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The Price of Childhood Education

20 Mar 2014 
SOURCE: Yong Hui
My daughter will be starting pre-nursery next year, so recently I started researching on the preschools available in Singapore.

That was when I realised there is such a wide spectrum of preschools out there, ranging from MOE registered ones like PCF and religious bodies’ kindergartens to the private centres and international schools like Mindchamps and EtonHouse Preschool.

The price to pay..

The range of school fees for Singapore’s childhood education is amazing.. They can start from as little as $70+ per month (and I heard it will get even lower for some with the new kindergarten subsidies). On the other end of the spectrum, you have school fees that can go as high as $1600 per month. That’s a difference of over 20 times!

Despite the high rates, it seems like many parents are willing to pay the premium for the high end, branded preschools, for various reasons. Even if this comes at the expense of the parent’s own needs.

I often hear young parents say they have limited funds to save for retirement because they need to pay for their children’s enrichment classes. I have also come across cases where parents delay getting their own insurance coverage so they could focus on their children’s education savings instead.

As a mum myself, I can understand parents’ desire to provide the best for our children. However, if we truly want the best for our children, we parents need to also take care of our financial well being, so we will not become a burden to our children in future.

Imagine if after all that we have done for our children, giving them the best education and grooming them for a successful life.. yet just when our children are ready to take off, they find themselves saddled with our medical bills and forced to give up their dreams to support us.

Is this the kind of future we want for our children?

I’m sure given a choice, most parents want to be financially independent in their old age and allow their children the freedom to pursue their dreams. The question is how to achieve that, given the multiple demands and financial constraints that many parents face.

 The key lies in planning early and making sound financial decisions along the way. And it starts by being aware of the impact of the choices we make and choosing wisely.

Let’s take a look at the difference in terms of the choice of early childhood education

The difference a choice can make

Consider two couples Mr & Mrs Tan and Mr & Mrs Ng. Both couples are in their 30s and have similar levels of combined income. They each have a 3yr old daughter who will be attending pre nursery.

Mr and Mrs Tan decide to send their daughter to a more premium pre school, paying $1000/mth for the school fees. Mr and Mrs Ng chose another kindergarten that charges just $300/mth, and they save up the difference of $700 each month for their future instead.

This means that Mr & Mrs Ng will be saving up an additional $8,400 every year compared to Mr & Mrs Tan. Over the next 4 yrs, that translates to an extra savings of $33,600. If Mr & Mrs Ng invest this sum of money and compound it at just 5%p.a for the next 25 years, that will become an additional nest egg of $113,781 for their retirement!

Now you see how a small difference in a choice can have a huge impact over time. So next time before you make any decision about a major spending or commitment, ask yourself – Is this really necessary? Will this decision lead me closer or further away from the future I want? And consider if there are other more cost effective alternatives to fulfill your short term and longer term goals.

The choice I made

For my daughter’s pre-school selection, my husband and I asked ourselves what was most important to us in selecting a school. We both agreed that what matters most is that our child can learn, grow and interact with other children in a nurturing, happy and fun environment.

In the end, we chose a kindergarten near our home which has a large open area for the kids to run and play. The teachers seemed patient, nurturing and the students all looked happy and having fun :) Our daughter loved the school environment too!

From a financial standpoint, we found the school fees very reasonable, around $600 per term. This means we could channel more savings to investment to grow our money for the future. Ultimately, my goal is to give my daughter the gift of a peace of mind, and the freedom to pursue her own dreams without worrying about us when she grows up.

That’s my choice and my philosophy, what about you?

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