Parents face the rising cost of education amid a deepening cost-of-living crisis and several years of recession and pandemic-related upheaval. This is as South Africans have geared up for the start of the 2023 academic year.
In the struggle to afford daily essentials – many are considering alternatives to traditional schooling, including the fast-growing options of online and homeschooling.
Why now is the time to start saving for your child’s future – and how to do it.
“What parents need to understand is that education will get more and more expensive over time, outstripping salary inflation,” explains Marius Pretorius, Head of Marketing Retail Savings and Income at Old Mutual. “In real terms, education inflation outpaces the Consumer Price Index [CPIX] by between 2.5 and 3%, making it unlikely that you will be able to save the full cost of your child’s university fees.”
The rising cost of education in South Africa
But, says Pretorius, that’s not necessarily the goal of a workable educational savings plan.
“Rather than getting discouraged by an impossible figure, it’s important to understand the principles of an attainable savings plan and to focus squarely on the underlying aim – that is, to support your child to become a balanced, functional, and independent member of society in whichever ways best suit their unique passions and abilities.”
Pretorius offers the following five tips for embarking on an educational savings plan
“This may or may not include a university degree. Your child may require financial support to learn an in-demand trade such as plumbing or to start their own business.
Stay open to a wide range of options and remember that by the time your child finishes school, there will be jobs that don’t currently exist,” advises Pretorius. “This will help you to navigate the decades-long journey of educating a child.
Consider the options
According to research from the Old Mutual Group, putting a child through the public primary and high school system will cost on average R651 313. To put a child through private schooling would cost parents R1 901 549 on average.
READ MORE: Savings Month 2022 – Key aspects of saving
Public primary school fees are currently about R24 408 a year, while private primary schools cost about R71 496 on average per year. Sending your child to a government high school will cost around R36 072 per year, while a private high school is likely to cost you between R105 084 per year.
“The definition of a quality education is a very personal one that’s relative to your values, your lifestyle, and where you live,” says Pretorius. “It’s about more than a school’s pass rate and, at the same time, fancy facilities like indoor swimming pools are not necessarily accurate indicators of value, either. Learn as much as you can about the schools in your area so you can make an informed choice about what’s best for your family.”
Factor in the hidden costs
Fees are not the only cost of education, warns Pretorius. Parents must also make provisions for transport, aftercare, uniforms, sports equipment, food, and other expenses – all subject to inflation in their own right.
READ MORE: Education plans
For those following alternative routes, there is the cost of a device with the right specifications to enable online learning, fast and reliable wi-fi, and in-person tutoring.
Start early and stay the course
Examine your money habits
Speak to a financial planner
Finally, says Pretorius, saving for your child’s education and sticking to your financial plan is important for raising happy and independent adults,” he concludes.
