If you're a parent or planning to become one, you want your child to have the best possible future. You dream of sending them to a top university, which hopefully can help them land a stable and successful career. The good news is saving up for a college fund as soon as possible can make this happen.

A university or college education in the Philippines is getting more expensive every year, so families need to start saving early and be smart about it. Here is a road map that lays out the groundwork you must cover.

Your college fund's financial goal depends on the college or university you're eyeing for your child.

If you check the tuition fees of private universities like Ateneo de Manila University or De La Salle University, their websites state that one semester of 20 units can cost an average of ₱98,516 and ₱140,000 respectively, as of 2023. That amount can increase annually, starting at 5%.

Inflation typically shows the increase in the prices of goods and services over a year. It causes the value of your money to depreciate over time. If a year at a university costs ₱280,000 today, it may cost ₱296,800 a year later because of inflation, which rose to an annual average of 6% in 2023. Apart from tuition, you still have to consider expenses for transportation, food allowance, school supplies, and books, among others.

You can use AIA Philippines' Financial Needs Calculator to project how much you need to save.

For example, assuming you're now 30 and your child is 5 years old, AIA calculates you need to save ₱2.5 million at least for your son or daughter to enter a private university at 18.

As overwhelming as the number sounds, knowing a ballpark figure gives you direction. It lets you reassess your list of preferred colleges based on your financial capability. (You can choose a state or public university in the calculator.) At the very least, this target amount pushes you to become more motivated to plan your finances better and focus on saving more.

Plan a method that allows you to contribute to the college fund each month consistently. You can set automatic bank transfers from your salary, which is a convenient and hassle-free way to save. Then, stash away any additional income to this account, such as your 13th-month pay, earnings from side projects or cash gifts to your child.

Opt for a savings product that offers high-interest rates. Some savings accounts may provide incentives if you refrain from withdrawing money from the account for a specific period.

The earlier you start saving, the more time your money grows through compounding interest, increasing the value of your savings. However, compound interest alone cannot produce significant returns. It would help if you had other ways to grow—and protect—your money.

Planning to save ₱2.5 million in 13 years (that's ₱16,000 monthly) requires a steady and high-income source. It's excellent that your job now offers that stability, but you can experience unexpected financial setbacks at any time.

For instance, a sudden medical emergency can drain your child's college funds. That's why it is crucial to safeguard your family's future. Life insurance secures your child's financial needs in unforeseen circumstances.

You can put your tuition fund savings into education insurance, depending on your financial capacity. A structured savings plan like this instills financial discipline and reduces the burden of college expenses in the future—it can help you avoid incurring debt, for example.

Besides guaranteed cash payouts, an excellent educational plan is linked to investment funds to maximize savings. For instance, AIA Philippines' Future Scholar, which comes with life insurance already, allocates a portion of your premiums in professionally managed funds. If the investment performs well, your policy can deliver more cash value growth than a basic bank savings account.

Beginning your education plan premiums early can result in reduced monthly contributions. You also give your money more time to grow its investment.

You can potentially reach your college fund goals more quickly with investments such as mutual funds or bonds. Holding onto these longer can offer higher returns and weather market fluctuations. But investing will always have a degree of risk, so it's wise to diversify.

Most importantly, though, put your money in investments you understand. Seek an AIA Life Planner  to help you develop an investing strategy that aligns with your risk tolerance and is appropriate for your situation.

Your child gains financial literacy skills when you talk to them about how you're saving for their college education. The topic provides an excellent opportunity to teach them about saving money, budgeting, and financial responsibility. Consider the following tips when talking to your child about college savings.

Holding age-appropriate conversations about money with your child helps build their financial confidence. Find a suitable moment to broach the topic, but avoid making it a one-time event. Keep money talks an ongoing conversation as your child grows up and their financial literacy broadens. Avoid discussing money during stressful times or when they're preoccupied with other matters.

When they're at an appropriate age, talk to your child about your efforts and expectations for their college education. Discuss the opportunities and limitations of the college savings plan you've built. Be transparent about what you can afford. Knowing how much is in their college fund allows your child to set realistic expectations, from the school to housing.

Build trust with your child by asking for their input and thoughts on savings when they're near college age. This way, you empower them to take ownership of their education, primarily when financial constraints exist. They may want to contribute, like working part-time or applying for financial assistance at their preferred college.

Reassure your child that you support their academic goals during these conversations. Stay open so they know they can always come to you with questions or concerns about college savings.

Planning and preparing for your child's education fund is a significant financial goal that requires careful planning. The right time to save is to start early to achieve your target amount. Use every saving method available, from compound interest to education insurance, to meet your child's future educational needs.

Encouraging your child to talk about the college fund can be a great way to teach them about financial literacy and responsibility. Following these steps can help lay a strong foundation for your child's future and set them up for the best possible chance of success.