Save up systematically to fund your child’s higher education

Education costs are rising, and parents are faced with a challenge

By Dhaval Jasani/Money Matters

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Published: Tue 4 Apr 2023, 2:33 PM

Last updated: Tue 4 Apr 2023, 3:47 PM

Question 1. I intend to start saving for my child who is seven years old. Are there long-term plans for kids or should I open a fixed deposit here? Or would it be better to save in my home country?

Answer: You have aptly chosen to start saving from now for your child’s future. Education costs are rising, and parents are faced with a challenge when the child is to be inducted in a university, that requires substantial downpayment and follow on payments.


Parents generally sign up for investment plans and contribute on a monthly or quarterly or yearly basis to accumulate funds to safeguard from this one-time cash outflow. You may choose an investment plan with a combination of debt instruments, equities or gold, with the aim to generate returns exceeding inflation while managing downside risk. Please ensure that you choose a plan with minimum risk, considering the cause for which this investment is being made. This is a long-term investment and tenure of the plan may be chosen based on requirement of funds near to a particular age.

Investment in markets is subject to market risk and you should review performance of the fund at periodic intervals and opt to rebalance your portfolio at periodic intervals, as required.


You may also opt to avoid drawing any income out of these funds and instead opt for investment plans that continue to accumulate and grow over time.

Ideally, be it your home country or UAE, currency also plays a vital factor when choosing an investment plan. The US dollar continues to be lead currency that is acceptable globally and you may wish to opt for an investment plan that is dollar-denominated to insulate your investment corpus from currency risk.

While interest rates seem lucrative at the current juncture, they may not remain this high for a longer period and central banks may face headwinds to reduce interest rates. Hence, a fixed deposit may not be a lucrative option from a long-term perspective.

Dhaval Jasani is a chartered accountant and the founder and CEO of ZTI. - Supplied photo
Dhaval Jasani is a chartered accountant and the founder and CEO of ZTI. - Supplied photo

On a separate note, you may also opt for a life insurance cover to insulate your family from any unforeseen event.

My wife and I earn Dh 20,000 each but she has refused to contribute to the house budget. The only consolation is an annual vacation which she plans and spends on. She claims she is saving her salary for a rainy day. Is this the right approach? I have no idea what her expenses are.

Answer: Every individual aims to achieve financial fitness and savings for a rainy day is ideal for the family to counter any unforeseen requirements. While annual vacation works as a booster to rejuvenate yourselves from the stress caused due to hectic working schedule throughout the year, it is also important to manage funding requirements to meet living costs for the whole year, be it rental expenses, utilities, monthly groceries, vehicle running and maintenance expenses and so on.

You have also mentioned that you are unaware of her expenses and the quantum of funds being set aside as savings.

While this may be your personal matter, we propose that you discuss this matter with your wife and understand the numbers from her in terms of earning, spending and saving, such that you both may jointly opt to manage your expenses, cash flow and plan for savings accordingly. Be it rainy day or otherwise, the two of you as a pair will have to face the tide in future and protect each other from any eventuality.

Dhaval Jasani is a chartered accountant and the founder and CEO of ZTI. Views expressed are his own and do not reflect the newspaper’s policy.



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