More and more we’re becoming aware of the need for the next generation to have the kind of education that will make them resilient and adaptable. For many, COVID-19 related home-schooling created a much deeper appreciation for the schools and teachers that make it possible.
According to the 2019 Old Mutual Savings and Investment Monitor, 45% of urban South African parents are saving for their children’s education. Understandably, the Savings Monitor also found that parents delay saving for their child’s education when they are under financial pressure. The education inflation rate of 9% outpaces general inflation and adds up quickly over the years. This means that if your child started Grade R this year you can expect to pay around R1.6 million for public schooling up to matric and a three-year university qualification. For private schools and university, the costs more than double to R3.7 million.
Starting early is always better. The good news is that there are a number of flexible options available to parents, no matter where they are in their child’s educational journey. Strategic Retail Marketing Manager at Old Mutual, Karabo Ramookho says: “A financial adviser can partner with you to recommend and choose an education plan that takes your specific needs and circumstances into account, including your budget and timeframe. Finding R400 in your monthly budget now to save for your child’s education will ensure that when they reach high school or university, you will be in a much better financial position to cover some of their costs.” Products like the Old Mutual Invest Flexible Plan allow you to save regularly or boost your savings with lump sums, like a 13th cheque or unexpected tax refund, while still giving you access to your money. Other flexible investment options include:
- Unit Trusts - you can select one or more funds based on your personal goals and timeline
- Tax-Free Savings Plans - up to the annual and lifetime limits that an adviser can help you structure
Visit www.oldmutual.co.za/personal/find-adviser/ to find a financial adviser you can trust. You can also test our education calculator to help you determine just how much you should be saving for your child’s education.