Your child can’t wait to grow up.

You shouldn’t wait to grow your funds too. 

When he turned 4, he aspired to be a fireman. At 6, an astronaut. Who knows what he’ll aspire to be tomorrow? His aspirations may change but one thing you know for sure, you want to give him the freedom to choose his path and the liberty to pick the education and college that will provide the best tools to shape his future.

But the scroll and mortar board are still a distant dream. College years are far off. Your child is still young. You may feel that you have ample time to start saving later.

However his birthdays can quickly pass you by and in no time, your child will be reviewing college brochures. Will you have your funds ready by then? Unfortunately, according to the HSBC Asian Insurance Monitor, 1 in 5 parents may be ill-prepared as they foresee having to borrow in order to pay for their children’s education. Their children’s education choices may then be limited to the amount of money they can borrow or only to colleges that can offer financial assistance. 

With sound financial planning and by starting early, you can ensure that your child has the option to choose when it comes to quality education.

Your child’s future won’t wait for your funds to catch up

You should not miss out on some of the benefits of saving money as early as you can, such as the following:

• Sufficient time to accumulate sufficient funds

Due to the rising cost of education, the amount that you may need to accumulate for an overseas education can reach as high as USD100,000 per child². Setting aside regular and disciplined contributions in an education savings plan over a longer period makes it easier for you to reach the sum anticipated for your child’s education.

• The ability to leverage on the power of compounding interest

Compounding interest simply means reinvesting your interests into your total investment amount. Over time, your savings will grow exponentially, as you’ll not only earn interest on your principal amount but also on the reinvested interests.

• Even out ups and downs over time

If time is on your side, you can potentially withstand a bit more volatility in the bid for higher returns. For example,you can benefit by investing consistently in investments, over a longer period of time by applying the Dollar Cost Averaging strategy. By investing regularly over time, you may get more units when the price is low and fewer units when the price is high, resulting in a lower average cost per unit.

• Protect your child’s education even when you can’t

By signing up for a Takaful education savings and protection plan early, you may have the assurance that your child’s education is not compromised, even if a mishap occurs to you. In some plans, the future contribution may be waived or a lump sum may be paid to relieve your family of the financial burden should anything unfortunate happen to you.

Your child is growing up before your eyes. Ensure that your funds are growing along with him. Talk to us today and start planning for your child’s future with our wide range of investment and protection plans available for you. Visit your nearest HSBC/HSBC Amanah branch or hsbc.com.my/hsbcamanah.com.my for more information. 

Source:

1. HSBC Asian Insurance Monitor, January 2010, conducted by AC Nielsen for the HSBC Group from July to August 2010, asiainsurancereview.com

2. HSBC Affluent Asian Tracker, June 2009

September 2011