Saving for Education

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srothman

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So with the arrival of the offspring, I'm looking at more formal ways of saving towards his education. Up to now, we've been putting away what we can each month into a little slush fund more towards getting all the baby stuff sorted out, but I'm looking for some advice on how best to save for education.

I was thinking of taking out an additional unit trust and just dumping money in there each month, but not sure if there are other benefits of doing it differently, using a product specifically for this?

Any advice will be very welcome.
 
srothman said:
So with the arrival of the offspring, I'm looking at more formal ways of saving towards his education. Up to now, we've been putting away what we can each month into a little slush fund more towards getting all the baby stuff sorted out, but I'm looking for some advice on how best to save for education.



I was thinking of taking out an additional unit trust and just dumping money in there each month, but not sure if there are other benefits of doing it differently, using a product specifically for this?



Any advice will be very welcome.
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I used to save in a unit trust but decided to convert it to a Tax Free Investment Account for my son's education. I don't need it for myself as I gave sufficient RAs and a pension fund. Was looking at how best to use the TFSA and this was my option. He is 5 and should have a tiny fortune when he needs to go to university.
 
We are buying an investment property next year. The plan is to use the rental to fund the kids education as needed. My uncle did this and it worked well.

My kids can then use the property to get a foot into the door when they are ready to buy.

Current ages 4 and 8.
 
@srothman you are going to find so many expenses with kids when giving them opportunities that its important to always have a couple of K you can quickly access.

Education does not start when they are 18, it starts the day they are born. Both my kids go to ordinary (good) schools but we send them to Kumon classes and it helps. Thats nearly an R1K a month. We spend > R3K a month on the kids for eductaion:

Grade 1 Model C school: R1100
Pre-school: R1000
Kumon: R1000

Now we still have the Karate which helps my son with concentration (either that or Ritalin), so add another R500 a month. My daughter will start soon so that will bring it to R1K.

No regrets but these are the expenses.

I'm also sponsoring a Grade 8 pupil now with her stationery and sundry expenses. Spent R2K alone on her stationery and text books and the school gives her most of her books.

Its expensive but worth it when it comes to education.
 
Yeah that's very true. We're still funding then other expenses on the side, specifically those extras we can't yet anticipate, but this is specifically for schooling/uni fees.
 
My advice would be to open a tax free savings account for each child. Make sure you go for the lowest fees, and an all equity account. You can put away up to R2500 for each child (and for yourself if you're not already doing it).
 
I have a 10 month old girl, I opened a TFSA with easyequities in her name. I have SATRIX40, RMBMID, DBXWORLD and PROP10, 4 simple well diversified ETF's.

Ask family to rather donate money to her education than silly toys for Christmas and birthdays.
 
tuyler said:
I have a 10 month old girl, I opened a TFSA with easyequities in her name. I have SATRIX40, RMBMID, DBXWORLD and PROP10, 4 simple well diversified ETF's.

Ask family to rather donate money to her education than silly toys for Christmas and birthdays.
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We get family to donate money or Ackermans gift vouchers. The money also goes straight into the clothing account. Sounds silly but hey, its also an expense. Frees up money for other things.

Also planning a savings account with 3 months school fees in it for just in case. You never know. Last year I nearly ended without a job after ending up in hospital two weeks before I started a new job and was booked off till for that time. Was a close call.
 
Clothing is definitely an expense. I was referring more to toys you get that literally breaks within a day or two.
 
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