The reality of saving for your child’s education.
Most South Africans agree that education is an important enabler and that access to education should not be hindered by personal financial constraints. Regardless of their financial circumstances, parents want to secure the best education for their children, and are often presented with tough choices.
A worthwhile investment that comes at a cost
For a child to study at a tertiary institution, parents need to fund at least 15 years of fees in total and other education related expenses. While it is true that approximately two out of three public schools are no-fee schools and that these schools accommodate about 85% of learners, research by Groundup shows that a grade 8 learner attending an ex Model C school is two to four times more likely to qualify for university acceptance than a learner at a no-fee school. A quick glance at our labour statistic shows that the official unemployment rate for graduates stands at 7% compared to 31% for those with less than matric.
What is the best way for parents to ace this test?
Be clear on goals: Make sure you discuss your differing views on your child’s education. Picking the right school with good teachers and extracurricular activities requires greater financial commitment and can be difficult to fit into your budget.
Devise a realistic plan: You’ll probably be paying multiple sets of fees at the same time. If your children are going to attend public fee-paying schools, you can expect to pay at least R500 – R1 000 pm and up to R3 000 pm per child for an ex Model C school. However, fees are not the only concern: school uniforms, shoes, stationery, extracurricular expenses and tours can come as quite a shock to the budget.
Budget: Devise a budget that includes some level of savings to help you when your income can’t cover certain costs (e.g. one-off events like additional tutoring or your child being selected for a tour) and also some longer-term savings towards tertiary education.
Use to determine how much you should be saving for university. For example, you should be saving about R1 400 per month towards a BCom degree at UCT if your child is six years old and starting school now. This amount should increase with inflation each year. To cover both fees and accommodation the required amount becomes R2 200 pm.
Start saving as early as you can: Time has a huge impact on the savings required. For example, if you wait until a child starts high school at age 13, the required saving for a BCom degree at UCT increases to R2 300 pm for tuition and R3 700 pm including accommodation. If you started saving R2 300 pm when your child was six years old, you would have saved enough to cover about 90% of the tuition costs by the time your child starts high school, without making any further savings. All you would need to do is leave the money invested until your child matriculates and goes to university or college. Similarly, starting with R2 300 pm when your child is born means you can effectively stop saving for tertiary tuition fees by the time your child reaches grade 2.