Ed­u­ca­tion isn’t cheap

Key to se­cur­ing your child’s fu­ture is to start sav­ing

Weekend Witness - - Scene Around -

KICK start 2014 smartly: start sav­ing for your child’s fu­ture — a good ed­u­ca­tion can cost hun­dreds of thou­sands of rands!

At the start of ev­ery year, we feel the strings on our purses be­ing pulled. Lux­u­ries must be cut to keep up with the ris­ing cost of rent, food, elec­tric­ity and trans­port; not to men­tion the long list of chil­dren’s ed­u­ca­tion ex­penses.

And with ed­u­ca­tion in­fla­tion sur­pass­ing gen­eral in­fla­tion, the fu­ture won’t get eas­ier. The long­term so­lu­tion? Start sav­ing to­day for your chil­dren’s ed­u­ca­tion.

“We all want the best for our chil­dren and this means get­ting them a good ed­u­ca­tion to en­sure they ful­fil a greater pur­pose in their lives,” said Sinenh­lanhla Nzama, an in­vest­ments mar­ket­ing ac­tu­ary at Old Mu­tual.

The Old Mu­tual Sav­ings and In­vest­ment Mon­i­tor shows that 54% of South African par­ents do not know what the fu­ture cost of ed­u­ca­tion will be, and only 40% are sav­ing for their chil­dren’s ed­u­ca­tion.

“This is alarm­ing when you con­sider that a good ed­u­ca­tion can end up cost­ing hun­dreds of thou­sands of rands,” said Nzama.

“Our stats show that peo­ple are tight­en­ing their belts and ed­u­ca­tion is one of the main ar­eas where bud­gets are cut,” said Nzama. So what costs are we look­ing at? In 2014, a year’s ed­u­ca­tion for one child could cost be­tween R23 000 and R42 000, de­pend­ing on the level (pri­mary school, high school, univer­sity) and type (pri­vate, pub­lic) of ed­u­ca­tion.

A 2033 fore­cast will see you spend­ing be­tween R118 600 and R215 500 for one year’s ed­u­ca­tion.

If your child is start­ing Grade R this year, the com­bined cost of ed­u­ca­tion is ex­pected to be R950 800 for pub­lic schools and R2 207 000 for pri­vate. This in­cludes pri­mary school, high school and a three­year univer­sity qual­i­fi­ca­tion. The fig­ures on the cost of ed­u­ca­tion are based on se­lected ex­model C gov­ern­ment and pri­vate schools and uni­ver­si­ties. The pro­jected an­nual school fees are in­creased at a flat rate of nine per­cent an­nu­ally. IM­AGE: GRAPH­ICS24

Do not panic — em­power your­self with in­for­ma­tion and a plan.

“Whether you are new par­ents, a sin­gle par­ent or an es­tab­lished fam­ily, the key is to start sav­ing early,” said Nzama.

“The later you start sav­ing, the more you will need to save per month.”

For ex­am­ple, look­ing at the fig­ures in the ta­ble and as­sum­ing a 10% in­vest­ment growth be­fore fees, you need to save about R460 a month for univer­sity tu­ition (ex­clud­ing ac­com­mo­da­tion, books and trav­el­ling costs) if your child is born in 2014.

How­ever, this is about R870 if your child is al­ready 10 years old!

Th­ese monthly sav­ings will also need to be in­creased by nine per­cent with each year go­ing for­ward, to keep up with ed­u­ca­tion in­fla­tion.

— Busi­ness

Ed­i­tor.

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