The first Sunday of May is World Laughter Day. We take a look at how parents can ensure their children are laughing all the way to the bank when they begin their working lives.
Securing their children’s future: every parent’s ultimate goal
In a world in which the economic realities of life are getting harder and harder, one thing that all parents desire for their children is financial security.
While there are many ways to become financially secure, a good education remains one of the most reliable. And a good education these days means an undergraduate degree, at the least.
Which sends a shiver down the spine of many a parent, given the current cost of a university education.
The cost of a university education, and is it worth it?
In August 2025, the annual tuition fee of an undergraduate degree in the UK will rise from £9,250 to £9,535. That’s a minimum for home student; international students will pay a lot more. And it doesn’t include accommodation and living costs.
In the US, fees vary wildly from around $43,000 at the top private universities to £11,000 for an in-state public college. This is further obfuscated by a complicated system of grants and financial aid. While tuition and fees at Harvard cost over $60,000 on paper, the average student pays less than $15,000 after receiving needs-based grants.
Whichever way you look at it, university is a costly undertaking. Yet it is generally accepted to be still worth the cost. In the US those with a bachelor’s degree earn more than their high school graduate peers, and are more likely to benefit from additional perks such as health insurance benefits, better pensions and increased job security.
In the UK, a 2020 report from the Institute of Fiscal Studies states that ‘Over their working lives, men will be £130,000 better off on average by going to university after taxes, student loan repayments and foregone earnings are taken into account. For women, this figure is £100,000.’ There are nuances of course, but generally, the financial benefits of going to university outweigh the cost.
So it might come as music to your ears if I tell you that by starting early, staying consistent and letting compound interest do the work, you could comfortably save enough to fund your child’s university education.
How compound interest can pay for your child’s university education
Small amounts of compound interest over time offer everyone an easy way to build wealth and if you plan ahead, you can use it to pay for your child’s education, enabling them to graduate debt-free and start their working lives with a clean slate.
Let’s look at how it could work.
If you invest £1,000 in stocks when your child is born and add £100 per month until they are 21, that adds up to a total investment of £26,200.
If we assume interest of 7% annually over that 21-year period, your child will receive a pot worth almost £60,000, just about when they are set to graduate. With the average student debt currently standing at £44,940, that should be enough to enable them to graduate debt-free, even allowing for inflation.
Of course, you’ll need to invest wisely to achieve 7% interest – a simple bank deposit is not going to cut it. That’s why you need to speak to one of our professional financial advisers about the best way to set up a regular savings plan to build your child’s university fund. They have a wealth of experience designing bespoke plans for expatriate parents in Asia. The earlier you start, the better, but whatever age your child is, better late than never.
With a degree in hand and no debt holding them back, your child will be laughing all the way to the bank – ready to kick-start their career, build lasting wealth, and enjoy true financial freedom.
A leading provider of expat financial services and wealth management services across Asia.
