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Chapter 47 Children's education, investment and financial management should start from the baby

Children's education is a lifelong investment

A child's education is a lifelong investment, and all parents want their children to receive a high-quality college education.In fact, higher education is the key to advancing professional careers, making more money than their peers with only a secondary education.Therefore, education is not just books and notes, but a lifelong investment.

How to structure your children's education fund?

Starting to set up a children's education fund is only the first step. In order to get a better and safer return on the fund portfolio, you must first clearly understand and determine the goals and needs of your children's education.As a general rule, the longer you save, the more risk you can take.

From birth to school: Since you have more time and can take higher risks, the portfolio could be 1% growth stocks.

6~13 years old: You may consider some more "prudent" options, such as 70% stocks, especially blue-chip stocks, and 30% bonds.

14~18岁：您既想持续增长，又希望免受市场波动的影响，那可考虑30%债券、20%股票以及50%货币市场基金。

Progression to university: Once your child progresses to university, you may need liquidity.To do this, you may consider placing the majority of your investments in safer markets such as money market funds.

Mr. Huang and his wife are both civil servants. Although their son has just turned two years old, the couple has already begun to worry about the child's future education plan.

They found that their children's education expenses did not reach their peak until more than ten years later at the university stage. Judging from their current income, it is difficult for them to afford the cost of their son's overseas university studies.Therefore, they are considering how to reserve enough education funds for their children.

In China, the children's education funding plan is an important part of the entire family's financial plan.In order to ensure the best education for their children, it is undoubtedly a wise choice to make arrangements in advance like Mr. Huang and his wife did.This will not only reduce the burden in the future, but also ensure that the children can concentrate on their studies at that time, and the parents' other personal plans will not be affected by the need to pay for education expenses.

According to the advice of financial experts, building your children's education fund as early as possible can bring the following benefits:

(1) There is enough time for the investment to grow.

(2) Growth compound expansion over time.

(3) The amount required for the plan is only a small part of the family income, which is easy to handle.

(4) The children's education plan is properly arranged, and the funds required for the deployment of other plans can be more accurate and detailed.

(5) The children can complete their studies without debt.

(6) Education funds are sufficient, and children have more choices.

The key to saving children's education funds is long-term and regular investment. The sooner you can arrange education funds for your children, the better. The sooner you reserve, the sooner you will get a return.

How much money is enough to support and educate children

It is an unacceptable result for intellectual mothers in cities to raise only one child.For children, we must cultivate them carefully. From the moment a child comes into the world, he must be at the forefront.These follow-up expenses for cultivation are simply a bottomless pit.From the time the child was babbling, headaches came one after another: what kind of nanny to hire?Do I need to go to a bilingual kindergarten?Day Care or Day Care?At what age do you start intellectual development and interest cultivation?Learning piano or practicing calligraphy, what kind of elementary school to attend, what kind of cram school to enroll in - in addition, you also need to worry about children's safety issues, health issues, diet issues, growth issues - and each issue needs to be used money to settle.

How much does it cost to raise and educate a child?It may vary according to the expectations of parents for their children. If you want to train your children to finish college, according to statistics, it will cost at least 10 yuan, and as many as millions.

Starting from the birth of the child, it costs at least 5 yuan a month just for baby supplies and medical expenses. If a working woman is a working woman, the nanny fee for the care of someone is also around 2 yuan to 5 yuan a month. After 3 years, Have to prepare about 2 yuan.

Elementary and middle school stage: In addition to nurturing, children need education more. During kindergarten, elementary school, junior high school, and high school; if they are all in ordinary schools, the tuition and miscellaneous fees will be about 4 yuan.But this does not include the money for tutoring classes and art classes.And if the child is studying in a private school, it is necessary to prepare more than 30 yuan.

University stage: The most burdensome thing for parents is the relatively high education cost, and the higher education (such as university, postgraduate) stage where children may have to live away from home. It is estimated that a university graduate will spend 4 years of tuition plus living expenses. 4 yuan, private universities may be more.

Postgraduate stage: As for the cost of further study, the graduate school of a research institute or a university needs about 6 to 10 yuan each.If you study abroad, you will spend more than 2 yuan in two years.

Faced with huge economic pressure, many families can only reluctantly postpone the time of having children until time and age tell them that they can no longer wait.

Parents need to prepare a reserve fund for supporting and educating their children. They need to break down the cost of raising children into manageable small expenses in the family's daily budget, and pay attention to financial details before and after the birth of the child.

Multi-party preparation of children's education fund

Modern parents have higher and higher requirements for raising their children, but the price of making their children become dragons and phoenixes is not cheap.The children's education fund is not a small expense, and it should be prepared as early as possible and prepared in many ways.

