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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.
- Fin24
Do you have a pressing financial question? Post it on our Money Clinic section and we will get an expert to answer your query.
Disclaimer: Fin24 cannot be held liable for any investment decisions made based on the advice given by independent financial service providers.
Under the ECT Act and to the fullest extent possible under the applicable law, Fin24 disclaims all responsibility or liability for any damages whatsoever resulting from the use of this site in any manner.
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.
- Fin24
Do you have a pressing financial question? Post it on our Money Clinic section and we will get an expert to answer your query.
Disclaimer: Fin24 cannot be held liable for any investment decisions made based on the advice given by independent financial service providers.
Under the ECT Act and to the fullest extent possible under the applicable law, Fin24 disclaims all responsibility or liability for any damages whatsoever resulting from the use of this site in any manner.
