Many South Africans are struggling to prioritise saving for their child’s education in the face of escalating school costs, a worsening cost-of-living issue, and many years of recession and pandemic-related instability.
Given these challenges, many parents in 2023 are contemplating alternatives to traditional schooling, such as the rapidly expanding possibilities of online and homeschooling.
This is according to new research from Old Mutual, which warns that the situation is anticipated to deteriorate as the expense of long-term education outpaces pay inflation and the Consumer Price Index (CPI) by 2.5% to 3% yearly.
“If your child starts from Grade 1 in 2023, you can expect to pay on average between R651,313 and R1,901,549, 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 sum includes elementary and secondary school, but not pre-primary or university.
“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 2023, you can expect to pay on average about R24,408 and R36,072 this year, while a private primary school and private high school will set you back R71,496 and R105,084, respectively.
“When it comes to university education, parents can expect to pay R55,900 in 2023, on average,” he said.
The chart below shows the estimated cost of a year of schooling this year and for the following 15 years, as predicted by Old Mutual.
| Level and type of education | 2023 | 2030 | 2035 | 2038 |
| Public primary school | R24 500 | R41 900 | R61 500 | R77 500 |
| Public high school | R36 100 | R61 900 | R90 900 | R114 500 |
| Private primary school | R71 500 | R122 600 | R180 100 | R226 800 |
| Private high school | R105 100 | R180 100 | R264 700 | R333 400 |
| University | R55 900 | R95 700 | R140 700 | R177 1200 |
Pretorius stated that parents might avoid this shock by saving as soon as feasible.
In reality, given the rate at which school costs in South Africa are rising, it is improbable that you will be able to save the whole cost of your child’s education. However, according to Pretorius, it is not always the purpose of a viable college savings strategy.
He also provided the following advice for starting an educational savings plan:
- Consider the options – the definition of a quality education is a very personal one that’s relative to your values, your lifestyle, and where you live. It’s about more than a school’s pass rate; at the same time, fancy facilities like indoor swimming pools are not necessarily accurate indicators of value. Learn as much as possible about the schools in your area so you can make an informed choice about what’s best for your family.
- Factor in 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. For those following alternative routes, there is the cost of a device with the correct specifications to enable online learning, fast and reliable wi-fi, and in-person tutoring.
- Start early and stay the course – the earlier you start saving for your child’s education, the better. But since you probably won’t save up the total cost, the idea is to contribute consistently, invest strategically to outpace inflation and increase your contributions over time. This will give you a crucial buffer to help you cope with the rising cost of education. You may have to dip into your funds to pay fees, but the important thing is to keep saving and contributing no matter what.
- Examine your money habits – most South Africans will only ever draw up a budget when completing a credit or loan application. Even then, the exercise is typically not very accurate. But the truth is that you cannot save for your child’s education unless you take a long hard look at your spending and work to improve your money habits.
- Speak to a financial planner – when you’re facing the financial challenge of saving for your child’s education, the most effective step is to consult a professional financial advisor and take their lead. A qualified financial advisor can provide the most comprehensive and tax-efficient savings options.
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