I came across this shocking article in Gulf News about the amount of money need per child for education fees. 1 million dirhams is more than the price of a Ferrari Maranello. The summary of the Gulf News Article is below.
Have you started saving yet? If not, check this article on ‘The guaranteed savings plan I took for my daughter’
Excerpt from the article in Gulf News –
Couples who are still planning to start a family in the UAE need to start saving as soon as possible, with lifetime education costs per person estimated to reach approximately Dh1 million, enough to buy a small flat in Dubai.
Zurich Life has looked at the tuition fees at various schools in the country, as well as the related expenses incurred by parents, and calculated how much a household spends throughout the educational lifetime of a child. The resulting figure is a whopping Dh933,945.
“A typical family with two children could look at spending as much as Dh2 million on education,” said Amrita Sethi, head of marketing and communications for Zurich International Life, Middle East.
“While some employers in the UAE contribute to education costs at primary and secondary level, the majority of people are left having to pay these costs themselves, with 70 per cent of parents funding their child’s university education from day-to-day income,” Sethi said, quoting a research done by HSBC.
The estimated amount of lifetime education expenses is based on current costs and does not include compound interest rates. It covers 14 years of studying, from pre-school, primary school, secondary school to university.
Upfront education fees during pre-school alone could add up to Dh58,693.
By the time the child reaches primary school, parents should prepare to spend about Dh211,382 for a total of six years. At the secondary level, school fees for six years could set a family back another Dh258,315. For university, expenses can vary depending on where the child prefers to study.
UAE-based universities can cost Dh76,492 per year, much higher than the annual fees in the United Kingdom (Dh57,000). For US-bound students, the cost can go higher to Dh84,428 per year.
Then there are related expenses to prepare for when the child goes to university. According to Zurich, basic living expenses, including food, utilities, travel and daily essentials can reach Dh234,551 per student over three years. The figure is based on the average expenses incurred by a student taking up a three-year course in the United Kingdom.
“It’s a huge expense that, without proper savings and financial planning, is very difficult to meet and often at the opportunity cost of planning for other important goals, such as retirement,” added Sethi.
Parents are, therefore, advised to immediately kick start the habit of saving and plan accordingly before school-related expenses pile up.
“Committed financial planning will help families achieve these important saving goals. We are advising parents to start their savings plan today, if they haven’t already. Spread the costs over the long term with the help of a financial advisor and remain disciplined and committed to your plan at all times,” Sethi told Gulf News.