DUBAI 21 January 2018: In an effort to turn the UAE into a nation of savers, leading investment company National Bonds is encouraging UAE residents to confront saving challenges head-on. The firm is calling on members of the public to open up about the challenges they face when it comes to savings and seek the answers they need to achieve their financial goals. National Bonds provides trusted advice on how to save – so what better place to start than here?
If you have a burning question for our resident doctor, send it to: SavingsDoctor@nationalbonds.ae.
Q: My husband and I just welcomed our first child, and a family member advised we start a child education plan. Is this something we should be considering, and if so, when is the best time to start?
A: First of all, congratulations! Being a first-time parent is an exciting time, and naturally, you want to do what’s best for your child. The truth is, when it comes to saving for your child’s education, it is never too early to start.
You are not alone in the importance you place on child education. Interestingly, this year’s National Bonds Childhood Education Plan report found that respondents ranked having a child savings plan as the most important type of savings plan. It’s a positive sign that parents are thinking about their child’s future.
It also makes sense that, given the ever-changing landscape of education, parents want to be prepared. This year, private schools can raise their fees by 2.4% to 4.8% depending on their Knowledge and Human Development Authority rating. These factors are variable, so the best way to prepare is to plan ahead for hikes in tuition fees.
It is worth mentioning that aside from tuition fees, which are VAT-exempt, there are many VAT-applicable costs to consider: uniforms, textbooks etc. that can add up to several thousand dirhams. So how do you keep track of and manage the costs?
Quick Tips
• Start saving as early as possible- ideally, from the day your child is born
• Keep track of milestones- how many years are there until your child enters school, university, etc.?
• Forecast costs- if costs increase by a certain amount annually, what will those costs be by the time your child is in school?
• Assess your current spending- are there any unnecessary expenses/areas where you can save?
While these quick steps go a long way, starting a child savings plan ensures you are truly prepared. Opening a savings account and setting an incremental amount aside regularly helps you stay on top. A great tool for this is National Bonds’ myPlan savings program. Additionally, to get an even more personalized program, using National Bonds’ College Savings Calculator tool lets you enter your expenses and future costs in order to visualize your ideal savings plan accordingly.
With these tips, along with a positive and savings-oriented attitude, you can start preparing for your child’s success. To learn more about which plan best suits your needs, you can speak to a certified financial planner. To find out how to get started, contact a Financial Planner at: SavingsDoctor@nationalbonds.ae.
Good luck on your savings journey, and don’t forget to enjoy the milestones!
Note: Meriem Zahouani is a Certified Financial Planner at National Bonds