We all know, from year to year school cost continue to increase. This might make you think of preparing school funds early. But, in addition to preparing school cost as early as possible, you also have to take other steps before starting to prepare school funds. According to Jouska Indonesia Co-Founder and Chief Financial Advisor Indah Hapsari, there are at least five points that must be considered before starting an investment in children's education funds.
1. See Your Financial Condition
If you want to make a financial plan what you should prioritize first is not what the goal is, but how much you have now. For example, you want to send your child to an elite school with a base fee of Rp. 30 million, but you only have a salary of Rp. 5 million, which is certainly detrimental. So the point is, you have to look at your financial condition first, then form your goal.
2. See Your Assets
After knowing your financial condition and goal, you also need to know your liquid assets (easily liquidated) that you have to become your capital, such as precious metal, foreign exchange, stocks, mutual funds, unit links, and others. Assets must be able and easily liquidated, not asset such as house.
3. See Your Debt
You are also advised to look at the debt that you have, such as mortgage payment, motorbike or car payment, debt to other people, credit card debt, and more. After calculating your debt, make sure that later when you are going to invest in education cost there is no debt. Don't forget to also see your cash flow. Usually for office workers, you might also get an annual bonus or other bonus. Use the bonus to cover debts and prepare children's education funds.
4. Prune at the Beginning
Every time you receive a salary, make sure to cut it down early for an emergency fund or education fund, and other additional funds around 10%, more is better. Because, if it is cut at the end, there is a high probability that the your money for invested is not much, because it only relies on the rest of the monthly expenditure.
5. Always Save Emergency Fund
Also try not to forget about emergency fund, because that is very important. Although the family is equipped with health insurance or other insurance, emergency fund is still needed. So, make sure you have an emergency fund. Because if you don't have an emergency fund, you will be deterred if something unexpected happens, and are forced to use fund for children's education.