To help parents, parents-to-be and caregivers to school-going children on their investment journey, Allan Gray has launched a free, email-based investor education series focusing on saving and budgeting for the rising costs of education.
“Our research indicates that many investors intuitively understand that it is a good idea to save towards the escalating costs of education, yet the figures are so intimidating that they often land up giving up before having started,” says Ray Mhere, regional manager at Allan Gray and a parent grappling with this challenge.
He adds that the Allan Gray Saving for Education Series will help parents budget and invest for their children with confidence.
“It will not only help caregivers get started and remain committed, but also make clear decisions and equip them to ask the right questions of their independent financial adviser.”
The series looks at topics such as whether you should pay for fees from your salary, how to save for your child’s education and the options available to late savers, amongst others.
According to Statistics South Africa, education inflation (the rate at which the cost of education increases each year) has averaged 10% over the past 15 years – that’s 4% higher than general inflation.
In addition, a report by Discovery Life shows that educating your child from preschool to tertiary in the private school system can cost as much as R2.5 million per child. While public schooling is more affordable, it is not necessarily cheap, with school fees in the large metropolitan areas averaging R40 000 a year.
The report also found that expenses such as uniforms, laptops and tablets (if the school uses digital learning), school trips and sports equipment can also increase expenses by as much as 50%.
“This means that education costs are increasing at a faster pace than our salaries. Over time it will become increasingly difficult to keep up with the rising costs of education, unless careful planning is included in every parent’s budgeting mix,” says Mhere.
To sign up to the free series, visit https://www.allangray.co.za/saving-for-education/. Investors will receive the five-part series in a once-per-week email.