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When we pay for tuition of our children or even for our own schooling, we must learn to take advantage of discounts when these are made available.  

Usually, tuition may be paid annually, semi-annually, quarterly, or even monthly. In some cases, there is a discount given for payments paid in advance of the school year. If the discount is bigger than 3%, which is what a short-term savings deposit will yield, then, it is best to take advantage of that discount. Sometimes, this is not clearly stated in the schedule of amounts due. Be sure to compare the amounts carefully so you understand what you are actually paying for.

For example, if the annual tuition is PhP10,000 and the monthly payment is PhP1,000 for ten months, clearly, there is no discount given for paying in advance. However, if the monthly payment is say PhP1,100 for ten months, then you have a 10% discount if you pay PhP10,000 in advance. This is like “investing” your money in paying for tuition in advance at 10% rather than putting it in a savings account that will only give you 3%.

If there is no discount given for advance payment, strictly speaking, it is best to just pay on installment but there are reasons why you should consider paying one time in advance if you have the money anyway.

FRANCISCO J. COLAYCO is an entrepreneur, a venture developer and financial advisor. He has over 40 years of experience that covers service contracting in the Middle East, manufacturing, trading construction, shipbuilding, management consulting, banking and financial services. He is the Chairman of the Colayco Foundation for Education (CFE) and the author of bestsellers: Wealth Within Your Reach (2004 National Book Award for Business and Economics), Making Your Money Work (Nominated in 2005, National Book Awards Business and Economics), Pera Palaguin Workbook and Money for Kids. The books are available at National Bookstore, most other bookstores or directly from CFE. He joins our website blog to share with ordinary income earners, Overseas Filipino Workers (OFW) and students the simple principles to "Save what you earn and grow what you save." CFE conducts talks, seminars, and workshops. “Managing Personal Finances For The Future” a seminar-workshop developed in partnership with the Ateneo Graduate School of Business, Center for Continuing Education. June 21, 2008, Saturday, 9:00 am to 6:00 pm. For registration and inquiries, please call Marleth Calanog at 830-2050. CFE is also the producer of the PISObilities DVD series, available at your favorite audio-video shops in May 2008. Learn more about the advocacy at http://www.colaycofoundation.com/, email info@colaycofoundation.com, via SMS +63917-8537333 or through (632)637-3741.