Saving is essential
JOBURG – With another school year already in full swing, it's important to look at the importance of planning and preparing financially for a child's educational journey.
Most people, it seems, understand the importance and value of a good education.
While most parents prioritise saving for tertiary education, the truth is that saving for the foundation phase of your child’s education is just as important, if not more important. Consequently, preparing for your child’s education should start as soon as they are born.
“The sooner you start saving for your child’s education, the more time the money will have to grow,” said Mark Lapedus, divisional director at Liberty Investments.
School fees increase by about 10 per cent a year and with this in mind, checking in with a financial adviser is a good place to start.
Boitumelo Mothoagae, a financial adviser at Liberty, gives tips to assist parents in putting together a solid plan towards saving for your child’s education at different stages:
- Start saving during pregnancy
It would be wise to start saving for your child during your pregnancy. While it might seem like you’re jumping the gun, once you find that you’re having a child, there may be many things that you would need extra money for once your little one arrives, such as an unexpected trip to the doctor’s rooms or additional educational services to boost your child’s learning abilities.
- Stay disciplined to enjoy the power of compound interest
It is very easy to become distracted when saving for a long period of time. However, you can find comfort in knowing that compound interest is working in your favour. It is essential to start saving for your child’s education at an early stage to ensure that the money can mature as your child grows.
- Make sure your goals are realistic
While having big dreams for your children and their education is encouraged, saving and financing their education requires a more realistic approach. The amount of money you can save, the amount of time you have to save it and the different institutions that you hope to send your child to are all factors that need to be considered when saving for your child’s education.
“Saving for your child’s education shouldn’t be a daunting task. If you start planning early this will help you to avoid taking out loans that may take you years to settle,” concluded Mothoagae.
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