Are you saving for your child's education yet?

Dubai - Parents felt that their child's education was the best investment they could make.

So often in Dubai, you hear people say "this is such a great place to raise a family". And it's true. From the glorious sunny days and postcard-perfect beaches, to the relative safety of the community, the fantastic schools and the vast range of activities and events for families. As a father myself, I can truly say it's a parent's dream.
However, with education costs ever on the increase, many families are feeling the pinch in their pocket and, following the Knowledge and Human Development Authority (KHDA) announcement that the Education Cost Index (ECI) has gone up this year, that pinch is becoming more of a punch for a lot of parents.
For those of you who haven't come across the ECI before, it's the percentage that schools are advised to put their prices up by. It's worked out by the Dubai Statistics Centre, based on increases in prices of rent, operation costs and more. Last year, the ECI stood at a minimum of 2.92 per cent. This year, however, it has been set at a minimum of 3.21 per cent and a maximum of 6.42 per cent (depending on each school's annual KHDA inspection rating).
Granted, there are a large number of schools catering to different budgets and incomes in the UAE. But from nursery onwards, parents can expect to pay anything from Dh12,000 per year up to Dh100,000 a year, depending on the school and the grade. At these prices, a quick calculation reveals that the cost of educating a child from the age of five to 18 here in Dubai can set you back anything from Dh300,000 to Dh800,000 (more in some schools) - this is not including pre-school years and not taking into account inflation and a rising ECI. And that's just for one child.
A recent survey by HSBC found that 80 per cent of parents felt that their child's education was the best investment they could make, 67 per cent said they wished they had started saving sooner and a whopping 99 per cent of parents admitted they cover school costs directly from their salary. For some families, the cost of schooling each year is more than their annual rent, this therefore means school payments are vulnerable to illness, job change or any other unexpected personal financial crisis. All very scary scenarios.
Increasingly, we are seeing parents taking out savings plans to cover their child's educational future - not just for their college and university years, but for the school years as well. Many banks offer specific education and college savings plans; alternatively, a straight-forward high interest fixed deposit savings account could be a good way of saving a bit each month now, to enjoy less financial stress and pressure once your children reach high school. Either way, if you are already a parent, the best time to start is now. While property prices and other costs may fluctuate, education costs are on a constant upwards trajectory. And, with the ECI assessments and KHDA recommendations, that doesn't seem likely to change.
The writer is chief executive at compareit4me.com. Views expressed by him are his own and do not reflect the newspaper's policy.