[-]. Work hard to increase income

Before the birth of a child, the husband and wife should seize various opportunities for education and training and examination of certificates, in order to strive for the possibility of increasing income such as promotion, job change, and part-time work.

[-]. Use fixed deposits to earn interest and gradually achieve the predetermined goal

This method is the simplest, but it must be considered that when interest rates are low, after deducting inflation, the actual increase in deposits is not much.In the case of slow savings, it is necessary to plan and execute as early as possible.

Buy funds or other investments, mutual funds, and reliable mutual funds have an annual rate of return of about 10% to 15%, which is higher than fixed deposits and very safe.

[-]. Avoid risks and guarantee education expenses
Investing in some more secure businesses with friends can quickly accumulate funds and can meet large educational expenses for temporary needs.

[-]. Insurance

By purchasing children's education insurance, you can receive benefits such as education fees at different stages of education.And in case the insured (father or mother) dies during the insurance period, he can also receive additional income.Extra income is more or less available in every family, such as: various bonuses from the unit, manuscript fees for amateur writing, prize savings or various lottery winnings, inheritance of relatives’ inheritance, gifts from relatives and friends, interest on bank deposits, etc. , The amount ranges from a few yuan, tens of yuan to thousands of yuan. Many families are very serious about the management of fixed income. They have plans for how to spend their monthly salary, but they are very relaxed about the management of extra income.

[-]. Deposit in the bank

With a large amount of income, if you have no clear expenses for the time being, it is best to deposit it in the bank in time. According to the family consumption plan, you can choose to save for a period. Live two meals.Because you have a lot of money in your hands, you usually spend it casually, and it is possible to turn big money into small money.

[-]. Proper shopping
With extra income, you can buy some necessary items. If you have more money, you can buy big items, and if you have less money, you can buy some small items. Choose household items that are both practical and commemorative, so that the small money is worthwhile.

Seven, included in the plan

You should also feel distressed about spending extra income. It should be included in the family consumption plan, and it should be regarded as family flexible income, and the expenditure should also be classified as family special expenditure.

[-]. Special funds for special use

Guarantee that the "special fund" is for exclusive use.The difference between saving and wasting is sometimes not very obvious. "Equipment" is a good way to overcome the blind and unplanned consumption of extra income, such as manuscript fees, which can be used to buy some books, subscribe to newspapers and magazines, and make "intellectual investment"; It can be used as a gift from relatives and friends to repay the "debt of favor" and so on.

[-]. Money makes money

If there is a large amount of extra income, it can also be used to make some small family investments to make money with money.Such as buying treasury bills, securities, and stocks when appropriate, etc., choose "excellent" investments according to personal hobbies and funds, and use extra income to earn extra income.

In the face of huge educational expenses, as long as you grasp the important principles of early preparation, you can choose a suitable saving method according to your needs and preferences.

Investment methods for children at different stages

Most education funding plans are invested in a fixed-time fixed-amount method. The main purpose is to make the return better than inflation, reduce and risk by diversifying investment, and adjust the investment risk of the portfolio according to the needs of each stage.

Children aged 0 to 12 years old can invest in growth stocks and funds, and adjust the investment amount as income increases.In the long run, stocks can provide higher returns, but you should be psychologically prepared to face higher volatility. If the stock price falls, the portfolio will have enough time to wait for the stock price to rise again.

The portfolio for children aged 12 to 16 still aims at growth, but bonds should be added to balance the overall investment risk.

Children aged 16 to 18 will switch to low-risk portfolios. The available tools include short-term government bonds, currency funds, or certificates of deposit. Parents should be able to accurately calculate the annual educational expenses that can be used at this stage.

After comprehending the investment philosophy of adjusting the portfolio according to different stages, what method to adopt for investment has become a question that couples must consider.Practice has proved that it is a good way to adopt the "cost averaging method" to invest in stages.

Generally speaking, investment can be divided into two categories, one is one-time investment, investors need to accurately grasp the market trend and judge the best time to "enter the market"; the other is investment in the form of "regular contributions". This method relies on established investment strategies and mechanisms, and is suitable for general investors to use as education funds and retirement plans.

Because today's society is changing rapidly, it is not easy to accurately analyze market conditions and make correct investment decisions.If the decision is wrong, it is more likely to lose a lot.Therefore, if investors do not have a relatively certain prediction on the market trend, it is a good way to enter the market in stages and reduce risks.

