As the end of the academic year approaches here in Port Elizabeth, saving for your child’s education may already be on your mind for next year.
Perhaps you are wondering how you will pay school fees next year or whether you can afford to send him or her to university one day.
According to a report published by the Organisation for Economic Cooperation and Development, South Africa has the worst unemployment rate among young people aged 15 to 24.
Without a tertiary education, the chances of your child finding long-term employment are slim but a basic university degree will currently set you back a few hundred thousand rand.
The cost of education increases by an average of nine per cent per annum, which means it will generally exceed any salary increases you may receive.
All of the above makes a long-term saving plan essential.
Here are five financial tips for saving for your child’s education:
- Start early: The longer you save, the smaller the chunk of your monthly budget that you will have to contribute.
- Don’t live large: Accept that a lower standard of living now may help you avoid the financial burden later.
- Avoid withdrawals: Making withdrawals from the fund will negate the effect of compound interest and decrease the eventual lump sum available.
- Involve your child: Let them contribute by earning money from casual jobs. Every bit helps and will teach them the value of saving.
- Find funding opportunities: Investigate any scholarships, bursaries or grants for which your child may qualify.
Although it may seem daunting, PWM Financial Management, invite you to talk to them about how you can save for your child’s education – you can’t afford not to.
With acknowledgement to this article.
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