A client once told me something that has stayed with me.
His daughter had near-perfect grades, the kind most people assume would be more than enough. She applied to NUS Medicine. She did not get in.
It was not for lack of effort or ability. Close to 2,000 students apply to NUS Medicine every year for around 280 places, roughly seven applicants for every seat. Most successful applicants score straight As. So straight As do not guarantee a place. They mean your child qualifies to be considered alongside thousands of others who also have straight As.
The hardest conversation
He described it as one of the hardest conversations he has had with his daughter. Not because she failed, but because she did everything right and the door still did not open. This was not just an application. It was her dream, and for a moment it looked as though it was about to end.
He had the money set aside, and with it the option to send her overseas to study medicine instead. All in, course fees and living expenses for an overseas medical degree can easily come to around $500,000 today. That is not a sum most families can pull together at short notice. He could, because the money was already there.
The story did not end in disappointment. She was back on track within months, because the money to make that choice existed before the choice had to be made.
Why families plan for the wrong thing
I think about this as a father, not only as an adviser. We put so much hope into one pathway for our children that we sometimes forget to ask the harder question: what happens if the door does not open the way we expect, and will we actually be in a position to do something about it?
This is where money set aside for education is often misunderstood. Most parents treat it as a way to fund a known cost: tuition for a specific course, at a specific school, for a specific number of years.
The families who plan well tend to see it differently. They build the fund to create options. A different local course. An overseas university. A foundation year. A longer route into the same profession.
Peace of mind is not a guaranteed outcome
None of us can guarantee the outcome our children want. The peace of mind is in knowing that if the worst happens, you are not stuck choosing between your child’s future and your own finances. You can give them a real alternative without scrambling, or taking on debt to make it work.
The overseas figure above is today’s cost. If your children are young, the number that matters is the one in the year they start, which will be considerably higher. I have written about how to fund that without taking it out of your own retirement in Your Child’s Education Should Not Cost You Your Retirement.
If you are setting money aside for your child’s education, one question is worth answering honestly. If your child does not get the place they are aiming for, are you in a position to give them another way forward?