Every parent knows how having a child can change you; that little bundle completely changes your priorities and outlook on life – nothing is more important, more precious, or more loved than your child. But oh my goodness, are they expensive?!
According to the experts, the average costs of raising a child is estimated at about R1 000 000 before they even start grade one – that’s six zeroes for a six year old. Furthermore, research indicates that education inflation increases annually by 8% to 9%, which is about 3% higher than consumer price inflation. So, a savings or investment product selected towards your childs’ education should aim to outperform inflation by more than 3% over a medium to long term period.
It is estimated that three years of university education will currently cost R300 000 to R350 000 for tuition, books, accommodation, and board examinations and other expenses such as a computer, cell phone and internet access. I bet you didn’t even realise you make that much money. Well, if you have a child, you don’t have that much money anymore. But if you had to start configuring a budget, you’ll note that, excluding inflation, your child costs you approximately R90 000 every year. Admittedly, that cost has to take lifestyle factors into consideration, but it’s a barebones figure, it doesn’t include vacations, birthday parties, or private schools. It begs the questions, what provisions have you made for your delightful little rug rat’s education? More importantly, what happens if you’re no longer there to foot these bills?
Thankfully, you have options. Take Liberty’s Educator Benefit programme for instance – if you’re insured with the life-agency, you can adopt a policy that will cover expenses for primary school, high school, and even take your pick of Ivy League universities across the globe. The Progressive Educator policy even affords you monies to pay for textbooks and boarding, not just tuition.
That’s just one perspective though, I’d like to know if you have anything to add, particularly around the costs of education and how you’ve gone about maximising your back to school budget year on year.
You can find out more about Liberty’s Educator Benefit on www.liberty.co.za, or you can ask your financial adviser as soon as you’re done reading this, they’ll be able to tell you more about it.