Giving your child the best VS overspending?

Last updated on August 24th, 2019 at 05:17 pm

My wife and I were looking at playgroups for Isaac.
Inevitably, we were drawn to the bigger brands in the market.

Mindchamps was one of them that we visited and what struck me was the appeal of giving my son a head-start in his education. Parents who have older kids swear to me the importance of sending my son to a good primary school next time.

Do you see education as enabler for their children’s future professional success?

If you answered yes to the above question, you are not alone.

According to a “Value of education” report by HSBC, many Singaporean parents see education as an enabler for their children’s future professional success. Parents may even prioritise it above all other family expenses and also their own retirement savings.

Extreme case of a parent prioritising children’s education above everything else

Parents in Asia (not just Singapore) are spending more and more of their money on securing their children the best possible education.

According to BBC (You may check it out here), the story goes that there was a bright 18-year old from a rural town in Anhui province in China who was accepted to study at a prestigious traditional medicine college in Hefei.

However, the news was too much for his father who was partly paralysed after he suffered a stroke two years ago and could no longer work.

The father feared that the family, already in debt to pay for medicines, would not be able to afford his son’s tuition fees.

He feared that he would be in the way of his son’s bright future. As his son headed home to celebrate his success, the father committed suicide by swallowing pesticide.

So where is a balance between giving your child the best and not overspending?

This is a very personal question. To start, we have to define what is “the best”.

You have heard of expensive education, enrichment and preschool centres such as Mindchamps, Odyssey, Pat’s Schoolhouse to Learning Lab that can cost you a thousand or two for each child.

Somehow, instead of being put off by their premium prices, you may become attracted to them because we all associate higher prices with higher value.

Of course, it doesn’t help that they tell you that there is a waiting list or there is a minimum qualifying criteria. When something is scarce, your Kiasu antenna will surely be triggered!

These brands have a reputation of having a superior education method that resonates with your intentions to give our kid a head start.

The competition for places at good universities or courses have become so much more intense these days.

Many parents are investing more of their savings to make sure their young child gets a head start and hopefully be better positioned to get the grades they would need in future to get in.

Unfortunately, not everyone can comfortably afford these premium prices. In consequent, according to credit counselling Singapore, some parents  have stated that they got into debt for their kids education.

Do these 2 things today especially if your child is still young

1) Set a proper budget and stick to it

Discuss with your spouse and do a proper monthly budget.

A category should be for “enrichment class” and another category should be for “future university cost”.

According to financial planning guidelines, also create a “retirement savings” category and it should be of equal importance when you allocate your budget. There is no guarantee that your child will be able to support you financially when you are old.

The good part of a budget is that you will realise some categories where you can cut back on quite easily. These may include the holiday budget, the meal & lifestyle budget, the car upgrade etc… . It is much better to compromise on these then to get into debt.

Finally, stick to it and don’t overspend from the planned amounts.


2) Track and get returns on your child’s “future university cost” budget


Saving for your child’s education needs is a long term project. In today’s standards, a survey found that parents spend an average of $21,000 a year on their child’s university education.

This is a large amount and by saving and investing early, you can manage this objective better. We have articles written for this objective:


You may have seen a sensational story recently from Straits Times with a headline that says:

Singapore mum with $60k debt: I want my kids to have a better life than mine

In the story, the mother is raising 6 children and clearly her income is not sufficient for their education needs. She has taken on loans to enable them to study further.

While it had noble intentions, I am personally concerned that her financial recklessness will send the wrong message to her children.

Getting into debt is often an irresponsible way out and perhaps the 2 tips mentioned above may have gone some way to help.

The Astute Parent: A parent who has a sharp acumen on sieving through 'alien' financial jargon to dish out bite size financial tips from a parent's perspective.
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