When you cannot fully fund both, how do you decide?
For many Malaysian parents, paying for their children’s education is more than a financial responsibility.
It is deeply emotional.
We want to give our children opportunities we may not have had ourselves. And for some parents, being able to say, “Don’t worry about the money. Just concentrate on your studies,” feels like part of being a good parent.
But what happens when supporting your child’s university education begins to compromise your own financial future?
This is a conversation I increasingly believe families need to have — especially as parents enter their 40s and 50s.
The Malaysian middle-class dilemma
Imagine this. You are in your early 50s. Your child has received an offer from a university overseas, or perhaps from a private university in Malaysia.
You have some savings. You have EPF. Perhaps you also have investments and a property. Technically, you could pay for the education. But doing so might mean using a substantial portion of the money you had intended for the next stage of your own life.
So the question becomes: Do I give my child the best education I can afford today — or protect more of my money for my own future?
There is rarely a simple answer.
Education is important. But so is your future.
In Malaysia, families have several possible ways of financing higher education. For eligible students studying locally, PTPTN education loans can help finance part or all of tuition fees and living expenses, depending on the programme and eligibility.
There may also be scholarships, bursaries, university financial assistance, education savings, part-time work, or other family arrangements.
For overseas education, however, the financial commitment can be much larger once we include not only tuition fees but also accommodation, daily living expenses, insurance, travel and the impact of currency movements.
Parents sometimes look at the total amount and think: “If I have the money, why shouldn’t I use it for my child?”
But having the money today does not necessarily mean that the money is truly available to spend. Some of it may already have another job: to support your future self.
You can borrow for education. Retirement offers fewer options.
This is one distinction I encourage parents to think carefully about. A young adult potentially has decades of working life ahead.
Depending on the circumstances, there may be different ways to fund an education — PTPTN for eligible local studies, scholarships, education loans, choosing a more affordable university, studying locally before going overseas, working part-time, or contributing towards postgraduate studies later.
But when parents reach their 60s or 70s and discover that their money is insufficient, their options become much narrower. There is no straightforward equivalent of a student loan to fund another 20 years of retirement living expenses.
And we should not automatically assume: “My children will take care of me later.” They may want to. But by then, they may also be paying for their own home, raising children, supporting their family and building their own financial future.
Helping our children today should not unintentionally create a situation where they need to financially support us tomorrow.
How much is “enough” for your own future?
This is where the numbers matter.
Under EPF’s Retirement Income Adequacy framework, the three reference levels are Basic Savings of RM390,000, Adequate Savings of RM650,000 and Enhanced Savings of RM1.3 million. The Adequate level is based on estimated monthly expenditure of RM2,690 for a senior single person in the Klang Valley, projected over 20 years.
These figures are useful benchmarks, but they are not personalised retirement plans. Your own number could be very different.
A couple who owns their home outright, lives simply and has modest lifestyle expectations may need something very different from a couple who wants to travel regularly, support ageing parents, maintain multiple properties or provide ongoing financial support to their children.
Healthcare, longevity and inflation matter too. That is why before deciding how much you can contribute towards your child’s education, another question should come first: “What does my own future life require?”
Sometimes the hardest part isn’t the mathematics
Interestingly, when I have conversations about money with families, the difficult part is not always calculating the numbers. Sometimes the numbers are quite clear. The emotional part is harder.
A parent may know that spending another RM200,000 on a child’s education will significantly affect their own financial security — and still find it almost impossible to say no.
Why? Because underneath the financial decision may be a belief such as: “A good parent should give their children the best education possible.” Or: “I don’t want my child to struggle the way I did.” Or even: “If I can afford it somehow, I should pay.”
These beliefs are understandable. But this is where financial planning meets the psychology of money.
The question is no longer simply: “Can I pay?” It becomes: “What am I giving up in order to pay — and am I comfortable with that trade-off?” That is a very different conversation.
It doesn’t have to be all or nothing
Parents sometimes see only two choices: pay everything or pay nothing. There are many possibilities in between.
Perhaps the parents fund undergraduate studies but the child funds postgraduate studies. Perhaps the family sets a fixed education budget, and the child chooses a university within that amount.
Perhaps parents cover tuition while the child contributes towards living expenses. Perhaps the student begins locally and transfers overseas later.
Or perhaps the family decides that an overseas education is affordable — but only after confirming that the parents’ own long-term financial plan remains healthy.
The objective is not to spend as little as possible on your children. Nor is it to protect every ringgit for yourself. It is to make the decision consciously, knowing what each choice means for the whole family.
Start the conversation earlier
One of the best things parents can do is begin planning before university application letters start arriving. When children are still young, time gives us options.
We can estimate future education costs, build a dedicated education fund, review the plan periodically and decide how much of the cost parents realistically want to fund.
More importantly, we can talk to our children. Instead of saying: “Don’t worry. Daddy and Mummy will pay for everything,” perhaps the conversation can become: “This is what we have prepared for your education. Let’s look at the choices together.”
That does not mean loving our children less. It means helping them understand that money involves choices, priorities and trade-offs. That itself is an important financial lesson.
Prepare for their future — without sacrificing yours
As parents, naturally we want our children to start adult life with every possible advantage. But our responsibility to our family also includes preparing ourselves for the later chapters of our own lives.
Your children’s education matters. Your future matters too.
Good financial planning is therefore not simply about deciding which goal gets more money. It is about understanding what matters to your family, examining the resources available, recognising the trade-offs and finding a balance that allows both generations to move forward with greater confidence.
Sometimes the most loving financial decision is not giving our children everything we possibly can. It is giving them meaningful support without making our future financial well-being their future responsibility.
Lim Hooi Hooi, CFP®, IFP®
Licensed Financial Planner | Financial Life Coach
Co-author of The Mindful Wallet
I help individuals and families connect their money with the life they want to live, combining financial planning with the psychology of money and Financial Life Coaching.
