Simple Analysis
Total Future Cost to Complete Intended Study :RM 63,491.05
Total Amount Invested over the period :RM 11,420.00
Total Return (Compounded Interest) :RM 52,071.05