Having a child is one of the most important milestones in many relationships and understandably, the decision to start a family is often taken by overjoyed would-be parents who plan to spend many happy years raising their children. However, without careful financial planning you may not be able to provide for a key expense in your child’s upbringing: education.
Education – A Major Expense
In contrast to many countries where education is free to the public, South Africa has seen the cost of primary, secondary, and tertiary education increase in recent years.
As parents seek out the best schools for their children, be they private schools or public schools with reputations for academic excellence, the cost of educating a child who starts Grade One this year may range between R300 000 and over R 1 Million by the time the child completes matric and qualifies with a four-year degree or diploma.
Without careful planning, the cost of educating your child over time may place serious strain on your finances – even worse is the prospect of your son or daughter not being able to attend college or university due to a lack of funds. Fortunately, by planning for your child’s education early on you will be able to provide for an excellent education while staying within your budget.
Planning for your Child’s Education
By saving for your child’s education from the time he or she is born, you should be able to give yourself a five to six year head-start before school fees begin to weigh on your finances. By meeting with your financial advisor you’ll be able to calculate how much you should save each month to build up an education fund for your child.
New parents should remember that their monthly expenses will increase once the baby is born, with the cost of baby food, nappies, toys and other essential items amounting to thousands of rand each month. Before your child is born, it is vital to assess your monthly budget and make adjustments to your other expenses, starting with optional extras like dinners out and holidays. If you plan to move to a larger home once your baby is born, this expense should also be taken into account.