Maths is not my strong subject and I am attempting to do sums..
Bear with me.
There are three reasons why I don’t wish to support my children through Uni.
1. It will be a financial suicide for me, which will eventually force me to depend on my children for financial support in my old age. With the advances in Medicine, I could live a very long time, which means my children will have to financially support me a quarter ( at least) of their life time, at a time when they should be settling down and having their own families. If they support me financially, I will be depriving them from saving up for their own old age.
2. I believe my responsibilities as a parent ends when my children attain the age of majority, which is 18 here. By then, my child is considered as an adult, can vote, buy a house taking a mortgage, buy alcohol etc. I gave my children the best childhood they could ever get, but their adulthood is their own.
3. I want financial freedom in my old age. I want to be able to afford quality care if and when I need it. I want to be able to do the things I want to do without feeling obligated to anyone.
Why I said supporting my children is a financial suicide.
Assume I earn 200K/annum
30% will be deducted straight away for tax.
10% will be deducted for Super.
Professional license fees, CPD course fees, Medicare levy etc will take another 10%
Mortgage will be 20%
I am left with 60K/annum. When Yaya leaves for Uni, I still have my other two children at home. Even if I paid only 20 K for her/year, that will only leave me with 40K a year for the 3 of us.
On the flip side, if I paid 20K for yaya for 4 years, and the same for her siblings that is a whopping 240K I would have spend. That is the money that I should be putting in to my mortgage or put away for my old age.
So no, I don’t think I will want to pay for my children’s Uni..
That being said, I did take education insurance plans for each of my kids. So they will get that.
If I can do three jobs a day and put myself through Uni, then I am sure my children can do it too.
Its great that you’re planning ahead financially for your future.Not many people do that and end up unhappy .Not only unhappy but find scapegoats for their financial mess.Yeah ,like it or not ,financial independence is very important and the earlier one faces up to accepting that reality ,the better for everyone in the family.I personally feel one should be able to communicate and explain to family members and be clear from the beginning itself regarding finances.This way, everyone understands more or less what to expect and there is no question of false hope or imagined promises.Also,knowing more about finances only serves to empower and make one more confident and self sufficient in whatever they do in life.
Nimmy
Nimmy: Indians tend to use their children as ATM machines. I invested so much for your studies, now you pay it back..
You do have a point. Education (just to get a basic 4 year undergrad in a decent private college) is oh! so expensive. It can be about 250-300k, and that is just to get this basic education. It costs about the same to go to Medical school!
State colleges are much much more affordable. But I also found that if you have multiple kids in college, they give you breaks (scholarships). I have only one, so I will have to pay the full freight!
I am starting to think that I should let my kid take out loans or work or get scholarships and support atleast part of her studies. If it is a loan, then all I need to do is write a check if I feel like it.
Your thinking is right. Here the thought is that your kids will get loans to go to school and they have time to pay it, but there are no loans for retirement, so that should be the priority!
MS: I have told my children from the beginning, education is the only key to the brightest future, work hard and get scholarship. I am not going to be in debt to pay for your future.
Hi Sara!
Nice post!
Could you please point me to insurance plans for education ? Are these available in Aus?
Many thanks!
Ann
Ann: Education savings plan ( ESP) gives you the most returns when you join the funds when the kids are very small. I started it on their first birthday. All three of my kids have ESP in Malaysia and in Canada. I didn’t try to find any here because kids were older when we came here. I don’t know much about them in Australia
Talk to your financial planner.
You are right Sarah. You will be safe at old age.Enough money to take care, to move around and to do what you like. One thing you seem to forget. The love and care from your children.
Bipin: I love my children more than anything, but I think it will be terribly unfair of me to even expect that they will take care of me in my old age. I am not their liability. I am my own liability.
evide poyi? Exam aano??
MS: Exam is on this Saturday and true to my form, I haven’t even started studying.