How were you able to cater to your children's education?
I had a crazy Friday, believe me. Not only did our toilet get blocked and had to be fixed, but it also gave me something to think about. There are those times we usually plan our funds for the month and forget the emergencies like this one. Who would have thought we will be waking up to an unplanned toilet emergency? At least none of us did.
As a result of this, I began to think about how suddenly money comes and goes. I thought of all the folks who ignore the general advice, "save a percentage, and try to live as minimalist as possible". I am guessing a lot of surprising things happen to them. Maybe I am wrong.
These thoughts proceeded to good debts, and bad debts, I am sorry I won't be driving the nail on the head of this one today. I still need personal proof that it works before I can be confident enough to discuss it with you.
However, there is a certain proof lying around that made me decide let's talk finance today, Iska 😉.
What Proof iska?
My children. My children? Do I have children? Not yet. This is why I said today was crazy. I was having crazy money thoughts and ideas here and there. I am pumped up. I wouldn't be surprised if this turns into a long post. You have to promise to stay till the end, though.
Since, money, expenses, and debts were on my mind, I remember a set of shots I took in our library in Akwa Ibom. It was mostly calculations around Loans, interest rates, mortgage, down payments, compound interest, etc.
However, I was more interested in compound interest. I needed to get my numbers right when it comes to these things. I have been reading on and on about stocks, Certificate of Deposits, mutual funds, index funds, S&P 500 recently, so you can imagine how much information is screaming, "let me out" already.
I am still trying to get a hang of everything. I have told you before that you need proper understanding to make better decisions. I have been using this advice myself. This is the reason I am digging so hard into these financial terms. I want a deeper understanding because it will give me the right mentality to make better financial decisions.
I thought we were talking about my children?
Yes, reading and doing the various calculations around compound interest, I stumbled on a rather interesting question.
The question was about a boy who is presently in Eighth Grade and is planning to attend college thereafter. The good thing about him is that his parents are financially informed. It is worthy of note that his parents already have money invested in mutual funds. But the question said his parents decided they needed a stable, and secure investment portfolio now, to cater for his college degree in 4 years. They decided to go for the Certificate of Deposit. How much do his parents need? $25 000. Armed with this information, I was asked to calculate the amount they have to invest now in a Certificate of Deposit for four years at a 6.5% interest compounded monthly to meet this goal.
Can I plan for my children's education ahead of time?
Did I do the sums? No, I was distracted by the genius of this plan. I started thinking about my children. I couldn't believe I could plan for them even before they arrive. My mathematics just proved it in a simple formula. The discovery was mind-blowing, I took out my diary and began to plan for my children's education.
What did I do?
I figured with all my goals, I won't be starting a family anytime between now and 7 years. I may not know whether once I do, my husband and I would want to start having children in the first few years or not. I didn't care. What I cared about was my children's education when they arrive.
If I have 7 years before I start a family, and I wanted to follow the steps of Nicholas's parents (that's the name of the boy in the question), by considering opening a Certificate of Deposit for my children. Here is what I'll do;
How many children do I intend to have?
I would love to have just two, but, in my country, men tend to want more children. So I twerk this a little bit. What if my future husband wants 4 children? Well, I can handle that... Hehehehe.
How long do they intend to be in school?
Over here, we have 3 stages of education maximum, the extended part is dependent on an individual. So I said let's say I wanted this CD to cater for the first three stages of their education. This means, my children will have to go through;
- Nursery School..... 6 years maximum
- Secondary School..... 6 years
- University ..... 4-7 years depending on their choice of study (I took 6 years maximum for this).
A total of 18 years in school.
How much do I need for this?
Since I do not want to start asking questions about the different fees for nursery, secondary, and university education, I decided to take a fixed cost, amounting to ₦100,000 annually for each level. This might be too much for some of the early levels but the higher levels will cost more, so no worries.
I did the maths
₦100,000 * 18 years(each child) = ₦1,800,000
For four children, this amounts = ₦7,200,000
Wow, Seven Million Two Hundred Thousand Naira. That's the exact amount I need for all 4 children.
How much will I need to put away in a certificate of the deposit account to cater for all my children and at what rates?
Now, this got me thinking. I have seven years to grow this account. How much will I need to put away in a certificate of the deposit account to cater for all my children and at what rates?
