Budgeting tips for parents. All you need to know
Millions of students from all over the world enroll in colleges abroad to broaden their horizons, develop their cross-cultural skills, and sharpen their language abilities.
The majority of parents are devoted to paying for their child’s overseas education and are ready to make personal sacrifices; this is true not only for primary and secondary school but also for postgraduate study.
Even though this attitude is commendable, many parents are unaware of the costs associated with sending their children to an international university in the future.
Countless students and their parents struggle to make their study abroad dream a reality due to poor or late planning and a relative lack of knowledge.
Here are some financial planning strategies that parents may use to make their children’s study abroad experience a little less stressful and a little more productive.
With the help of these suggestions, you can assist your child in realizing their dreams while simultaneously preserving your long-term financial security.
1. Include cost forecasting in your plan
Tuition is not the only cost of studying abroad. Your initial budget may increase significantly as a result of additional expenses such as student health insurance, academic materials, cost of living (housing, food, transportation), and entertainment. When creating your strategy, be sure to take these costs into account.
Planning and budgeting are likely to go more smoothly if you anticipate increased prices and make additional savings as opposed to making smaller savings now in the hopes that they would be sufficient later.
Adopting a pessimistic outlook will increase your prospects of building a future capital that is more than the real costs at that point.
And the less you have to borrow at interest (like an education loan) when the time comes, the more you may give from your own savings or investments. This would not only reduce your overall debt load but also speed up your repayment process.
2. Consider long-term financial planning
Planning is extremely important. As soon as you can, begin making plans for your child’s international education. You may need to make certain personal sacrifices as a parent right now, so start looking at your spending patterns and reducing non-essential spending.
Set aside money for your child’s education, and do it regularly. Additionally, look at other options for saving and investing.
Also, explore the places you might want to send your child as part of your financial planning in advance. Highly developed nations like the USA, Canada, the UK, Australia, and others are the most sought-after locations for higher education.
The higher cost of living must be taken into account, and you must therefore include these aspects in your plan from the very beginning.
3. Consider inflation & exchange rates
The US dollar has been among the strongest currencies in the world for many years, with practically all other currencies slowly losing value against it.
You should anticipate that this will continue in the future for your currency as well. Therefore, regardless of when you intend to send your child abroad to study, you must account for inflation in your nation and potential depreciation of your currency in your study abroad budget.
EduFund’s College Cost Calculator can help you figure out the average total amount you will require when you send your child to study abroad, factoring in inflation and exchange rates.
Longer time frames provide you greater freedom to invest in high-risk assets like equity, which can assist you in the long term to fend off the impacts of inflation and currency rate fluctuations.
Additional read: Saving tips for young adults
4. Find the best investment strategies
Even though your child’s international trip is years away, simply set up an education fund with your current regular salary might not be sufficient to cover your child’s future needs.
The living costs will probably increase from where it is today in the future. You need to start looking for extra sources of money right away that are separate from your (and your partner’s) salary income if you want to lessen the impact of these potentially increased costs.
As a result, you should look into medium- and long-term investment opportunities that you may begin making as soon as possible. Recognize your investment capacity and risk tolerance, and make investments accordingly.
Our financial advisors can assist you in your search for mutual fund-based Systematic Investment Plans (SIP), education investment, or savings plans specifically designed for education.
5. Consult an expert investment advisor
Most people find the process of preparing for an international study abroad to be intimidating. You can still feel completely unprepared with your action plan and strategy even if you start early, set a budget and a costing plan, and examine the many investment possibilities.
Talking to a professional may be a good option if you feel stuck. You can explore your possibilities and create a more thorough and practical strategy with the assistance of our investment advisors and study abroad experts.
You might even discover new choices that you hadn’t previously known about or hadn’t considered.
A study abroad plan for your child can include confusing aspects of financial considerations, but with systematic planning and a practical mindset, you and your child can both benefit in the long run from pursuing this desirable goal.