Many parents struggle to prioritise saving for their child’s education, with 57% of urban South African parents not actively saving for their children’s education.
This is according to new data provided by Old Mutual, which warns that the situation is expected to worsen as long-term education inflation is expected to reach 9% in 2019 – surpassing general inflation.
“If your child starts grade R in 2019 you can expect to pay between R1,400,000 and R3,400,000, for public or private education respectively, over their school career,” said Marius Pretorius, head of marketing: retail savings and income solutions at Old Mutual Personal Finance.
This rand amount includes a primary school, high school and three-year university qualification, he said.
“The truth of the matter is that education is expensive. If you’ve saved any money and your child is entering a public primary or high school in 2019 you can expect to pay on average about R37,000 this year, while a private primary school and private high school will set you back R92,400 and R148,300, respectively.
“When it comes to university education, parents can expect to pay R64,200 in 2019, on average,” he said.
Pretorius said that parents can avoid this shock by starting to save as early as possible.
While there are various education savings vehicles available, he recommends that parents look at the solutions best suited to their budget, timeframe and their individual requirements.
“Depending on your needs, you can choose between solutions starting from as little as R200. This means by simply cutting out 8 coffees per month you can start saving for your child’s education. Reframing education savings in this way can help parents who are worried about where they’ll find the extra money on a monthly basis.”
“There are hundreds of career options available nowadays, with many more still to come. Just think back a decade or two – data scientists, search engine optimizers and social media lawyers didn’t feature on the ‘options to study’ list and yet today they are sought after skills.
“To set your child up for lifelong success in whichever career he or she chooses, it is essential that you have an appropriate financial plan to back it,” he said.