It's nightfall, I can't possibly go to the bank and ask how many percent they issue for this, so I went with the percentage given in the textbook,6.5%. I have doubts that the brick-and-mortar banks will give that kind of percentage. I just needed a number to work with. I can twerk it with correct data soon.
I was lucky I didn't have to do this calculation by myself. Once I went online to try to find how much my Access Bank gives for a certificate of deposit, I found a calculator instead. I fixed the necessary numbers. And I had my answer.
At a 6.5% interest rate annually, I need about ₦5,040,000 roughly in that account for my four children. This means ₦1,260,000 for each child. This revelation was amazing.
Wait, what about inflation?
Yes, I was laughing at myself for forgetting things will not be the same as it is today especially in our economy. I went online again and google how many percent our money gets inflated yearly. The results showed 2%-2.5%. I breathe in and decided to work with a 3% inflation rate. (I have a feeling crypto is going to mess with our fiat currency more than it already does, so I am preparing hard for these eventualities with my maths... hehe hehe).
How much did I need once I added 3% inflation?
With a 3% inflation rate, I no longer needed ₦100,000, I needed ₦123,335.48005. I took a rough estimate of ₦125,000 instead. Don't get confused. I mean
₦125,000 * 18 years = ₦2,250,000 for each child. ₦9,000,000 for my four children. Mehn, that's a lot of money. Anything for my beloved kids, right? 😊
Now, with the same interest, 6.5% annually, my calculations revealed I needed ₦5,796,000(Five Million Seven Hundred Ninety-Six Thousand Naira) in a Certificate of Deposit now.
Right now, my head is saying, "Ma'am, you need to put away 6 million Naira for your children's education).
I was overjoyed. Until Disaster struck. 😳. What happened now? My head asked, " Madam, are you going to have all four children at once?" Oh shit!!! How didn't I think of that? 🤣🤣
Whatever, I am not moved by this disaster because it's a minor thing. All I would do is wait until my first child comes, I'll use her part for her, and leave the rest in the account until the rest of his/her siblings arrive. This means, the remaining three are likely to have more, and it's great because it covers the inflation remember? Yes, since, I didn't take note of the childbearing gaps, I didn't calculate the inflation for those number of years I'll be awaiting my next baby. It's a win-win right?
It's all good. Doing this calculation today puts me in a good mood, by now, I know if I have 6 million Naira, it goes straight to my children's education. I don't have to overthink it.
This is the beauty of making plans for your funds. It makes it easier to put them to work the moment they set foot in your account. No second thoughts. I can't wait to do this for other important needs in my life.
What if there is a better option than Certificate of Deposit?
Pause! By the time I am done reading about all of the available investment portfolios, I'll be in a better position to make better decisions.
Like I said before, I need to understand it first. I wouldn't be surprised if by then I'll change my mind over the CD and put the money in a different investment account depending on the risk involved and how much risk I am willing to take to provide quality education for my children.
This also means, if I ask questions about the different costs of education and the interest rates banks give on this, the amount might increase or decrease. At the same time, if I discover an online bank that gives a better percentage of interest as compared to the brick-and-mortar ones, the amount invested will change as well.
Most importantly, if hive offers a better return on this investment, then, hive it will be.
First things first, I have to get all my data right. And I am going to do this by digging deep into the world of economics and finance. My children deserve all the best things life has to offer. I am willing to go all the way for their sake.
I hope I didn't bore you though. How were you able to cater to your children's education? Share your experience with me, I'll be pleased to read through. Thanks a lot for reading.
PS: I am hoping these numbers are correct, my keypad might play a little trick somewhere. Please, point out those corrections when you find them. I'll have them corrected. Thank you.
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Very good post my friend 🥰☺
Thanks alot ma'am
Thank you very much sweetheart
Children are so expensive mehn, this calculation doesn't even include certain standards of living and variables.
I want four kids but I might not get there at all, I also need to start saving for my future kids.
#dreemport brought me here.
Hehehehe, I swear, imagine what happens if they get to choose the school they want to go to .... Wahala 😂😂😂
It is well, my dear, the Lord is with us.
Thanks for reading sweetheart
Very enlightening post.
