Child Education: When to start and for how much

I was reading the papers today when I came across a very interesting article ("Should pre-schools be 'nationalised'?" The Straits Times, 10/10/2009, Pg A38). The poignant point which was raised in that piece was the glaring disparity of childcare cost in Singapore. The upmarket pre-school establishments command a fee of more than $1000 per month, while the mass market ones charges around $520 per month. That works out to be at least $36,000 ($1000 per month for 3 years)for the former and $18,720 ($520 per month for 3 years) for the latter. The 'investment' in human capital is heavy indeed.

This article brings to mind one aspect of child education that has been routinely ignored by financial planners when discussing about child education. Usually the focus goes straight to saving up for the university education, which is about 18-20 years down the road. But the expense that is that coming in 3 years' time - when the child is going onto pre-school - is not being addressed.

So when should parents start planning for your child's education? The answer is you should start when you already have an intention to have a child. For those parents whom were 'blessed' by an unexpected pregnancy, you should start as soon as the pregnancy is confirmed. Ask yourself what sort of education do you want for your child and plan accordingly. Would you like to set aside $36,000 for the posh pre-schools or just $18,720 for the mid-range? If you start only when your child is born, you'll have 3 years to save.

Of course, not everything is measured by money - there are some parents whom choose to DIY (Do-It-Yourself). While I was doing my honours thesis in NUS, I researched upon a group of parents who do 'homeschooling' ("Homeschooling in Singapore: Education Redefined", Lim, 2009). These parents educate their children at home, and so they need not fork out additional money for pre-school. However, these DIY education aren't necessarily free - it comes with hidden costs, which is at the expense of one of their income. what happens is that usually one of the parents will have to give up their job to be a stay-at-home educator, and if you consider the loss of income then this might be a costly endeavor.