Financial planning for education costs

As parents plan for the start of the first school term this year, many are faced with paying for unexpected items, in addition to fees and uniforms.

Hybrid learning – a combination of in-person and online learning – requires investment in an up-to-date computer (desktop or laptop) or a mobile device such as a smartphone or tablet. Speakers, headphones or earbuds are also needed to boost audio quality, while a webcam supports activities that require video feedback. A stable internet connection and sufficient data add to the costs.

If your child experiences a growth spurt, extra uniforms could be required. Moms and dads may also be under pressure to invest in extra tuition as learners struggle to catch up with disrupted studies. Children may also experience anxiety and mental health issues which could necessitate the services of a counsellor or psychologist.

If conditions revert to relative normalcy, parents will have to factor in the costs of social events and school trips once again.

According to Stats SA, education fees increased by 4.1% in 2021, compared to 6.4% in 2020. Primary and secondary school fees increased by 2.5% and 4.3% respectively in 2021 (compared with 7.3% and 7.6%  in 2020).

While many parents will have enjoyed a temporary reprieve, as 2021 annual increases were the lowest in 30 years, education remains extremely expensive. Add the unexpected costs, and parents could battle to keep up.

Shafeeka Anthony, Marketing Manager of, a handy online source of personal finance articles, advises reviewing your budget, or drawing one up if you do not yet have one. Establish what is most valuable to you, such as your child’s education and paying off debt, and direct your spending to those items. Go through your bank statements and look for opportunities to reduce or eliminate spending.

Anthony also advises building up an emergency savings fund to act as a buffer. If you are already paying off debt, then building up savings will require meticulous management. Rather save less than create more debt.

  • Read a JustMoney article on whether you can save while still paying off debt.

It makes sense to have more than one income stream, given the risk of losing your job in the current economic climate. Known as a “side hustle”, this is usually done in the evenings or weekends. It is your responsibility to declare this income to SARS, and to ensure you save sufficient funds to pay additional tax. Store evidence of all expenses incurred in the production of your freelance or contracting income.

  • Find out more about tax pertaining to your side hustle.

Other tips for saving on school expenses include:

Buy second-hand items: Check out uniforms and sports equipment at your school shop and online sites.

Scholarships: If your child is a high achiever in sport or academically, enquire about bursaries and scholarships.

Life insurance: Should you be disabled or suffer from a debilitating illness, or even die, your child’s education would be badly affected. Consider a life insurance or education protection policy, as well as dread disease and disability cover. These will ensure continuity of your child’s education if you are no longer able to provide the finances.

“It’s never too soon to start saving for your child’s education. Even a small amount put away every month will grow over time, as compound interest plays its part,” says Anthony.

Education savings policies are offered by most financial services providers. Another option is unit trusts, which offer simple and cost-effective access to the share market through a variety of equities. Tax-free savings accounts are also worth considering. The investment is opened in the name of your child and any interest, dividends or capital gains will be free of tax. It also gives you flexibility as you do not have to commit to making future contributions.

“Do your homework and evaluate your options to determine what best suits your family’s financial needs. If you need guidance to ensure your child’s educational expenses are covered, it’s worthwhile enlisting the help of a trusted financial advisor,” says Anthony.

“If you have been fortunate enough to have received a year-end bonus, or expect a tax refund, consider allocating this windfall to your child’s education.”

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