I am glad you liked it. Thanks for reading honey.
This is an incredible post.. Kind of thought provoking.. You are now making me think towards planning for my children's education. I think it's a nice move... We all want the best for our children and so, we will try everything within out means to make sure they get the best....
This can only be possible if we start out planning now...you really do a great job with this calculations and planning.
But why wait till 7years before getting married?..... And I would still advice to go for the children you know you can cater for considering the situation of our country... I think having 2 kids is just perfect. My thoughts though..
Thank you very much
I am happy to make you begin to think about your children. Yes, seeing that we want the best for our children, we definitely have to do all that we can to ensure they get the best.
Now, is the right time, my darling. Thanks for the appreciation.
Hehehehe, because I have to go to school, and get my acts and career together before starting a family.
I completely understand. I want two children, I'll have to discuss this with my husband,when I find him..lol. And listen to his thoughts on this too. 😁
Thanks for stopping by and for your contribution. I appreciate you.
My dear, my comment might not be what you want to hear but I have a belief that if one aren’t capable of catering for children, it’s best not to give birth to them.
I have seen numerous children suffer because of the poverty of their parents.
I myself I’m not an exception, I have suffered in numerous situations just because of lack of money. A situation that could have been easily avoided by not given birth to me
Well, I’m already in the world and I have to make the best of it.
I wasn’t given birth to on my own accord but I have control to make my life better
No, don't talk like that, I want to hear or read every comment that you have on this. And yes, I agree, families who can't cater for their children should not give birth to them just yet. They should make provisions for the presence of the extra mouth to feed before they embark on this journey.
So have I. It's a terrible and heartbreaking experience.
I am so sorry about everything that happened, darling. It is well.
I wasn’t given birth to on my own accord but I have control to make my life better
I am impressed by the fact that you are so positive about this. Go and shine. Make your life is a happy stead and make us proud of you. Cheers.
Thanks for reading and for sharing your thoughts.
Oh my dear.
I’m very happy that you do appreciate my thoughts.
and yes,I am positive about myself and I’m making efforts to be better.
Thank you so much for appreciating my comment on your article
No, thank you for sharing your thoughts with me on my post. I appreciate you, sweetheart. 🙂
Awnn I feel so special hearing you call me sweetheart 🥺🥺
Hehehehe, I'll call you more, darling 🙂😘❤️❤️
🥺🥺🥺🥺 thank a lot for your kindness
You are most welcome 🤗
This post deserves so much attention and I m glad I gave it mine.
For the love of Maths🥂
When it comes to planning for the future a lot of us are handicap because of the so many uncertainties we face so we often just take life as it comes and bend to any ray of hope we see.
But reading this post you have taken it upon your self to grab life by the brains and turn it as you please.
I came to consider how some families afford to train their kids abroad, and how they might have planned it from way back.
It was much earlier I realized not all my classmates are life mates, neither are we plan mates.
Some have some healthier plans (made by their parents) they are running on and other are just turn anywhere belle face..
We hope to give our kids the best they deserve.
I am happy you did too. Thanks.
Surely, for the Love of maths 🙈
We shouldn't live like this. Bending to the winds of life. No, it's disastrous. We should be proactive instead of being reactive to life's challenges.
Hehehehe, this sentence is very funny, "grab life by the brains and turn it as you please." 🤣🤣🤣. Is that really what I am doing?? 😳😂😂
It took careful planning on their side too, I guess. If not, they might not have able to pull it off.
Some of us have some healthier plans they are running on and other are just turn anywhere belle face..
Hmmm. It's sad that this is reality. Most people will always fall off the path if they do not stand still and plan their lives. May the Almighty help us😔
We will try our possible best, with God on our side, we'll give our children the lives that they deserve.
I can't thank you enough for reading darling @jaydr and for sharing your thoughts with me. Thank you.
Sorry for the typo errors.. I ll let you know why later tho😂😂
I now have time to edit it. And I have done that now.
Thanks for the post again.
Hahahaha, no worries, as long as I understood what you were trying to say, it's okay.
But tell me why now, I am sure the later has reached by now 🤣
Thanks for reading darling
I was on shift actually and waiting for a patients test result before checking it out .. So I had read through and really gave time to do that.
