So, how do you go about saving up for this expense, and further tertiary education if your child’s future plans require university or college studies? There are various options available to the South African consumer. These include:
Saving account at your bank: A standalone 30-day savings account at your existing bank is a good, convenient place to start. However, the interest you’ll get will not be inflation-related and there are better ways to let your money work for you.
Unit trusts: Unit trusts offer many benefits if you require flexibility and early access to your money. It’s a little more involved to set up, but definitely worth it in the long run.
Investment policies: The benefit of an education policy is that you have a more structured savings plan, but you’ll have limited access to the funds during the first half of the term. It also has the added advantages of value in the full term, access to leading asset managers, benefits for your child on your death or disability and access to funds that offer guarantees on your savings.
As you can tell, there are various pros and cons associated with each of these savings options. In the end, it all depends on your savings goals and education plan for your individual child or children. If you’re struggling to make sense of all your options, it might be a good idea to discuss your options with a financial advisor – most banks will make one available to you upon request.
These you have it – some helpful information to get you on the right track to start saving for your child’s education in 2020. Keep an eye on the blog in coming weeks and months as we share more helpful advice on making wise decisions where your finances are concerned. In the meantime, feel free to reach out to a Libertine Consultants representative to learn more about our debt services and credit services.