New Academic Year: Why Parents Need to Prepare an Education 'Sinking Fund'
Jakarta (ANTARA) - Financial planner and founder of the financial education platform DNA Finance Indonesia, Aliyah Natasya, has reminded parents to separate annual educational funds from routine monthly expenses to avoid financial pressure when entering the new academic year.
According to her, many families experience financial difficulties in June and July because they attempt to pay annual educational requirements using their ongoing monthly income. “The biggest mistake I see is parents trying to pay annual fees from their current month’s salary. As a result, finances always feel ruined in June and July,” Aliyah stated when contacted by ANTARA on Thursday.
The financial planner, who holds an MSc in Economic Competitiveness and International Business from the University of Birmingham, explained that family financial management should be differentiated based on the time horizon of the expenditure. Routine expenses such as groceries, electricity, transport, and monthly school fees can be met from monthly income, whereas periodic educational costs need to be prepared well in advance.
These annual educational costs include enrolment fees, the purchase of uniforms, textbooks, and specific school activities, the schedules and requirements of which can generally be estimated early on. To anticipate these needs, Aliyah suggests that parents implement a “sinking fund” method—a dedicated fund collected gradually each month to finance predicted future expenses.
She noted that this can be achieved by creating a list of all annual educational needs, calculating the total required funds, and then dividing that total into a regular monthly allocation. According to Aliyah, the success of managing educational costs is not solely determined by the size of one’s income, but rather by consistency in building a family financial management system.
She also advised the public to open a dedicated education account separate from daily operational accounts. This education fund can be replenished automatically each month through an auto-debit feature to ensure it does not mix with other needs. Furthermore, families are advised to maintain two types of budget planning: a monthly budget for routine needs such as tuition, transport, and tutoring, and an annual budget for costs that arise during specific periods, such as enrolment fees, books, uniforms, and school activities.