Saving up for school fees

Published September 19th, 2016 - 10:36 GMT
Creating a structured, long term saving strategy is of the utmost importance to successfully meet your investment needs when it comes to paying school fees. (File photo)
Creating a structured, long term saving strategy is of the utmost importance to successfully meet your investment needs when it comes to paying school fees. (File photo)

The education sector in the UAE has seen rapid growth over the last couple of years. The total numbers of students in the UAE is well above 1.1 million, and is currently growing at the rate of 4.1 per cent annually; making the UAE's education sector one of the fastest growing in the region.

According to industry reports, the country also has the highest number of international schools globally. Vast developments in the industry are expected to be completed in the coming years, due to increasing interest from private players. The government in particular, has supported the sector with several initiatives announced to help promote investments, such as Dubai's Vision 2020 and Abu Dhabi's Economic Vision 2030.

As another academic year begins, and students flock to both universities and schools, there is an increased number of expats in the region who are keen to secure the best education for their children or themselves. There is no doubt that today, education remains an investment that can pay attractive returns down the line in a competitive environment, especially with many entry level positions in the market currently demanding highly qualified professionals.

Preparing for expenses

It is vital therefore, to plan ahead and start saving early for any education costs that you may incur in the near future - as the earlier you start, the easier it will be in the long run. If you are just beginning your saving journey, it is advisable to consult a financial planner to discuss how much you should look to keep aside per month. Ultimately, creating a structured, long term saving strategy is of the utmost importance to successfully meet your investment needs. In the UAE, you typically need to pay schools fees either two or three times during the academic year. Therefore, you should manage your monthly salary accordingly and set aside a sum to cover your average school fee expense.

Alternatively, there are a number of monthly saving and investment plans which you can start saving in - with low monthly premiums and guaranteed returns. These plans can enable you to place small and manageable amounts into mutual funds with the objective of achieving a more sizeable amount for the future. They often include features which can also protect you from market fluctuations and unforeseen circumstances such as death or disability, helping to fund specific objectives such as university fees in the long term.

Personal finance options

However, education in the UAE can be a particularly expensive cost today, and you may need financing while working, to ensure that you or your children can attend an institution of your choice. Although, a lot of employers are offering education allowances, this kind of allowance is usually restricted to a low number of children (usually two) and it is also frequently insufficient to cover the rising costs of tuition as well as stationary, transportation, etc. Most of them don't even cover children who are attending university. So, if your savings are not enough, or you were unable to save before, it is advisable to do your research and choose the right financing option for your investment.

In the end, it's important that you carefully assess your situation before availing any of these options; as it maybe that a discount option might suit your need rather than a personal finance - if you already have enough capital in the bank. Make sure to study any tenor and finance amounts carefully - as well as always reading the fine print before availing a finance.

There are many banks in the region that offer personal finance to consumers - without a need for salary transfer - however, this usually means lower finance amounts and a significantly higher cost of finance. At Noor Bank, our strong personal finance product offers customers cash to choose how or where they would like to educate their children.

Alternative options

Banks also offer a number of other options to help getting an education a little easier. For example, a few banks issue credit cards that offer around 10 per cent cash-back on school fee payments, while there are also cards available which will offer you a three-month or six-month easy payment plan at little or no cost.

You can also receive discounts on educations expenses and transactions accounts with certain debit cards. Supplementary credit cards can also be availed so that students can use them for day to day expenses abroad while billing and monthly payments are done in the UAE.

Remittance services are also another popular choice, especially with parents who periodically send funds to their children studying abroad. Last but not least, make sure to take advantage of any student discounts in the coming months, as it can save you a lot of your hard-earned cash.

By Waleed Barhaji

 


Copyright © 2022 Khaleej Times. All Rights Reserved.

You may also like