The cost of education is expected to increase by about 9% per year. This means that in 10 years’ time you could be looking at school fees of around R50 000 per annum – and that’s for a public, not private school!
“The most recent update, included in the latest Consumer price index release1, shows that the cost of education rose by 9,3% in March 2015.”
Source: Stats SA
Add to that the cost of uniforms, sports gear, music lessons and for some extra maths and science lessons and you’re looking at a rather daunting sum.
Rising education costs present a barrier for those seeking an education. Stats SA’s latest General Household Survey reports that 33% of individuals aged 5–24 indicated that a lack of money was the reason they were not attending an educational institution.
The idea of starting to save early is certainly not a new one. However, it’s the ‘how’ and more importantly the ‘how much’ that need a bit more explanation. The best place to start is with your household budget – this will tell you how much you have available to invest.
How much money do I have available for education savings?
Think you know what you’re spending your money on every month? Put it to the test there are multiple websites to do budgeting here are a few:
Now you’re almost ready to start making the most of your children’s education funding.
What does it actually cost?
An astronaut, a teacher, a fireman, a doctor… Children dream of what they would like to become when they’ve grown up. Help them by providing the best opportunities with which to achieve them.
To do this you need to know how much to save, coupled with how long you have to save (estimated timeline). This calculation is done by adding up all future education costs and then applying the education inflation increase; remember to take everything into account like accommodation, spending money, petrol etc. This is the most important calculation as this will determine your goal you are working towards.
When should I start saving for education?
As soon as you are ready. Do remember with investing your investment profits are directly related to the time allocated to the investment this means the sooner you start and the more time your investment has the less funding you need to provide and the easier this goal will be on your budget.
If you would like sound financial advice on any of the above mentioned steps full in your details and one of our professional advisers will contact you to arrange a meeting.
Written by Wade O’Donoghue
Tags: investments, saving for education, savings
This post was written by thys