Tips to grow savings for 2020 school fees

24/10/2019

Planning for 2020 now – school fee deposits

School fees carry a big price tag. The total average increases for South African school fees in 2019 for public and private schools was 8.2% and 7.8% respectively.

It is clear that school fees are climbing, which makes it imperative that parents plan thoroughly for their kids’ education by bulking up their savings accounts.

The school fees are just the start. Throw in extra-mural activities, school excursions, and everything in between, and the price of a good education starts to seem overwhelming. As a parent to a 4 year-old myself, I know this all too well.

Here are some tips to give you a head start for your 2020 school fees deposit:

  • Include it in your budget

Instead of waiting for a cash-windfall that might never come, the best way to raise money for your kids’ school fees is to include it as an extra expense in your budget every month. If, for example, your goal is to pay the first quarter’s fee in January, start by putting the money away in a savings account where you can earn some interest.

With a MyWORLD account, you can create a Savings Pocket that is linked to your normal bank account. This Savings Pocket boasts SA’s best rate of 6.5% p/a on any positive balance.

  • Tax refund

The tax season is in full swing and will run until 31 October 2019. If, like many South Africans, you wait until the last day to get your tax return done, perhaps the motivation to complete your tax return earlier this year could be to get a tax refund — a welcome boost when it comes to funding your kid’s school fees.

If you file your taxes early and get a tax refund, you can transfer that money into a tax free savings account now and earn interest until next year, therefore making your money work for you!

  • Year-end bonus

Year-end bonuses feel great because you’ve worked hard all year and now you are getting rewarded for your efforts. Usually this means we spend it in a hurry, treating ourselves to holidays or entertainment with family. Then comes January and back-to-school shopping trips and, too often, that end-of-year bonus ends in regret.

Play it smart this year. Hold back some of your bonus to pay for your kids’ school fees. The best way to do it is either to pay the funds over to the school before the December festivities begin, or deposit the money in a savings account that will earn interest over time.

  • Ask for a monetary gift as a birthday present to close friends

 

As I mentioned earlier, I am a parent myself. I have been thinking about the different birthday gifts my son has received over the years. While I have greatly appreciated each and every gift, for his next birthday, I will be asking my close family and friends to gift him with money instead of toys. And to not make anyone feel uncomfortable, I will be setting the ‘limit’ of this gift to R300 to save people from the predicament of guessing “how much” they should deposit into our MyWORLD Savings Pocket. The Savings Pocket has its own account number, and you can name it as you wish, so you know exactly what the funds for.

Would you, as a parent be open to this?

The most important aspect to remember when saving for your kids’ school fees is to save the funds in an easily accessible account — one that is safe from the temptation of reckless spending, while also earning you some interest. African Banks’ MyWORLD account is perfect for this, giving you the unique ability to bank with your loved ones through shared banking, while enjoying South Africa’s lowest banking fees.

Schools often offer parents the flexibility to pay school fees either monthly, quarterly, at intervals of six months or yearly. The bigger the lump sum, the more discounted the fees become, although the discount may vary. Some schools offer as much as 10% off, while others offer about 6%. So, if you can plan ahead and pay a big chunk towards your kids’ school fees, it will not only save you money in the long run, but will provide you with the peace of mind in knowing that your kids’ fees are taken care of.

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Our mission is to be a successful Retail Bank offering a wide range of products and services to the consumers of South Africa. The people who work for African Bank represent the diverse population of South Africa; therefore we are a reflection of you, of all South Africans. We seek to provide value - more than our consumers expect of us. We promise to live our purpose 'humanity through banking' in all that we do and we are confident that we can, because 'We are You'.