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Planning ahead for your children's education

Mapping your journey

Where to begin?

Depending on the goals you have for your children and considering the high inflation rates school fees have experienced in recent years, you may need a longer time horizon for education planning to ensure that you are financially ready.

1.Work out how much you need

The first step is to set target dates and the education funds you will require by these dates. It is also important to consider inflation rates while calculating the amount of funds you may require in the future.

2.Plan ahead

Decide on your monthly saving amount and your intended investment tenure. If you start early, the power of compounding will allow you to save in smaller amounts in order to make sure that you achieve your goal.

3.Access the wealth solutions available

Hong Kong parents would ideally allocate 45%1 of their funds to their children’s education, it is important that you consider your time horizon and risk appetite before making investment decisions. It is a prescribed practice to invest in well-diversified portfolios rather than putting all your investments or savings in one single asset.

4.Safeguard your education fund

Make sure you and your family are well protected against misfortunate event of death and your education funds will be kept intact in such case. Safeguarding your education fund is important. Your children's education should be secured in case of unfortunate events.

5.Manage and monitor

Make sure you always keep track of your investment and insurance plan for your children's education to ensure it is performing in the way you want. Monitoring your portfolio at regular intervals can help you rebalance your portfolio at the right time.

1Source: 2014 HSBC The Value of Education Report

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