Paul Chaney Business

Posts Tagged ‘education insurance’

The current cost of education becomes increasingly large. Therefore, education funds should be prepared well in advance rather than when the child will attend school.
A family who already understands the family expenditure and has been preparing financial planning education funding since the child was born.

There are a number of steps in preparing for education funding. First, determine the child’s school. Families should know that education is clearly desirable for the child and adjusted to the ability of children. Family can not force children to attend schools far above the standard value is the ability of the child.

Second, calculate the costs needed for the education of children. Families should gather information on the costs required for the education of children. These costs include school fees, building fees, recreation fees, cost of books, and other costs.

Inflation and interest rates
Third, determine the rate of inflation from now until the child goes to school even when the kids get educated in the schools. The inflation rate can be calculated using inflation rates are now assumptions. When the inflation rate is now too small, the estimated inflation rates to be raised. If this year we have five percent inflation, the family should raise the inflation rate around 6 percent to 7 percent.

The government itself has appropriate expectations of inflation, moderate, and worst. Families also can ask a research institution or agency that issued the inflation, such as the Central Bureau of Statistics or economic experts; in order to get inflation numbers are valid and reliable for estimating the future.

Fourth, calculate the interest rate prevailing in the future. Interest rates are predicted in the future can not be separated from the estimated inflation rate. Interest rates are a reflection of the prevailing inflation rate. Therefore, families must obtain a desired level of real interest the government every year. When the desired real interest rate the government about 1 percent to 2 percent today, the prevailing interest rate is the result of the real interest rate with inflation. When inflation 7 percent, and the interest rate of 8 percent to 9 percent.

Fifth, determine the magnitude of savings that are made. When the funds needed have been determined and the amount of time to get to school children, families can determine the amount of savings each month. For example, families need a fund of Rp 75 million, of which these funds are needed in five years or 60 months, the fund should be set aside from the monthly household income amounted to USD 1.25 million. That is, funds amounting to USD 1.25 million of savings are kept under the pillow have not bred through investment. When families make an investment, the funds set aside will be smaller and very good if more time to invest.

In the conduct of investment options, families can invest their own or place them on the investment manager and also combined it with insurance. When used alone investment, the investor requires knowledge of investment and takes time. When deposited, the family must get the information more widely, both interest rates and banking conditions in question. All actions must contain risk and the family must be understood.

Education Insurance
When families choose education insurance, it should be realized that in addition to paying an insurance premium, the family also invested. Useful insurance premiums to pay tuition fees when the family could no longer pay the mortgage investment. This could be due to the inability of the insurer the premium can not work or death.

When the family took the insurance, household expenditures for education fund savings will be greater. On the other hand, the family does not need headache thinking about investments that will be done in order to achieve the desired educational funds. Risk in the future has been transferred to the family insurance through premium payments. However, this insurance is not required if the family knew exactly health and for the foreseeable future. Families should know exactly the skills that families can provide the education fund.

As described previously, in preparing for this education fund, the family would face the risk, both risk tightening of household expenditures, investment risks, and risks of the funds needed for swollen with the situation. Families must prepare themselves to address these risks by looking at education funding very carefully.