Last night, my wife was busy tinkering with Microsoft Excel, trying to figure out how to raise a value to the nth power. I found out later that she was trying out the formula featured in the April 2008 edition of Working Mom magazine. She figured out the formula, which we’ll be featuring out later. In the meantime, the formula featured in the Working Mom magazine goes something like this (for those who abhor algebra, please jump to the later parts):

Projected Tuition = A x ([1 + B] raised to the power of C)

(Yes, I know there’s a better way of presenting that formula, but that’s easier done with a pen and paper, not here. The value of C is 15 for the 1st year. C is 16 is for the 2nd year. So on and so forth.)

We used that formula to compute the college tuition of our 2-year old son, using the following data:

Here’s what we came out with:

The TOTAL? P2,326,393.05. That’s more than 2 Million Pesos. That’s good for 3 cars. It’s equivalent to P155,092.87 per year (computation: TOTAL divided by C) starting now. That’s roughly P13,000 per month (computation: [TOTAL divided by C] divided by 12) that we need to save.

My wife was disappointed because she thought the 2,000 per month she’s currently setting aside would be enough. While savings is a crucial aspect in preparing for the future, including your child’s education, it may not be enough. There is a consensus about the savings must be placed in some form of investment, something which should come naturally to Pinoy Entrepreneurs. We thought of educational plans or insurance, but the relative "safety" of that option was seriously debunked with what happened to certain insurance companies. Besides, wise investments would bring in better returns than educational plans.

In the meantime, here’s the formula to make your life easier. Download the College Tuition Calculator (excel file), then substitute the numbers only inside the box (again, inside the box ONLY). The figures at the bottom will automatically change. Good luck. =)