Written by 'Nimi Akinkugbe - Nigeria
Email: info@moneymatterswithnimi
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Nimi Akinkugbe has extensive experience in private wealth management. She seeks to empower people regarding their finances and offers frank, practical insights to create a greater awareness and understanding of personal finance.
For thousands of Africans studying abroad as well as the thousands aspiring to join them, the devaluation of the currencies is a major setback and will inevitably force parents to reconsider their children's overseas education plans. Here are a few ideas to consider as you navigate the challenges of the increased education costs.
The key to successfully educating children is preparation and planning from their earliest years. Many parents do not plan for this huge expense until the bills are almost due. Putting in place an educational savings plan with direct debits from your current account to an appropriate investment vehicle will help keep plans on track.
By some estimates, annual increases in education costs can be as high as 10% to 15%. An education-planning calculator helps you to visualise various scenarios assuming savings over a period of time. It will help you to determine how much to put into the education fund on a regular basis in order to meet a particular goal. You can create different scenarios by entering different data as appropriate. Remember to factor in exchange rate changes if your children are to be educated abroad.
Are all your savings and investments in local currency? Exposure to a diversified currency portfolio typically reduces exchange rate risk. It is important, particularly if you have obligations in foreign exchange to hold some foreign currency in your domiciliary account, or in a diversified portfolio consisting of bank deposits, bonds, mutual funds and real estate.
Remittances for school fees, student maintenance allowances, Business Travel Allowance (BTA), and Personal Travel Allowance (PTA), are among the eligible requests for foreign exchange that shall be fully met by The Central Bank at the official/interbank exchange rate.
Scholarships and grants are often overlooked by parents. From your children's earliest years you may have identified a unique skill or talent, sporting, artistic or academic, making them eligible to compete for scholarships. Scholarships may be tied to a particular field of study or may require that a certain standard of performance be maintained throughout the student's enrollment. They may not cover the entire school fees bill but will certainly offset some of the expenses.