Data provided by McGregor BFA
All data is delayed
See More

Saving for a child's future

Dec 07 2011 07:24

Related Articles

Are private schools worth it?

Too tough to pass

SA saves for education, not retirement

Vavi: Education can transform society

Free tuition eyed to boost SA skills

Nzimande outlines student debt plan


A Fin24 reader asks:

How can I plan for my child's education?

Heather Robertson, a certified financial planner at Blink Consulting, responds:

All parents want their children to achieve their fullest potential and most agree that education is key.

But a good education comes at a price. From primary school through to university, education bills will be one of your heaviest financial burdens as a parent.

Fortunately, there are a number of strategies you can use to maximise the savings you put away for your child's education. Below is a brief overview of the most popular options currently available.

Fundisa account 

This is a government-incentivised education plan that gives you an annual bonus of up to R600 on an annual saving of R2 400. The funds must be used for your child's tertiary education, otherwise the bonus will be forfeited.

Lump sum investment

If you have a lump sum available now, it can be invested to provide a sizeable return when you need it most.

Due to the magic of compound interest, the longer you can leave the funds invested, the greater your return is likely to be. (Compound interest arises when interest is added to the principal, so that from that moment on the interest that has been added also earns interest.)

Education endowment plan

This investment provides a tax-free lump sum after five years. Depending on the product provider, minimum contributions will apply. You can also add premium waivers and investment guarantees.

Life insurance

Although not a savings product, life insurance gives you peace of mind that your child's education expenses will be taken care of should you or your spouse die or become disabled.

When your financial adviser calculates how much cover you need for education, your choice of public or private school, whether funds will be needed to pay for university as well as additional expenses such as uniforms and textbooks will need to be considered.

 - Fin24 

education  |  investing

Not winning the debt battle

2014-04-10 14:10


Read Fin24’s Comments Policy publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
Add your comment
Comment 0 characters remaining

Company Snapshot

We're Talking About: Small Business

Standard Bank is looking for 12 entrepreneurs to participate in a 10-part TV series. They could win a R1m investment into their dream.

ANC set for two-thirds majority - poll

The ANC is on course to win nearly a two-thirds majority in 7 May elections, a poll has showed, confounding analysts who had predicted a fall in support for the ruling party.


Latest elections multimedia

Why Jack Parow wants you to vote on 7 May
The ad the SABC doesn't want to air
Elections 2014 in one cartoon
This year's election posters

Money Clinic

Money Clinic
Do you have a question about your finances? We'll get an expert opinion.
Click here...