Starting A College Fund
Your Guide to Securing Your Child’s College Education

June 1, 2024 | by HC Mutual

Every parent’s dream is to see their child complete their education. After all, a diploma is a valuable asset that a parent can leave for their child to secure their future, especially in the Philippines.

Planning for your child’s college education takes long-term commitment. Essentially, a college fund is a way to invest in your child’s college education by regularly setting aside money to help pay for their schooling when it’s time for them to enter the tertiary level.

Simple enough, but once you look at it in terms of years and even decades of planning, it starts to sound daunting—but we’re here to help make it easy for you.
Here’s a simple guide to get you started:

1. Start Early

One of the most effective strategies for saving is to start early. The power of compound interest means that the earlier you begin saving, the more time your money has to grow. Even small contributions made consistently over time can accumulate into a considerable amount by the time your child reaches school age and into adulthood.

3. Set a Goal

Evaluate how much money you might need for your child’s college expenses. Research on the estimate of tuition costs of tertiary education and consider inflation, or in other words, how much the value might increase by the time your child is ready for college.

Also, consider the additional costs associated with college matriculation fees. Your child may be attending college in another location, necessitating the rental of a dorm or apartment. Depending on the path they choose in college, there might also be other fees like laboratory or miscellaneous fees. Take all of those factors to adjust the margins of your budget. This gives you a reasonable target to aim for.

3. Pick a Savings Plan

On top of traditional savings plans from banks, there are also other ways you can build a college fund such as saving under mutual funds, or college funds in the form of insurance plans. With various investment options available, families can look into the best plan offer that suits their specific financial goals and timeline. You can also consider having more than one college fund, depending on the risk factor of each.

4. Make Saving Easy

Set up automated transfers from your bank account to your college savings plan. This way, you don’t have to remember to put money aside—it does the saving for you automatically. Setting up a dedicated college fund also helps to make you less tempted to tap into it.

HC Mutual is here to help you achieve your future goals for your child and your family through disciplined saving: A dedicated savings plan, automated every month through salary deduction, so you can quietly set aside an amount that’s reasonable for you monthly and grow it through a higher interest than most traditional bank accounts.

Once you start saving with HC Mutual, you can also avail of our cash loan benefit, which gives you access to emergency funds, with a small loan interest, without tapping into your savings.

Secure your future through saving.

  • Start saving for as low as PHP 101 per payday.
  • Flexible savings plan of 3, 5, or 7 years.
  • 3% earnings from your savings per annum.

Earn more from your savings to reach your goals faster.

  • Start saving for as low as PHP 1,212, PHP 2,424, or PHP 3,636 per payday.
  • Fixed 5-year savings plan.
  • 5% per annum after 5 years upon completion of the plan.

Be prepared for financial emergencies.

  • Loan release within 24 hours of approval
  • Interest rate as low as 0.99%*
  • Flexible payment terms of 12, 18, or 24 months

5. Invest Wisely

You might also want to consider additional investments that can complement your college fund, such as investing in a business, or investing in stocks and bonds. However, securing your college fund must be your main priority. Investments with high risk should only supplement your dedicated college fund, to safeguard it even in cases where the market goes down.

6. Take Advantage of Tax Benefits

Certain savings programs offer tax breaks, such as exemption from taxes on withdrawals intended for education expenses. Research on these benefits to help maximize your budget, both short and long-term.

7. Encourage Family Contribution

Family members, like grandparents and your child’s aunts and uncles, might want to help contribute to your child’s college fund. Instead of buying lots of toys or gifts, you can request them to deposit it towards the college fund instead.

8. Keep Track of Your Progress

Regularly check how much you’ve saved and how your investments are doing. This helps you stay on track with your savings goals and make adjustments if needed.

9. Look for Scholarships and Financial Aid

Canvass which colleges provide scholarships or financial aid for college, whether private or public, as well as government aid programs that you may be eligible for. You can bookmark these options by the time your child applies for college.

10. Stay Informed

Keep up to date with changes in college costs and financial aid options. Knowing what’s out there can help you make smart decisions about saving for college.

Remember, saving for college is a long-term commitment, but every little bit helps. By starting early, being consistent with your savings, and making use of available resources, you can build a solid college fund and secure your child’s future.

SHARE

Share on facebook
Share on twitter
Share on email
Share on pinterest
Related Posts