Life in Dubai and the rest of the UAE can be pricey, and no one feels this more than hard working parents who are not only providing for the family’s daily expenses but also saving for their child’s education. With the continuing cost of education being one of the largest expenses parents will ever have to fork over, meticulous financial planning is in order.
In the UAE, private school fees have been soaring, ranging from AED 34,800 to 120,000 yearly. Based on salary ranges (low end at AED 47,000 yearly to AED 220,000 annually at mid-range), almost half of parent’s salaries are going to tuition fees alone.
Meanwhile, the total cost of an undergraduate degree is calculated to be approximately AED 891,810 (USD 242,837).
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Source: Zurich
As a parent, you probably spend a lot of time thinking—and worrying—about how to save for your child’s education. You’re not alone. A survey commissioned by Zurich Insurance Group found that in the UAE, 86% of parents are worried about how they will be able to afford their children’s future education expenses amidst increasing education inflation, and 70% have not invested in a savings or child education plan.
In fact, almost 80% of parents use nearly half of their household income for their children’s education.
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Source: Zurich
Without commitment to a continued plan of saving for your child’s education, time and inaction can get the better of you and your family and can lead to financial instability and distress.
You might be planning ahead with your spouse or involving your children in saving for their own education.
Maly offers 10 essential tips and tested methods from experts and other parents that will help you effectively save for your child’s education, setting them up with financial know-how, money management skills, and a sense of accountability to build their future.
[Invest in your child’s future education with smart savings app Maly, which automates savings from daily purchases, sets up easy saving plans, links to your UAE bank, and helps you achieve financial wellness. Download Maly for FREE on Apple and Google Play.]
When it comes to saving for your child’s education and wealth accumulation, time can be a powerful—and often underlooked—ally. Begin setting aside funds for your child's education as early as you can (and yes, this means even way before they are born!), and see if you can increase your deposits yearly. This will ensure your child’s education plan grows safely and well.
You can start saving at any time, but with time on your side, you could put away so much more toward your child’s education.
Allocating unexpected lump sums or additional payouts of income to your child’s education savings account can provide significant boosts throughout the years and help ease your stress. There’s no worthier cause!
When it comes to how to save for your child's education, it’s important to start at the basics—to be disciplined and form the habit of saving. This is one of the simplest tips on this list, yet it’s something many adults (parents and non-parents alike) wrestle with.
Develop a disciplined saving habit by allocating a fixed amount of your monthly income towards your child's education fund. Remember that even small contributions made consistently over time can grow significantly into a substantial sum over the long term, thanks to the power of compounding.
If you’re struggling to form the habit of saving, you might want to give these savings plan challenges (like the popular 52-week money saving challenge) a go—they’ll help you stick to a savings schedule that works well for you and help you get used to consistently setting money aside.
Many people find it difficult to save money because they see it as parting with their hard-earned cash. If it goes somewhere they can’t see, they can’t access it to spend it.
For those hoping to grow a nest egg for the future or who are saving for their child’s education, putting money aside monthly for savings can be made so much easier—simply automate your savings.
Simplify the saving process by automating your regular contributions to your child's education fund. Here at Maly, we offer a financial wellness platform that will help you manage and grow your money with ease. Your personalized savings app syncs with your local UAE bank account and can set up automatic transfers from your salary account to your designated savings or investment account.
With automated savings, parents can ensure consistency in saving for their child’s education without requiring any manual input each month. Life is busy, so when you can, it doesn’t hurt to automate certain processes.
Don’t just automate your savings; micro-save every time you use your card. Maly micro-saves for you by rounding up all your purchases and putting the savings in a separate folder or account where it can grow.
For an easy-to-use financial platform that will help you save, invest, and manage the family finances successfully, download Maly today on the App Store or on Google Play.
One of the best ways to save for your child’s education and grow your money, investing is about learning how to make wise choices that impact your family’s future.
Developing a personal interest in learning how to invest is beneficial to your family’s financial future. Though investing may seem like an intimidating financial topic that many feel daunted about learning, it simply means making your money work for you over a period of time by putting it in something that you expect will bring profit.
These days, there are apps that simplify do-it-yourself investing; you can also contact financial planners to learn more about different investment plans in the UAE.
Learning about investing doesn’t have to be difficult; books on financial literacy and investing in the stock market, websites like Investopedia, informative investing channels on YouTube, and savings and investing apps like Maly can help simplify the investment process for you and make it more approachable.
Experts suggest investing in child education plans, which are specialized savings schemes designed to help save for your child's future education expenses. These plans not only focus on building funds for education but also provide security for your child in case of unfortunate events.
