It’s best to be transparent about money matters if your family is going through financial difficulties.
Keeping any member of the family in the dark would be a bad idea, as it’s best that every member of the family cooperates with helping to cut costs.
Explain the financial situation to your children in a way that they will understand and use this opportunity to teach them about the importance of saving money from a young age.
Find new ways to bring in additional income and cut costs
You may want to consider taking up an additional job or asking one of your teenage children to get a part time job to help out at home.
If you’re strapped for time, you may want to consider starting a home business like selling baked goods through a website or selling second hand items through EBay.
Sit down with your spouse and look through your bills to identify areas where the both of you are comfortable to cut costs.
Set reasonable goals
Calculate how much your child would require for his or her higher education, taking into consideration factors like inflation and eligibility for scholarships.
Once you know how much you will need, start to set achievable goals for you and spouse and aim to save a certain amount by the end of every year. Open up a separate bank account for your child’s education fund and put aside a small amount each amount. Ensure that neither you and your spouse withdraws any money from that account unless it’s a dire situation.
It’s never too soon to start
Starting as early as possible will also improve your chances of reaching your goals. For example, if you put aside $83.30 a month, that adds up to $1000 a year. If you start saving from the month your child is born, by the time your child turns 20, you would have about $20 000 to contribute to her tertiary education. Your savings will accumulate over time and your financial situation may improve, so don’t be discouraged if you can’t put aside a huge amount each month.
Explore all options
You may want to consider the CPF Education Scheme, which will allow your child to pay for his tertiary education at an approved institution. Your child will have to pay this back in cash, one year after his date of graduation or date of leaving the institution, whichever is earlier together with accrued interest.
Singaporean students enrolled for full time undergraduate/diploma courses are also eligible for the MOE Tuition Grant that subsidises about 55% to 80% of the total tuition fee.
Financially needy Malay undergraduate students are eligible for subsidies of about 50% to 100% under the Mendaki Tertiary Tuition Fee Subsidy and Singapore Citizens can use the remaining funds in their Post Secondary Education Account to contribute to their university fees.
Individual institutions may also offer their own student loans or subsidies so make sure you research your options thoroughly to make an informed decision.