Most people are quite naturally unaware of the rising costs of education in this country. Interesting and perhaps worrying as well is the that historically education inflation out paces normal inflation. Education inflation is roughly on a historical average 9% per annum. This also means that education inflation out paces salary increases per annum as well.
The General Household Survey conducted last year produced data that shows that people between the ages of 7 – 24 years of age are attending educational institutions. Comparative data leads us to find that at least 40 – 45 percent of these households have not or did not save for their children’s education at some point.
Worrisome cost projections of what schooling will cost us in 2027
- 5 years of Public High School – R436 000
- 5 years of Private High School – R1 743 000
- 3 years of University – R643 000
This is dependant on the level and type of schools attended*
Only 40% of parents on average are actively saving for their children’s education
Comparison in education costs from 2014 to 2033:
At the moment the average cost of education in 2014 is between R 23 000 – R 42 000 per annum which is dependant on the level and type of school attended. Move ahead to 2033 and we find that education will cost between R 118 600 – R 215 500 per annum. Starting to save now is becoming a critical concern in the country.
“Roughly a realistic expectation of fees from Grade R this year through to University will be between R 950 800 to R 2.2 Million” – Fin24
Practical savings projections to think about:
- R460 pm is the average for university should you start saving now
- R870 pm if your child is already 10 years old.
These also have to be boosted by 9% per annum as per education inflation*
Interesting data points from the OM Savings and Investment Monitor:
The OM Savings and Investment Monitor collected data from 1000 metropolitan households across South Africa: Johannesburg, Durban, Cape Town, Port Elizabeth, East London and Bloemfontein. The facts produced showed that on average 50% of SA parents are not saving for their child s education.
“Ideally saving for education should begin BEFORE the child is even born. Any couple married or otherwise that plans on having children should begin to save now.” – Bianca Engelbrecht @Amberwealth Creations
Attached Infograph to graphically explain the impact of education of your wallet:
They say that you cant put a price on education but you most certainly can plan it! If you would like to find out what the best forms of education investment vehicles are for your kids then please inbox myself or Bianca. You can visit our website and follow our LinkedIn company page.