Most conversations about education funding assume a happy ending. Your child does well, gets the place they wanted, and the money is there.
That is the easy version to plan for. It is not the one worth planning for.
The version worth planning for is the one where your child does everything right and still does not get the local place. Not because they are not capable, but because the number of subsidised seats is small and the queue is long.
That is what a properly funded education plan buys. Not a guaranteed outcome. Options, in the year your child needs them, regardless of how the results land.
Start with two real numbers
At the National University of Singapore, the MBBS programme currently costs a Singapore Citizen with the MOE Tuition Grant about $32,200 a year. Over five years, that is roughly $161,000.
Now the alternative. For an international student, medicine in the United Kingdom or the United States is a different order of expense. Tuition alone across a five or six year degree runs into the high hundreds of thousands. Once accommodation, flights, insurance and everyday living costs are added, the all-in figure for a child starting fifteen to twenty years from now could reach around a million dollars.
I use medicine because it is the most expensive common case and the one parents ask me about most. The principle is the same for law, dentistry or engineering, only the numbers are smaller.
So the gap between the subsidised local path and an overseas one is not 10% or 20%. In today’s money it is more than four times.
That is the real reason to plan. Not because university is expensive, but because the difference between the two outcomes is large, and you do not get to choose which one you face.
Then project it forward
Here is where most people make their first mistake. They look at today’s fees and plan against today’s fees.
Education costs in Singapore have risen by an average of about 2.68% a year over the last twenty years, ahead of both headline and core inflation over the same period. Schooling has been getting more expensive faster than the general cost of living, fairly consistently.
Apply that to a child who is three today and starts university at eighteen, and the picture changes:
- The local path, about $161,000 today, becomes about $239,000
- The overseas path, all in, could reach around $1,000,000
Those are illustrative projections built on a long-run average, not forecasts, and the actual figures will differ. But the direction is not in doubt, and planning in today’s dollars will leave you short.
The three levers, and which one actually moves
Once you have a number, you have exactly three levers: how much you put in, how long it has to work, and what return you earn on it.
People spend almost all of their attention on the third one. It is the most interesting to talk about and the least within your control.
Here is what each lever is worth, against that million dollar overseas figure, fifteen years out:
| Annual return | Monthly contribution needed |
|---|---|
| 3% | about $4,410 |
| 5% | about $3,740 |
| 7% | about $3,155 |
So moving from 3% to 7%, more than doubling your return assumption, saves you roughly $1,250 a month. Real money. Worth having.
Now hold the return at 5% and change only when you start. A parent beginning fifteen years out needs about $3,740 a month. A parent beginning ten years out, facing a smaller bill because there is less inflation to absorb, needs about $5,640 a month.
Starting five years later costs you about $1,900 a month more. That is roughly one and a half times what the entire gap between a 3% and a 7% return is worth.
This is the part I want you to take away. Time is a bigger lever than return, and it is the only one of the three that is completely within your control today. Every year you spend deciding is a year you cannot get back, and it costs more than any product selection ever will.
None of this means a lower return is a failure. It is not a verdict on any particular approach. It simply means the levers trade against each other: if the return is lower, the contribution has to be higher or the runway longer. What you cannot do is leave all three unexamined and hope the number appears.
The trade-off nobody names
This next part is a common concern, and it is where I think the real risk sits.
A parent looks at $3,740 a month, decides it has to happen, and finds the money. Not from spare cash, because there rarely is any at that level. They find it by reducing what was going towards their own retirement.
It is rarely a decision. It is usually a drift. The education number is urgent and has a date on it. Retirement is distant and does not. So retirement gives way, a few hundred dollars a month at a time, for fifteen years.
I understand the instinct completely. As a father of two I feel it myself, and I want to give my children the best possible future. But consider where it leads.
Your child finishes an expensive degree, starts earning, and is doing well. You are in your late fifties, with fifteen years of underfunded retirement behind you and no way to make it up, because the one asset you needed for that job was time and you spent it.
And then the thing you were trying to avoid arrives anyway, in a different form. Not your child paying for their degree, but your child eventually supporting you.
There is a version of generosity that costs your children more than it gives them.
This is what I mean when I talk about freedom today and a future that is secure. It is not a slogan about having both. It is about refusing to fund one by silently defunding the other, and being honest early enough that you do not have to.
Sometimes the honest answer is that the overseas path is not fundable without damaging your own position, and the plan is the local one plus a genuine reserve. That is a real answer.
It is worth seeing what that costs. On the same fifteen year runway and the same 5% assumption, funding the local path needs roughly $900 a month rather than $3,740. That is the difference between a goal that sits comfortably alongside your retirement and one that competes with it. It is far better arrived at when your child is three than when they are seventeen and holding an offer letter.
Match the money to the date
One more thing, because it is the easiest way for a sound plan to come undone.
An education fund has a fixed deadline. Your child turns eighteen whether or not the market is cooperating. That makes it different from retirement, where you have some flexibility about when you draw.
So the money should change character as the date approaches. Fifteen to twenty years out, there is runway to accept volatility, because there is time to recover from it. Around ten years out, the balance shifts. Within about five years of the first tuition bill, the priority stops being growth and becomes making sure the money is intact when it is needed.
I have seen this happen. A fund that was invested sensibly for years, never de-risked as the date came closer, and then met a bad market close to the time it was needed. The plan was sound. The timing was not managed, and the family ended up having to choose between the degree and something else they cared about.
Getting the return right matters. Not losing a third of the fund in the year you need it matters more.
Where this leaves you
If your children are young, you have the most valuable thing in this entire article, and it is not money. It is runway. Use it before it becomes the expensive kind of decision.
Three questions worth answering this year rather than next:
- What is the actual number, for the path you would want to be available, projected forward to the year they would start?
- If you funded it at the contribution that number requires, what would that do to your own retirement?
- If the honest answer is that both cannot be fully funded, what is the plan that protects your position and still leaves your child with real options?
None of those require a product. They require sitting down with the real numbers once, which most people never do, and which is uncomfortable the first time.
That discomfort is the point. It is much cheaper at three than at seventeen.