How to help your clients save for big edu goals

The recent twitter hashtag #SalaryDepression was an apt illustration of the collective low mood many people are experiencing when it comes to money matters, as we feel financially stretched to the limits. 

 

While a recent Sanlam survey shows most South Africans do prioritise saving for education, it’s often the end goal that can seem insurmountable. This is exactly where a financial intermediary can play an invaluable role in guiding people with a plan and tools to track education savings goals.

Prioritisation is critical. So is simplification. When we’re feeling overwhelmed, most of us want clear, step-by-step directions and reassurance along the way. Kenosi Magosha, Head of Client Solutions Savings at Sanlam, says, “The survey we commissioned clearly shows South Africans know the value of education. Almost all of the respondents said they believe people will need to upskill and reskill in the future. About 9 in 10 believe their children will need more than one qualification to get ahead in tomorrow’s world of work. It can easily be overwhelming for parents as they consider how they will fund the future skilling and education for their children and possibly for themselves as well. We want the best for our children; we want them to thrive – whether working for someone else or starting their own thing. We want them to have options.”

Sometimes apathy is a symptom of being overwhelmed. Financial Intermediaries have the challenging task of cutting through this by making educational savings goals tangible and attainable for clients. Sanlam has introduced Sanlam Goal Manager to help. It enables intermediaries to assist people to set clear education goals and track their journeys to achieving these goals.

Here, Magosha outlines five steps for intermediaries to make saving for education less overwhelming, so dreams become reality:

 

1. Start with the goals.

 

Multiple reports suggest many of the jobs of tomorrow don’t yet exist. However, today’s qualifications can serve as a guide to estimate what savings your clients will need to give their children options. The Sanlam survey suggests most South Africans want their children to have a university qualification. If this is the case with your client, start with this goal, then work backwards to unpack the journey to get to university. Ask whether they want to go the public or private school route. Then advise on what’s feasible in terms of what they can afford. Sanlam Goal Manager illustrates the cost of different types of school and tertiary institution courses. This gives a good guide to today’s cost of education and what you need to save each month to prepare financially for future costs.

 

2. Simplify, simplify, simplify.

 

Set up an education goal for each child and if you would like to save for high school and tertiary set up separate goals for those as well. These separate goals will break down a larger education savings pot into individual goals which can also be seen as more achievable and helps with prioritization.

 

3. Build in flexibility.

 

Curveballs are common. Ensure that people know there’s flexibility to adjust goal amounts and monthly payment plans, should their circumstances become more favourable or unfavourable. Work through financial contingency plans to stay on track e.g. contribute extra savings when you can without changing your goal. Sanlam Goal Manager will help you see the impact on the end goal in cases where you adjust contributions towards the goal. This can help with difficult decision-making as it makes goals more tangible.

 

4. Keep an eye on the prize. 

 

A Harvard Medical School article cites a study which shows how people who regularly kept an eye on daily food intake lost nearly twice as much weight as those who didn’t. Keeping an eye of the prize – the goal – helps to keeps a goal top of mind. The same psychology applies to an education savings goal. Monitoring progress towards a goal helps people feel more invested. There’s also an aspect of reassurance – nothing is left to chance. For example, Sanlam Goal Manager has a functionality to check progress made towards a goal, and automatically sends annual updates and recommended next steps for clients to stay on track to achieve their goals e.g. monthly contribution adjustment if education inflation is very high.

 

5. Be human.

 

It sounds strange, but even in an age of robots – perhaps more so because of it – people are seeking real human connection. One of the most valuable services you can offer is an empathetic ear. Seek out what drives’ clients, their aspirations and dreams to help them set goals and keep them motivated on their journey. Look for opportunities to understand what aspect of their educational savings journeys they’re most daunted by, and help with words of reassurance, plus a plan that feels doable. Check in regularly – a simple phone call or WhatsApp message goes a long way!

 

For more information on Sanlam Goal Manager, visit Sanlam.co.za.

 

ENDS

 

 

 

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