Investing in your child’s future

By Drum Digital
22 March 2014

Are you worried you waited too long to start saving for your child’s tertiary education? Don’t fret; it’s never too late to start putting away something for this important step in their lives. We crunch the numbers for you.

A good education comes at a price, one most parents are only too happy to pay. According to Sinenhlanhla Nzama, an investments marketing actuary at Old Mutual, a three-year bachelor of commerce degree at a university can cost around R144 000. This excludes additional expenses that come with attending a tertiary institution such as travel, accommodation and books.

This might sound overwhelming, but you can rest assured the earlier you start saving the better. If your child is born in 2014, you need to start saving about R460 monthly to have sufficient funds by the time they start attending university.

So what if you haven’t started saving for your child’s education yet? Sinenhlanhla explains the minimum estimated premiums payable for a school-going age child. He also suggests parents speak to a financial adviser for a more accurate estimate customised to their needs.

Grade child is in now (2014)

Minimum amount you need to start saving now to have enough for tertiary education

Expected minimum amount the following year

R

R 690

R 760

1

R 740

R 815

2

R 800

R 880

3

R 870

R 960

4

R 960

R 1060

5

R 1 060

R 1 180

6

R 1 180

R 1 330

7

R 1 330

R1 500

*Assuming investment return of 10% a year before fees.

*10% investment return is for demonstration purposes and is not a guarantee.

-Koketso Mashika

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