We all want to give our children the very best start in life, and this starts with a great education. While South Africa has plenty of no-fee schools, these often run out of money before the year is out as their funding isn’t adequate. This is why it’s important to prioritize paying for your child’s education – to ensure they receive a good one. Simply put, it’s never too soon to start saving for your child’s education and here are five ways to create a reliable education plan.

Figure out the cost of school fees

Public schools are state controlled while private schools are funded by tuition fees, thus private schools cost more but will have better facilities. (A state school will cost around R8 000 to R20 000 per year whereas a private school could charge from R30 000 and up.) The one you choose will come down to affordability, but either way, planning well starts with knowing the cost.

Get savvy about “education plans”

Many financial institutions boast an “education plan” which is why many consumers think it’s a separate investment product, like a retirement annuity. However, there is no special savings product with its own set of rules or tax legislation. This means you have to become savvy about which particular investment options exist that could best help you reach your goal.

Carefully consider your investment options

As we’ve said, the same options exist for any type of long-term savings goal, not just your child’s education, so consider them wisely. One is a tax-free savings account that would allow you to earn interest on the amount you put aside without having to pay tax when you withdraw it. Just bear in mind that you can’t invest more than R36 000 per year. You could also consider investing in unit trusts. These aren’t tax-free but there is no limit to what you can invest.  

Speak to a financial advisor

The investment products we’ve mentioned are not your only options. There are many ways to save smartly. If you’re still unsure of the best way to make the most of your savings – or even how much you’d have to save each month to reach your goal – consider meeting with a financial advisor. They can help you plan according to what will work with your finances and help you set realistic targets.

Protect your investment with life insurance

What would happen if you weren’t around to save up for those fees? Fortunately, this is where life insurance can act as a financial safety net. At MiWayLife, it works like this: You’ll pay a monthly premium and, in the event of your passing, your insurer will pay out a lump sum amount of your choosing to your beneficiary. There are no conditions as to how this money should be used. This way, your family will have the financial means to pay for school fees as well as any related costs. Better yet, your cover amount will grow 5% each year to ensure you keep up with inflation.

Creating an education plan for your children can feel daunting but if you start saving early and make informed decisions it can be done – and MiWayLife can help you protect that precious investment.

Did You Know:

You can now take out life cover with us online in a few simple steps. No calls and no agents! Make sure to take care of those you love today by buying MiWayLife cover online.