Jakarta, Armfalcon.com – It doesn’t feel like it, soon we will enter the New Academic Year 2023/2024, many of you are of course busy preparing yourself for the costs that arise related to your children’s school fees.
Please know that costs will continue to rise over time, this certainly cannot escape all of your attention.
According to data from the Central Statistics Agency (BPS) every new school year there will be an increase in inflation from the education sector. For example, in August 2022, education cost inflation was recorded at 2.38% when viewed on an annual basis.
However, not a few financial experts say that initial fee inflation in Indonesia can reach 10-15% per year. Meanwhile, an increase in one’s income may not necessarily reach 15% in a year.
So what is the smart way to collect education costs for children? Here’s the full review.
Calculate the current and future entry fees according to the timeframe
We will never know the exact number of increases in education costs in the future. To make the calculation process easier, it doesn’t hurt to calculate the entrance fee for each level this year and in the future (when your child has entered that level).
If seen from the table above, a person has a duty to collect Rp. 517 million for their child’s school entrance fee. Funds of Rp. 517 million must be collected in stages according to the child’s education level.
Invest in several instruments
Always remember that the longer the investment period, the more flexible you can choose financial instruments, be it low, moderate or high risk.
However, it is highly recommended for you to place your funds predominantly in high-risk instruments so that your long-term return is also quite large.
If you are diversifying for the long term (high school and college tuition), you can choose stock, index, or stock mutual funds as instruments with high risks and returns. Meanwhile for low risk, you can use gold.
Meanwhile, for the short term or under three years, you can use money market mutual funds or bank savings.
Have health insurance
An illness can certainly make you lose your savings and assets because of the high cost of medical expenses.
Just like the initial fee, medical costs also continue to increase over time. And it is not wise if you use personal savings for treatment.
Having health insurance is an important thing to do to overcome this. If insurance premiums are considered too expensive, just make sure your BPJS Health premiums are still paid.
Protect yourself with life insurance
There will be no definite return on investment, but death is certain. Your efforts to collect child education costs may fail if you experience total permanent disability, or die.
When that happens, it is likely that the family will lose income and find it difficult to raise money to pay for their children’s schooling.
By having life insurance, there will be liquid sum assured if you experience a disaster as mentioned above.
Buy life insurance with a sum insured of 150-200% of the estimated school fees for your child in the future so that your dream of sending your child to school doesn’t just go awry.