Strategies to Combat Education Inflation

Every year, education costs tend to increase continuously. From initial fees, monthly tuition, to various supporting learning needs, everything can rise over time. This condition is often referred to as education inflation, where education costs rise faster than other expenditures. For many parents, this increase can become a major financial challenge. If not prepared from the start, education expenses can feel increasingly burdensome as children advance to the next school level. Therefore, it is important for parents to have the right financial strategy so that educational needs can still be met without disturbing overall financial stability. Impact of Education Inflation Education inflation often does not feel immediate in the short term. However, its impact usually becomes apparent as school costs increase year by year. This rise can be influenced by various factors, such as improvements in educational facilities, school operational costs, and adjustments to evolving curricula. The real impact of education inflation is disrupted cash flow, forcing parents to take on debt, or even more extremely, sacrificing retirement funds that are equally important to prepare. Without thorough planning, this situation could weaken parents’ finances. Therefore, building a habit of saving in the bank far in advance can be a simple step to gradually prepare education funds. By setting aside a portion of funds regularly, parents can have a more ready financial reserve when educational needs increase in the future. Do not wait until the child is approaching school age to start saving seriously. Here are some strategies to face education cost inflation. Start as Early as Possible The longer the delay, the greater the burden to bear. Conversely, the earlier the start, the lighter the load. Ideally, preparing children’s education funds should begin from the child’s birth. That way, there are several years to save in the bank. Saving Rp500,000 per month for 15 years certainly feels lighter than saving Rp3 million per month for 5 years. Time is the best ally in combating education inflation. Calculate Targets Realistically Planning without numbers often becomes too optimistic or too lax. Parents must determine early on where the child will be schooled, estimated tuition costs, and how long until that level. In addition, parents must also estimate the increase in those education costs, especially tuition which routinely rises per semester. Create a simple simulation with concrete figures. Separate Education Funds from Regular Savings A common mistake that seems trivial but has quite an impact is mixing all funds in one account. It is best to save in a digital bank that is truly dedicated to children’s education savings. There are several benefits to this separation: the funds are not used for consumptive needs, growth is easier to monitor, and it encourages more discipline in planning. Review Periodically Conduct evaluations every few months or at least once a year. This evaluation aims to determine if the target is still realistic, whether monthly contributions need to be increased, what challenges are faced, and think of ways to overcome them. Tabungan NOW to Support Saving Habits As a bank with digital services, Tabungan NOW available at neobank from Bank Neo Commerce can be a choice for parents who want to save for their children’s education more practically. Tabungan NOW offers competitive interest rates with daily compounding. Through the app, customers can monitor savings progress more transparently. PT Bank Neo Commerce Tbk is licensed and supervised by the Financial Services Authority (OJK) & Bank Indonesia (BI), and is a participant in the Deposit Insurance Corporation (LPS) guarantee. The interest rate itself may change according to bank policy and OJK regulations. Results obtained will vary depending on customer discipline in saving and individual financial conditions. Start taking small steps to face the rise in children’s education costs in the future. Download the neobank app from Bank Neo Commerce and learn more about Tabungan NOW.