A Fin24 user who is in a relatively good financial position is worried he may not be able to send his children to private school. He writes:
I am 68 and a pensioner, but my former employer has kept me on a contract basis until at least June 2013.
I own a fully paid for property, two paid-up vehicles, have R500 000 on fixed deposit and ample life insurance.
However, I have two young children aged 11 and 10 years respectively, both of whom we adopted at birth.
I really want to send them to private high schools - and here lies my problem. I cannot approach a bank for finance at my age and given the cash flow problems the borrowing will generate.
Do you have any suggestions how I can solve the problem, given that private education will set me back about R300 000 over five years for each little one? I would appreciate any assistance. Danelle Esterhuizen, legal specialist for senior market advice at Sanlam, responds:
Working until later in life is always a good financial decision, especially if health permits.
I would suggest an overall relook at your financial needs, including death, disability and retirement planning.
By doing that, you may see that you can spend less money in a certain area where you have sufficient provision. Over time our financial needs change and we should relook them often.
It may be possible and beneficial to use the fixed deposit - or part of it - for education, rather than borrowing money at the bank at a relatively expensive rate.
You can then borrow a smaller amount to add to the portion from the fixed deposit, with your life insurance as security. A smaller amount will lessen the impact on your monthly cash flow.
If there is no way financially, you can consider a good public school as an alternative to a private school.
Do consult a qualified financial adviser to do a proper needs analysis, and to review your current portfolio.
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