We all want the best for our children and we work hard to provide for them. One thing is certain: education will probably be one of the largest expenses that you need to plan for in raising your children.
The Independent Schools Association reports that education inflation is always between 2 and 3% higher than national inflation. According to Trading Economics, education inflation is set to increase to 8.2 percent at public schools and 7.8 percent at private schools in 2019. As a parent, this ever-rising cost of education is concerning, leaving many of us wondering how we’ll afford school and university fees now and in five or 10 years’ time.
Last year, disturbing statistics from Curro and ADvTECH schools revealed that the schools lost 3 881 learners because parents couldn’t afford the fees. Meanwhile, St John’s School delivered 15 payment notices to parents for late payments. The reality is that many parents can’t afford to keep their children in prestigious schools, which is why having a financial plan in place to pay for your children’s education is essential.
It’s wise to start saving money for your children as early as possible (even before they’re born). This could help you get a head start in beating education inflation. To develop a robust and inflation-beating financial plan for your children’s education, you’ll need to work closely with a financial adviser and plan for the long term.
How much will you need?
You need to have a monetary target in mind that you need to plan towards. That’s why Liberty developed an education calculator. It helps you to calculate the future annual cost of education based on your personal affordability and inflation.
The calculator is a great tool that considers the years of education, current level of savings, investment term, return on investment and the number of months of saving. Once you understand how much you’ll need, speak to a financial adviser and ensure that, together, you choose saving and investment vehicles that are best suited for your children’s educational needs.
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