As the new school year approaches, learning resources are one of the most important things to prepare for. As the tendency of parents’ awareness to prepare funds for their children’s education is increasing, the fact is that the cost of necessary education is also increasing.
Therefore, the problem of preparation for education is not just choosing an educational institution that suits the character of the child. However, it must be balanced with financial capacity so as not to interfere with other financial aspects of the family, including taking into account risk factors that can make it difficult to prepare children’s learning resources.
The following are some of the risks that often become obstacles in the optimal preparation of funds for children’s education:
- The risk of poor educational planning
When deciding to get married and have children, the child’s educational background is an important consideration and agreement with the couple. This calculation includes the value of the costs of pre-school education, from primary to higher education, which are then distributed on a regular basis. Make sure the budget allocation plan has been considered, including choosing the right school. There is nothing wrong with knowing in advance the amount of tuition, course fees, even the cost of buying school supplies such as uniforms, textbooks, for the estimated costs needed for transportation to and from school.
- Risk of inflation in early childhood education spending
In addition to financial planning with regular resource allocation, another factor to consider is the value of inflation for educational needs. According to data from the Central Bureau of Statistics (BPS) in 2021, the average inflation costs of primary and secondary education will be 10-15% per year and at university level 30-45% per year. To no longer keep up with the magnitude of inflation, early childhood savings can be allocated to various investment vehicles to gain interest benefits ranging from deposits, gold to mutual funds. Remember that the education of children is the most important need to be met. Therefore, as far as possible, avoid allocating training funds to high-risk investment vehicles so that training funds remain safe.
- The risk for the child’s education fund guarantor. Another factor to consider is the risk of being responsible for the cost of raising the children, who are usually the parents. It is undeniable that parents also play an important role as caregivers, including by covering the costs of raising their children. If the sponsor of the child’s education fund encounters barriers to support, such as illness, permanent medical records, or death, there is a good chance that the child’s education will also be affected. Therefore, it is important to limit the risks that can arise at any time so that children can continue their education. This risk can be mitigated through personal and family protection obtained through life insurance products.
We hope that the new school year can provide an incentive for parents who bear the costs of their children’s education to carefully prepare learning resources and consider various risk factors that may arise so that their children’s education can run smoothly.