How Parents Can Start Building a University Education Fund for Their Young Children

Parent enjoying a coffee break while contemplating future financial plans."

Raising a child changes everything—your sleep patterns, your spending habits, and your priorities. Between doctor visits, preschool decisions, and keeping up with daily needs, thinking about something two decades away—like university fees—can feel far down the list. But trust me, as a financial advisor and a parent, the sooner you start, the better.

Let’s break it down together, step by step.

Calculating future university expenses with a calculator and notebook.

How Much Could University Cost in 20 Years?

Right now, local university tuition in Singapore varies depending on the course. For example, a business or computing degree costs about $8,250 to $9,650 annually, while courses like medicine or dentistry are over $30,000. Taking a conservative benchmark—say, $9,025 per year—you’re looking at around $27,000 for a typical 3-year degree today.

But what about in 20 years?

If education costs continue rising at an average of 3% per year (which they have for the past two decades), university tuition could be over $47,000 by the time your toddler dons a graduation cap. And that’s just tuition—not including living expenses or overseas study options.

It’s a wake-up call—but not a cause for panic.

Graph depicting the benefits of dollar-cost averaging in investments.

Why Dollar-Cost Averaging (DCA) Is a Smart Move

You don’t need to fork out a lump sum today. One of the best strategies I recommend to parents is Dollar-Cost Averaging (DCA)—investing a fixed amount regularly, regardless of market conditions. It’s simple, affordable, and takes the pressure off trying to time the market.

1. You Can Start Small

Even $300 a month can go a long way. Let’s say you invest $300 monthly into a diversified investment. With an average annual return of 7%, that could grow into nearly $160,000 in 20 years.

It’s not just about the amount—it’s about consistency. With time and compounding on your side, even modest monthly contributions can snowball into a substantial education fund. Plus, it helps instill a habit of financial discipline—not just for you, but for your kids when they see you planning ahead.

Platforms like investment plans and iFast allow you to automate this monthly habit. Their Regular Savings Plan lets you start from as low as $300 per month into global or Accredited Investor (AI) funds. No guesswork, no stress.

2. You Don’t Have to Time the Market

Here’s the truth—even seasoned investors can’t consistently predict the market. Why would we expect busy parents to?

DCA removes that burden entirely. By investing the same amount each month, you automatically buy more units when prices are low and fewer when they’re high. Over time, this averages out your cost and reduces the emotional rollercoaster of trying to “buy low, sell high.”

For example, equities has dipped more than 10% multiple times in the past decade, but it’s always recovered—and then some. Rather than guessing the bottom, your steady monthly contributions will ride out these ups and downs and keep your plan on track.

3. Volatility Becomes an Opportunity

Market dips? Most investors dread them. But if you’re on a DCA plan, those dips actually work in your favor. When prices drop, your fixed monthly amount buys more units—boosting your returns when the market rebounds.

Say you invested $1,000 a month in the past year. Even with price fluctuations, your portfolio would likely have grown. Sure, investing a lump sum at the lowest point might have done better—but hindsight is 20/20, and no one has a crystal ball. DCA protects you from bad timing and helps you stay the course.

Initiating investment journey with small, regular contributions.

Start Building the Fund Now—Not Later

It’s easy to delay saving when your kid is still learning to walk. But university costs sneak up fast. And starting early gets you ready when you need the fund in 20 years time.

By automating your investment, you don’t have to micromanage or stress. You simply choose your plan, set your monthly amount, and let compounding do the heavy lifting.

Family celebrating the successful growth of their university education fund.

Final Thoughts

As a financial advisor, I’ve seen firsthand how early planning makes a world of difference. Life throws enough curveballs—your child’s education fund doesn’t have to be one of them.

Start small. Stay consistent. Let the market do the work.

And if you’re ready to begin, platforms like investment plans and iFast are making it easier and more cost-effective than ever.