Millions of parents worldwide aspire to send their children abroad for higher education. The USA and the UK colleges and universities have lured international students for decades. Finances are one of the most overwhelming factors regarding your child’s overseas education. However, proper planning and management of funds help safeguard your child’s overseas higher education dream.
Higher education from an overseas college or university is not cheap; to afford the same, you must save and invest accordingly. This blog offers some tips about how to manage funds for your child’s study abroad dreams.
How to Plan for Your Child’s Higher Education Dream in an Overseas Institution?
Enlisted are five things you must keep in mind when planning finances to support your child’s overseas education dream.
Estimate the entire cost of higher education
Consider the college tuition fees and the way you want to pay the fees. The other factors of expenses, such as accommodation, food utilities, and transportation, as your ward needs to settle and start a new life overseas. Making the transition as easy as possible helps manage the budget and break it down into smaller, manageable goals.
Start early and think about long-term financial planning
You must start planning early for your child’s international education. As parents, you might require making some personal sacrifices so that your child can reap the benefits of international education. Review your spending history and try to cut back on non-essential expenses. You can start saving funds for your child’s education regularly; for example, a fixed amount every month is ideal. Moreover, investigate the possible avenues for investing and saving. Figure out if saving a part of your regular income would meet the long-term educational requirements of your child.
During the advanced financial planning process, consider the colleges and universities where you want to send your child. If you plan to send your child to popular education destinations, remember that they have a higher cost of living. Consider the differences in the cost of living and incorporate these details into your plan at the beginning. Saving and investing early helps minimize your chance of borrowing funds and lowers the impact on your future financial health.
Consider the Inflation and exchange rates
If you want to send a child to a US university or college, remember for decades, the US dollar has been one of the world’s strongest currencies. Every other currency started depreciating against it over time. If you are from a developing country, assume that the trend will also hold for your home currency in the future. Therefore, irrespective of the time you send your child abroad for higher studies; consider your country’s inflation rate and the possible depreciated movements in the study abroad plan. Research your country’s past inflation and depreciation patterns, and use the information to calculate the extra amount you require adding to the educational savings funds to start accumulating for your child.
Select the right investment options
Although you have time for your child’s overseas education journey, creating an education fund from the current regular income might not support your child’s future needs. It is because the living costs are likely to increase in the future due to several factors, including inflation and exchange rate movements. To mitigate the effects, you need to find Additional sources of funding at present, which must be above your salary income.
To fulfill your child’s dream, early research and investing in medium- and long-term investments are crucial. While investing, invest according to your risk appetite and investment capability. You can opt for several plans, including mutual fund-based Systematic Investment Plans (SIP), education savings, investment plans, and education-specific education vehicles. Besides starting early, you also need to diversify your investment portfolio.
A diversified approach, focusing on the future, helps design a dynamic investment strategy. It further helps change your asset allocation, including real estate, gold, debt, and immovable assets depending on the fluctuations in domestic and international markets.
Consult an investment expert or study abroad expert
Planning your child’s overseas education can be overwhelming for most people. Although you start early, prepare a budget, create a costing plan, and research available investment options might make you feel a little stressed out and hinder your strategy and action plan.
If you ever experience such a situation, it is best to talk to a professional. Investment advisors and study abroad experts can help you explore other options and draw a more comprehensive and realistic plan. They help explore new options you are unaware of or did not consider in the past.
Planning the practical details of your child’s overseas higher education requires a mind-blogging array of details. However, with systematic planning and a pragmatic approach, you can help your child fulfill the dream of studying in an overseas college or university.
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