Investing in your child's education is often one of the most important yet challenging saving endeavours you can undertake and as a parent you don't need any reminding of the urgency to start planning and saving today.

Having a baby has financial implications and most new and future parents need to start saving straight away if they want to be financially prepared to fulfil the dreams they hold for their children. Many new parents, however, neglect to take care of their own futures first.

You can start by considering these three steps to take care of your own future:

  • Document your will
    If you’ve got a spouse and a baby on the way and you haven’t updated your will in a while (or simply don’t have one) then this should be your first priority. If you need help with this, give me a shout and I can assist.
  • Plan for your retirement
    By saving for your retirement from an early age, you ultimately free your child from the financial burden of caring for you in your old age. Consider more affordable ways to invest in your retirement such as the new tax free savings accounts. (The money paid into a tax-free savings account is not taxed when cashed out, and neither is the interest that it gains.)
  • Insure your life
    Life insurance doesn’t cost much compared to the peace of mind that it provides. As a couple, the best option is to arrange life cover equal to ten times your gross annual income.

Now you can focus all your attention on providing the best for your baby’s future.

Whether your child has just started their school career or has already matriculated, there are many options for parents to provide the money their children may need to finance their education.

  • Invest in a unit trust
    This investment is a very useful and flexible option. Unit trusts allow you to make regular contributions whenever you have some cash to spare. This option is robust if you still have time to accumulate finances as you can increase, decrease, stop and re-start your investment without paying any penalty fees.
  • Deposit cash into your bond account
    Paying a little extra into your bond account is a good way of creating a nest egg that you could tap into to cover expenses such as your children's tuition fees.
  • Invest in academic and sports achievements
    If your child excels at a particular subject or sporting activity, ensure that they get all the support they need to thrive. Educational and sporting bursaries could potentially save you anything from a portion to the full cost of their education.

If your child is already in their senior phase or has matriculated, consider the following:

  • Take out a student loan
    You may not have time to settle your mortgage or accumulate savings, but perhaps you will be able to act as surety for a student loan. This will cover a large portion of the fees, and will also ensure your child does not have to worry about finances while at school.

    Acquiring a loan can be difficult as lending regulations have become stricter in South Africa, therefore it is advisable to speak to your banker about the various options that are available.

  • Apply for study finance
    Many institutions and Government bodies offer financial aid to students. The National Student Financial Aid Scheme of South Africa (NSFAS) is an example of such a body. Often, the aid is offered to students from disadvantaged backgrounds or those pursuing a specialised field of study such as medical research.

Planning for your financial future? I can help you out. Let’s get in touch!