Ways to Start Saving for your Child’s Future

Overview

Saving for your child’s future should be a priority if you are concerned about the financial wellbeing of your children in the increasingly tough economy. The best thing you can do towards this end is start today. Avoid putting it off any longer.

Saving for your child’s future generally means that you need to consider the rising costs of education every year. In South Africa, education inflation is higher than the country’s Consumer Price Index (CPI).

The 2016 Old Mutual Savings and Investment Monitor revealed that 54% of urban South African parents are still not actively saving for their children’s education. This shows how dire the situation really is. This can be changed however.

As a parent interested in saving for your child’s future, it can be helpful to ask a financial advisor to assist you with a financial plan.

It’s also important to consider a number of additional costs as well, such as those that come with maintaining investment accounts etc.

You need to do your homework. Keep in mind that one degree may no longer be enough for your child to get a decent job. The employment market has become highly competitive, so you’ll want to invest in your child’s future by giving them an edge on everyone else.

It’s important to be smart about saving and that you aren’t overwhelmed by the costs.

For instance, a tax free savings account may be a good vehicle to use. This account lets you access your funds at any time and you don’t pay tax on the growth of your investment. Unit trusts are also an option, as they allow you to add lump sums to your investments, without incurring penalties.

It’s important to be clear about how your child will access the various investments you may have set aside in future. Saving for your child’s future is a sure way of ensuring that they are financially stable in future, even if you aren’t around. It can also help to insulate you from the effects of rising costs.