Abu Dhabi, UAEFriday 22 February 2019

Create a strategy to fund your child’s education

Saving for your child's education is key not only when they are young but when they attend university.

Could you eat an elephant? More important, what’s eating an elephant got to do with my child’s education?

Without a doubt, one of the most rewarding things in the world is parenthood and as a parent, you naturally want to provide the best you can. While it is fun to indulge children with expensive nursery products and toys, saving for their future has to be considered too.

Here in the UAE, some expatriate remuneration packages allow for children’s education but if not, the cost can be anywhere in the region of Dh10,000 to Dh100,000. When a child moves on to pursue higher education, they will require even more financial support from parents or worse, a loan.

CNN Money recently reported that people without a university degree were more than twice as likely to end up without jobs and that over a lifetime, the earnings gap between a high school diploma and degree graduate is more than Dh800,000.

There is no doubt about the freedom an education can provide, but in the UK, for example, it is estimated that by the end of the year, the average student debt will be equivalent to Dh96,000, which could take a lifetime to pay off. So here is a checklist to planning for your children’s education:

1 Ask yourself what you want for your child

Saving for your children can help give them a great start in life. It’s important for children to learn about money matters when they are young, and saving is an excellent habit to encourage in youngsters – even if they just start off with a savings bank.

2 Consider your child’s needs at every age.

Day care and nursery can be very expensive. Ensure you do some research to find the best option price-wise that caters for the child’s needs.

3 Talk to your HR department

Many companies provide an education allowance for children, so make sure you are claiming yours.

4 Plan for your child’s future past the age of 18

Will your child be going to university and do you hope they will excel and obtain a degree? As a parent, this is something you will need to fund, or a student loan will have to be taken out.

5 Explore overseas options

The fees at universities in America are the most expensive and it can cost as much as US$50,000 a year for a child at a top university. The other consideration is that when a young adult reaches the further-education age, parents are often entering the later stages of their careers and will want to focus on retirement and not more expenses for their youngsters’ education.

6 Stay up to date with residency requirements in your home country

Some countries require residency or proof of residency for up to three years before enrolment in order for a person to avoid having to pay the foreign-student tuition rate, which can be much higher than the rate for resident citizens.

7 Start early

If you plan ahead and start saving early, you will achieve the desired amount you need for further education with little worry. The earlier you start, the easier it will be; a bit like eating an elephant, one bite at a time.

8 Be realistic

Consult a financial planner and discuss what a sensible amount for you to save would be.

9 Look for a tax break

Find out if you can claim any tax exemptions for tuition fees paid.

10 Teach your children how to manage their finances

If they are going to university for the first time, they will need to know how to budget. And remember that young people’s money habits are greatly influenced by their parents’ financial behaviour.


In the end, financial planning for a child’s education is about creating a long-term, coherent strategy for you and your family. It is about giving you peace of mind that you are “on track” and doing all the right things with your finances to help shape your child’s future.

Without clear, and shared, aspirations there is a real risk that you will look back in 10 years’ time and say: “If only we had … ”

Andrew Prince is a financial planner for Acuma Independent Financial Advice

Updated: January 24, 2014 04:00 AM