My Child’s Education – How to Finance it All

9 September 2018

Latoya, a financial controller, and Devon a lawyer chose to send their two children to an excellent primary school rather than a preparatory school. “Why?” I asked. They shared, “We attended primary school and have excelled in our careers, and most importantly, the savings from not paying preparatory school fees has already allowed us to invest almost J$1.4 million, in just two years, towards our children’s university education.”

How Much Does University Currently Cost Per Year?
Depending on the course of study, the annual cost ranges from J$700,000 to J$4 million for local universities, and US$62,000 to US$92,000 for non-residents attending university in the USA. For most persons financing their children’s education may therefore be a challenge. So, here are some tips to help you finance your children’s education with greater ease.

The Prep School Route to University
The average annual cost per child to attend prep school is J$500,000, which includes fees, supplies, and extra lessons etc. Therefore if your child attends prep school from kindergarten through to grade 6 you will spend J$4.5 million ($500,000*9 =$4,500,000). This can reduce your ability to save aggressively towards university. However if sending your child to prep school is your preference, here are some pointers to ensure you amass enough for university:

Request a JMMB Goal Planning Session: This helps you to appreciate the total cost of university and how much you need to be investing each month in order achieve your target amount.
Open a US$ or J$ JMMB Graduate investment account. Then, make planning for university a ‘family affair,’ by encouraging loved ones to contribute to your child’s education in lieu of toys for special occasions.
Reduce your expenditure on other bills.
Reduce the number of years your child spends in prep school: This can be done by starting your child at a basic or primary school and then switching to a prep school later on.
Invest more aggressively when your child is in high school. High school cost approximately J$250,000 less per annum; which is J$250,000 ($500,000 – $250,000) less than prep school costs. This is J$1.75 million over the seven (7) years of high school.

The Primary School Route to University
The average cost of a child attending primary school is J$150,000 per annum. This is J$350,000 less ($500,000 - $150,000) than sending your child to a prep school for the year. If you saved this amount over nine (9) years, you would accumulate a whopping J$3.15 million.

JMMB Graduate Helps You to Get Achieve Your Goal Faster

	Primary School Route		Prep School Route
	Savings Account (1% interest p.a.)	JMMB Graduate* (8.4% interest p.a.)	Savings Account (1% interest p.a.)	JMMB Graduate* (8.4% interest p.a.)
Kindergarten to Primary (9 years)	J$3.37 mill	J$4.47 mill	J$0	J$0
High School (7 years)	J$1.9 mill	J$2.4 mill	J$1.9 mill	J$2.4 mill
Total	J$5.27 mill	J$6.87 mill	J$1.9 mill	J$2.4 mill

Disclaimer: Past performance of the JMMB Graduate is not a guarantee of future performance. This projection is based on a performance for a conservative investor over the long-term and assumes that an initial investment of J$100,000 is invested initially and monthly investments are made. Interest rate is compounded.

Investing in the JMMB Graduate can help you to finance your child’s education with greater ease. If you took the primary school route, you would have J$1.6 million more towards your goal; while if you took the prep school route, investing in the JMMB Graduate gives you, J$500,000 more. *

Do you want to finance your child’s education with greater ease in J$ or US$? Schedule an appointment with one of our advisors.

Written by: Michelle Sinclair-Doyley, manager, client financial education, JMMB Group