With steadily increasing electricity costs and unstable service delivery, rampant price hikes are occurring across various industries in the country.
Living in South Africa is not cheap and it’s becoming increasingly difficult every year with little relief in sight.
Included in this economic environment is the cost of educating children.
For many parents across South Africa cost of education has become their number one concern, especially when one factors in sharp increases in education inflation.
While general inflation stands at 6% – school price inflation is between 9-10%, which may mean that each year those school fees will leave you with the distressing thought: Will you be able to afford education for your children?
The cost of a university qualification
In 2015, a BCom degree from the University of Pretoria that requires three years of studying added up to R110 770, with the first-year costing around R36 000, the second year R33 000, and the third year R31 000.
In 2017, however, the numbers have changed quite significantly, with the cost for a BCom degree ranging between R39 000 –R45 000 for the first year of studies only.
You might be a lucky parent with a child sharp as a pencil, who does so well they receive scholarships, or academic merits. However, the scholarship may not allow you to save on excursion and stationery costs (which may amount to more than R1000 a month).
Even if you should be so lucky as to cut those costs, there are additional expenses that come with obtaining a degree. This includes one of the major costs of university, namely, living expenses.
The University of Pretoria, for example, offers residence accommodation that starts with the reservation fee of R5 700, after which you can choose a single room costing about R34 200 per year, or choose to share a room which decreases the cost to R31 700.
And then, you should think about what your children will eat for those 3-5 years. Tuks offers a catering service at R28 800 per year that includes three meals a day.
So, it is obvious that it will cost you a pretty penny to get your children through all the stages and phases of education, before you can write off the expenses that come with having children.
How to cover the costs
But the question on many minds is often how to even start covering these costs, and what your contingency approach should be.
Since high school and tertiary education tends to increase in cost annually by 4% above the rate of inflation, the best time to start working on paying for your child’s college education would be shortly after the child is born.
Another way to get a head start is to take your annual bonus and put it into a Retirement Annuity.
You can capitalise on your saving plan by topping it up with the money you get back from the taxman plus the amount by which your bonus exceeds the previous year’s bonus each year.
Whatever education plan you choose, the important thing is to get going sooner than later.
What about other solutions?
On the other hand, there are some who might’ve missed the train and now your child is all grown up and on their way to high school or to get a tertiary education.
If you didn’t make a plan early on in your life and now don’t have the funds to pay for your child’s education – there is another way to cover the costs.
One of the best ways to plan for your child’s future is to consult a trusted investment group, while a Personal Loan is a viable option for support with smaller, monthly necessities.
DISCLAIMER: This article is for informational purposes only and should not be construed as financial advice. Amounts quoted were correct at date of publication. Hippo.co.za, who commissioned this article, does not accept responsibility for any losses or damages that may occur as a result of this article.