Get a head start with saving for your child’s education

With the academic year in full swing our economic realities remind us that education costs will continue to put a strain on already stretched budgets for many parents and caregivers. If this is your truth, the best way to navigate the challenge is with a realistic plan and focused goals that will ensure your child’s access to quality education. 

According to the United Nations Children’s Fund (UNICEF) two years of pandemic-related rotational school schedules have resulted in learners being 75% to a full year behind on their school curriculum, and an estimated 700 000 dropping out, according to The Department of Education.

The cost of education presents one of the biggest hurdles impacting parents’ ability to give their children access to quality education, so it is vital to start saving as soon as possible. A recent Sanlam survey notes that your children’s school career, from primary through to tertiary, can cost  upwards of R1.4 million (for public schools) in today’s money and close to R3.5 million for private schools. This excludes university boarding costs.

As education costs make up a large proportion of a household’s budget, it can add to your budgeting stress. Getting professional help can help you relieve much of that strain. Tools such as the Sanlam Goal Manager can also help you quantify the cost of your child’s educational journey, ensuring your savings keep pace with inflation.

If you start saving R500 a month when a child is born and keep that up until the end of high school, assuming your investment achieves a 10% return annually, you can potentially save more than R300 000 by the time they start university. But delaying this until a child starts primary school will give you an investment return of less than R140 000. If you wait even longer and only start saving when your child starts high school, you will have less than R40 000 saved. In other words, the later you start, the more you will have to save per month to reach the same goal.

Whatever schooling option you decide to take, be it online or traditional, public or private education, your financial planning will be a crucial determinant in whether you reach your goal. Having a professional in your corner will give you the confidence of knowing that you are doing everything you can to secure your child’s future.

Sanlam Life is a Licensed Life Insurer, Financial Services and Registered Credit Provider (*NCRCP43)