Only to realize how much time I spent.. I quickly typed the comment without reading through.. Lol
I knew there were typos but I just sent it.. Thank God peakd can edit later.. 😂😂
Hahahaha. I understand darling. Even though you hurried, you still passed the most important messages in the comment, I appreciate that.
Peakd is a life saver 🤣😂
Hello @iskafan. A very useful topic of how we'll educate our children. I've known so many friends and acquaintances that have never taken this path. So, when the time comes for school costs, they're left scratching their heads trying to figure out what to do.
It's too late by the time the child needs the funds to start thinking about it. Planning for years is needed for each child. This is exactly what we did for all children. And it has to start before or as soon as possible when the child is born. People often say to me that they've got plenty of time. It goes by so quickly just living and taking care of their daily, monthly, and yearly needs. It's a sad situation to witness when the child desires to further his education, but the funding is not there. Who can look to for financial planning of their own, when they haven't been taught responsibilities like this for when they have children?
Thanks for sharing this most important topic. Take care, and have a good start to your week.
I know you are an avid preached of planning. I think I read one of your posts once where you discussed death. And you mentioned the family had no plans for such events in their lives. And the children were left to scamper around trying to find funds to walk through the burial processes. And then the question arise, "how will they survive after this"? Seeing that their parents never made any financial plans for them before their demise. I hope that I am correct that I read this on your blog.
Yep, this confirms that you were the one who wrote that post. I remember you said a phrase like this too.
I am glad to know that you planned for all of your children too.
I know what my colleagues faced in school as a result of lack of funds. Most times, it makes them pay less attention to their education because they are always trying to do one hard job after another in a bit to raise money for their schooling.
Thank you very much for reading @justclickindiva. Thanks for sharing your thoughts and experiences on this too.
Yes, that was me. Ever preaching planning to at least make life a bit easier in the long run.
I am glad I got it right. Planning is important. As you said, it makes life easier in the long run. Thanks for sharing ma.
I really enjoyed reading this post. You have obviously put a lot of effort and thought into this topic.
I just hope many people will read this post and learn from it! Starting a family has great responsibilities going with it.
Thank you for sharing this valuable information with us!
I got here via @dreemport.
I am happy that you enjoyed reading, sir.
I hope that a lot of people will read too. I agree that starting a family has lots of responsibilities attached to it. Having to do this calculation proved it to me too.
My pleasure, sir.
Thanks alot for visiting.
This is an extremely eye-opening thought provoking post, and I might add still conveys the idea of finances without being absolutely boring lol. A lot of people hate math and do everything they can to avoid it.
But, don't forget about the proposition that life has a way of throwing in massive curveballs that take considerable cunning to conquer, and things are changing at such a rapid pace at the moment as well.
This was an excellent read @iskafan!
This post was obtained through Dreemport .
Hehehehe, I know finance can be a very boring topic for a lot of people. So I tried as much as I can to be more energetic with the explanations. That way it can be fun for anyone to digest.
Thanks a lot sir for reading and for the appreciation.
When you want to be inspired, a toilet emergency can inspire you.... haha. This is the first lesson I got from this post 😂.
Something that made me smile was the number of children...4! Great plan! There was a time when i used to think of 4 but now when I am already a mother of 2, I think 2 are enough.
Hmmm. Now, my question is... is it only you who is going to participate in your kids education? Wouldn't your husband be giving his share.
By the way, it is such a well organized post that made me wow and appreciate your writing and organising prowess 👍
Hahahaha, this is such a crazy joke, I laughed really hard at this, 🤣🤣🤣🤣🤣🤣🤣. I am glad there was a lesson embedded in the toilet emergency... Hehehehe
Actually, if you ask me, I want 2 children too. I added the extra two in case my husband decides we should have more than two. So he will get his extra two, and I get my two... Lol. No body gets hurt... Hahahaha.
Of course not, I was only writing this on a single parent perspective. Since I am currently single. When I get married, we'll definitely split the money. This means, I'll bring 3 million, my husband brings 3 million, depending on our income level. We'll have the 6 million needed to store away in the Certificate of Deposit for the sake of our children's education.
Thank you very much ma'am. I appreciate you for coming around and for reading. Thanks alot. 🙂
Lol. I casted a joke and I didn't know 😂