For the average working adult, going back to school can be one of the largest investments he will make in his life. But if you have some time before you pursue your studies, instead of applying for a bank loan, why not let time and capital work for you. Even if you plan to pursue a bachelor degree in the near future, say, in three years more, you can still save for it.
First of all, you need to have a target amount. Typically, the course fees represent a large portion of the cost. Other costs are examination fees and living expenses for those who come from other towns.
Some students may choose to study full time so that they can focus on their studies. In this case, if your employer does not give you paid time off to do your studies, your budget will increase significantly, as you now have to account for your entitlement living expenses. In addition to that, you'll still have to continue paying for things like insurance, car, mortgage, credit card as well as utility bills.
However, expenses can be higher if the course is done part time, as the person has less time to devote to his studies. As a result, he may have to prolong the program or even have to re-sit some papers, which means additional examination fees.
How much time you have to put aside the money depends on when you plan on taking up the program. When is the ideal time to start? To get more out of a bachelor degree, it would be good to have real world working experience of two to three years, on which to reflect upon when you're doing the units.
At least three years of working experience would be good but you should not wait too long as the motivation level will drop. Even if you pause your studies in three years, you do not have to pay the money in one lump sum. You can save through the study period as well which, gives you more time to accumulate funds.
Many education centers and colleges have worked out interest free schemes that you can use to your benefit. You can let your money work for you while you use the interest free payment option.
There is also an option for students to pay their fees in the monthly payments over the period of study and if the amount is paid in a lump sum, students are given a rebate. Another option is a scheme in collaboration with a bank, where students pay a few hundred dollars at the start of the program and nothing else for two years. Thereafter, they have the option to repay in installments upon completing their studies.
Finally, you need to work backwards; given the number of years, inflation rate and a projected rate of return to come up with how much you need to put aside regularly. However, inflation may not have a large impact if your study period is short.
Once you have the total figure, you can start saving but you may not have to start from scratch. Perhaps you need not finance the whole amount yourself. Although the competition for scholarships is high, you may run into a bit of luck.
With a short time frame of three to five years, there are few choices in terms of investment vehicles. If you only have three to five years, you should seek a liquid and low risk investment such as putting your funds into a portfolio of fixed deposits, bonds and balanced funds. However, the chosen investment vehicle should also take into account the individual's own risk profile and how much return is required as well.
Last but not least, it is important to review your plan regularly and rebalance your portfolio accordingly.