Child education plans often include life insurance coverage and options to grow your savings over time. Depending on the plan, you might need to make one-time or regular payments—monthly, quarterly, semi-annually, or annually—to keep the plan active and earn interest.
The saved funds can be used to cover the college fees for the child’s higher education (university or college education). Some plans even offer the possibility to convert them into a term insurance plan once your child finishes their studies. However, it's essential to review each plan’s features offered by the insurance company before you make your choice.
“Choose a plan with a 10- to 15-year maturity,” says Dubai wealth manager Abhishek Datta. While longer timelines seem challenging to commit to initially, it helps if you start early. Starting early reduces the investment amount you will need and spreads it over a more extended period. This strategy helps mitigate risks associated with market fluctuations as well.”
Beyond traditional savings, parents should consider investment options that offer the potential for higher returns and explore education savings plans or insurance-linked savings products that not only grow their money but also provide protection benefits for their child's future education needs.
There are many types of investments to choose from, with the most common being stocks, bonds, real estate, and ETFs/mutual funds. Other types of investments are real estate, CDs, annuities, cryptocurrencies, commodities, collectibles, and precious metals. However, it’s important to learn about the stability or volatility of such products before diving in with your money.
How much and what you invest in all depends on your risk appetite and how you want your money to grow.
Knowing about different ways to invest, the risks involved, and the potential gains will help you pick the right options that match what you want to achieve financially.
“With the increasing cost of education and uncertainties of life, parents should seriously consider investing in a structured savings plan to support their child’s education,” advises Rayner Britto, Head of Distribution at Zurich International Life.
And something very important—“Always back your education savings plan with life insurance cover, which fully protects you and secures your child’s future,” he adds. That way, no matter what happens to you, your child has access to all the money you are saving for them.
Saving and investing does not have to be a scary and daunting topic; financial wellness and money management can become a family affair.
Discuss your child’s educational goals with them openly and involve other family members in contributing to the fund. Some families live in multi-family set-ups (e.g., with grandparents or aunts and uncles) and share financial responsibilities that way, too, so make sure those who need to be are properly involved. This not only eases the financial burden on parents but also instills a sense of collective responsibility towards the child's education.
Besides grandparents and other family members, your children themselves can be a part of saving and investing in their own futures. Teach them about responsible finance from a young age, and if they’re of age and can work, encourage them to contribute to their own educational fund by setting aside savings from their salaries (working students should check out these money-saving tips for students as well as expert ways to save money while living well in Dubai).
You can get the whole family’s finances under control with Maly’s multiple visa cards option. Family members—from children to elderly members and family housekeepers—can hold personalized Visa cards dedicated to different purposes.
Better than giving your family members separate credit cards to manage, these Visa cards are all under one account, which you can control right from your Maly app.
Encouraging family and friends to contribute towards your child's education fund instead of or alongside giving traditional gifts can significantly boost any savings for your child’s education.
They say, “It takes a village to raise a child,” and it’s so true. Parents who need assistance could consider inviting loved ones to be part of saving for their child’s education, one of the most vital parts of the child’s life. Grandparents, aunts and uncles, birth godparents, and even friends might want to contribute an amount of money to the child’s future education, especially during important milestones in the child’s life.
This not only contributes to your long-term goal of saving for your child’s education but also fosters a sense of collective support from extended family and friends.
Set up a dedicated platform or fund specifically designed to receive educational contributions, so that family and friends can easily give toward your child's education. It’s efficient, and it allows people to see that the money they contributed is growing for a specific purpose.
Leveraging family and friend contributions in addition to your regular savings can accelerate the growth of your child’s education fund.
If you’re feeling overwhelmed by your family’s financial situation, you don’t have to struggle alone. You can learn about the best savings plan, investment plan, and insurance policy for your family by consulting a qualified financial advisor or provider who specializes in education planning in the UAE.
With a wealth planner, you can create a tailored strategy for saving for your child’s education that’s aligned with your financial goals, risk tolerance, and time horizon.
Speaking of the Zurich survey, Britto notes that 43 percent of the parents who participated said that “a better understanding of education savings plans and their benefits would motivate them to invest in the same.”
“Starting the conversation with a financial advisor is an important first step. When it comes to savings, the good news is that it’s never too small and never too late,” adds Britto.
Many financial advisors and planners offer a free first consultation, where people can give them an idea of their financial situation and get a little starting advice in turn.
You don’t have to commit to a specific financial advisor right away. It’s okay to shop around before you make your decision. Finding the right advice and the right fit for your family is crucial.
[Begin saving for your child’s education with Maly, the savings app that will help you and your family become financially healthy. Download Maly for FREE on Apple and Google Play and start a better relationship with your money today.]
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