Variations in the form of schools, particularly schools that are high enough such hierarchically High School, College or University, makes it all the standard could cost the same. Instead of higher education, lower levels of schooling such as elementary, junior high and high school fees alone can vary from each other. That so few of you there who feel able to pay the fee at School A, but can not afford to pay the fee at School B which more expensive.
However, please note that the costs in school A will still be considered cheap in the coming years. This is because tuition fee will rise steadily from year to year. So, even if now there are schools that education costs are found to be cheap, but because those costs are continue to rise each year, then it will be more expensive.
Let me give a simple example: let's say your child is now 3 years old. The question is easy, if now tuition fee of High School is $400, and the average age is 15 when a person entered high school, will you pay the same amount when your child will enter high school about 12 years from now?
Definitely not, because later Tuition is certain to be much more expensive.
HOW TO CALCULATE
Then, how you can calculate and estimate the amount of your child's future education costs if education costs always rise up from year to year? You do not know what percentage of the amount of increase each year?
Yes. We can not predict with certainty how much is future education costs. All we can do is to use certain assumptions, and hope that the supposition is not missed. For example, we can use the assumption that every year cost of education will always go up by 10 percent every year, on average.
Thus, if for example tuition fee for entering high school at this moment is $400, then next year could be $440. Where that number comes from? Easy: $400+ (10% x $400)
Actually, in addition to the above, you can also use the formula: USD400 x 1.1.
Why 1.1? Where it comes from? Oh, that's just simple math. 1.1 it is equal to 10% above 100%. So, 1.1 is the decimal form so that you do multiplication faster in estimating the amount of tuition Fee.
But if you want to use the conditional increase of 20% tuition Fee per year, then you can use the decimal form 1.2. If the assumption of rising cost of schooling is 30% per year, use the decimal form 1.3. And so on.
Well, back to the example of an increase of 10% in one year, so if this year's tuition fee of incoming high school is $400, then the next year the figure is estimated to be: $ 4x 1.1 = $440 .
That's for next year. If for two years in the future? You can perform the above multiplication by repeated up to two times, like this: $ 400x 1.1 x 1.1
What if for the next five years ?
Multiplication is repeated five times, like this: $ 400x 1.1 X 1.1 X 1.1 X 1.1 X 1.1. If for the next 12 years? Repeat up to twelve times. And so on.
Indeed, the estimated cost of education often can not be calculated in a way that simple. But do the estimates are clearly better than none at all. With the approximate numbers as you have learned above, then you may find easier to prepare. Like you're traveling, you knew exactly which direction you're headed.
So, if you want to prepare your child's education fund, the most important thing is to do a calculation of how the estimated amount of your child's future education costs. Thus, it will be easier for you to adjust the strategy to be ready when the time comes.