A parent wants to ensure the best future for their child. One of the best ways to give your child a head start in life is to help them get quality education.
A lot of South Africans. However, are not saving up for their child’s education. This is mainly due to the challenging economic situation in our country and living expenses. The cost of education rises faster than inflation unfortunately. If education seems expensive now, in the future, it will be even harder to cover all the costs.
If you have or are going to have a child soon, here are a few tips for saving for your child’s education:
1. Start Now
Start saving for your child’s education as soon as possible- if you can, before your child is born. The sooner you start saving, the faster your money will grow and the less you must save monthly.
2. Consider taking ownership of the investment
While it may seem like a good idea to invest money in your child’s name, you may want to keep it in your own name. If the money is in their name, once your child turns 18, they can spend the money however they want- and they may not have their priorities set on education at that stage of their life.
3. Do your homework when it comes to fees
Although private education in South Africa is excellent, the cost to send your child to a prestigious school can be crippling. Decide early on what type of school you’re going to send your child so that you can save accordingly. Remember a goal without a plan is just a wish.
4. Find the best method to pay for fees
Some schools offer a discount if fees are paid upfront for the year instead of monthly or quarterly. This may be a good offer to take up if the discount is a significant amount. On the other hand, you may want to consider whether you should rather invest the money and pay the school fees in monthly instalments. Often, debt is the deciding factor for parents. If you must take out short-term debt, such as credit card and retail card debt, it may cost you more than the rebates offered by the school. There is no such thing as good debt though.
In conclusion start now and have a set plan. Our kids are our future leaders and you want the best for their future.
Written by: Andre Becker, Ubuntu Capital Momentum Financial Planner
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