As far as "regular contribution" investment is concerned, investors can achieve savings or other financial management goals through regular, fixed and continuous investment.The advantage of this method is that investors can use the "cost averaging method" to reduce investment risks and costs, and they don't need to worry about finding the best time to "enter the market".

After all, the economic cycle is regular. If the investment is sound and can match the ups and downs of the economy, the risk of investment can be reduced.

"Cost Averaging" is an effective mechanism, which can automatically buy more investment units for investors when the price is "low", and buy smaller investment units when the price is "high".If sustained, the average cost of investors will be lower.

Of course, there are countless savings or investment products in the market with different potential risks and characteristics. The "cost averaging method" is only a long-term and low-risk investment method, and it cannot guarantee "certain victory".

In the final analysis, investors should consult a professional financial planner to formulate a proper financial plan based on their own economic situation and preferences, so as to ensure that the risk level, investment period and investment strategy are all suitable for their own needs.

There are differences in children's education funds at different stages. Careful and careful financial planning should be carried out to prepare children for each stage of growth so as to adapt to the modern society full of uncertainties.

Teach children to learn financial management and consumption from an early age
Traditional family education is not willing to let children touch money, thinking that holding money from an early age will make children's thoughts negatively affected by the smell of copper. This kind of passive prevention leads to children's lack of economic awareness since childhood. .In fact, as one of the family members, it is impossible for children not to deal with money. It is unrealistic to try to create a pure and pure consumption environment for children.Therefore, proper attention should be paid to enhancing children's economic awareness and cultivating children's economic acumen from an early age is very beneficial to children's healthy growth.

Cultivating children's economic acumen is the need of the development of the times.Today, when the whole country takes economic construction as the center, primary and middle school students also urgently need to master some financial and economic knowledge, which can not only meet the needs of the times, but also shorten the distance of understanding with the society, and avoid the past "keep your ears out of the window". "things" phenomenon occurs.Cultivating children's economic acumen is a requirement for the transition from exam-oriented education to quality education.Because the connotation of quality is multifaceted, it includes not only learning, thought, moral character, but also the ability to understand and feel the society. Having a certain economic mind is also convenient for improving the discrimination and analysis ability of primary and middle school students, and promoting the development of logical thinking ability. improve.

Ms. Liu: My child is only in the fifth grade of elementary school, but he is very "determined" when it comes to shopping. You have to make up your own mind when buying clothes and shoes. Going to the supermarket is even more difficult. I can't persuade them.How can we curb the trend of children becoming "shopaholics"?

The problem lies in the child's inability to manage money.If parents teach her the correct method of managing money, the child may change to actively manage pocket money and adjust her money-spending behavior.

[-]. First, let children understand the difference between "want" and "need"
Before buying things for their children, parents should first consider the following factors: Can you afford it?Is this an item you want your child to have?Is your child demanding or justified?Does the product "want" or "need" for the child?When parents consider these issues, they also let their children participate in it before making choices.Parents should give children such opportunities to experience, so that children can gradually understand the difference between "want" and "need".If your child really "needs" something, you can take this opportunity to teach your child product information and general shopping knowledge.For example, shop around, how to counter-offer, how to read the price and the validity period of the goods, etc., and obtain information from practice.

[-]. Let children learn to consume and understand the necessary consumption norms

Let children form the correct concept of spending money and settling accounts, and gradually develop good living habits.For example, children need to buy a lot of things in life. Parents can tell children what to buy, what not to buy, and what to buy, so that children can learn to use money correctly from an early age.

[-]. Let children understand that money is hard to come by
First of all, let children correctly understand the role and status of money, and tell them that money is the fruit of labor.Let children know how to cherish the fruits of their parents' labor from an early age, not to waste extravagance, and develop a good habit of thrift.

[-]. Guide children to save deposits and increase financial knowledge
For example, the New Year's money and gifts sent by elders or relatives and friends during festivals, birthdays, etc. can be deposited and withdrawn in lump sum.Let the children plan and manage by themselves, and experience the taste of financial management.

[-]. Teach children some investment knowledge

This is of great benefit to training children to spend money on "knife edge", such as buying national debt, buying insurance and so on.If you have spare energy, you can attract children to invest in stamp collection, coin collection, etc.

Of course, cultivating children's economic acumen is mainly to guide and explain it from daily consumption and family financial management, so that children can experience economic functions from specific operations.Let children understand consumption norms and knowledge of investment and financial management from an early age, and develop the virtues of thrift, advocating labor, and loving life.

Parents should consciously cultivate their children's financial management concepts, so that children can live in a healthy financial management concept: get something for your work, get more for your work, be good at financial management, and develop the quality and ability to be good at financial management.

(End of this chapter)