Four things to consider when saving for your children’s education
Four things to consider when saving for your children’s education
When I was growing up my parents used to encourage me to set my sights on one of the big five careers; Doctor, Dentist, Lawyer, Teacher or an Accountant. Your options were limited and your path set at an early age.
Fast forward 30 years and consider how you’re reading this post. On the internet, probably on a cellphone – social media didn’t exist 15 years ago, and it spawned an entire new industry in the last decade.
The point is – we’re preparing our children for jobs that don’t even exist yet. And their best tool will undoubtedly be a good education.
Below are a few ways that you can start planning today in order to ensure their success tomorrow.
If you only start saving when your child starts Grade 1, it’s already too late!
We know you’ve heard this plenty of times, however it can’t be repeated enough! The earlier you start saving for their education the smaller the impact is on your budget. Depending on the institutions’ fees (best your little one not end up at Julliard, because then you’ve got problems) and future education inflation, a new parent needs to save at least R800 per month, preferably more, to confidently cover the total cost of a High School Education at a good school. If you only start saving when your child starts Grade 1, you’ll need to put aside almost two and a half times as much every month from then on.
Education inflation is real…
Education costs have historically risen by between 9% and 10% each year. Therefore it is possible that the increase in school fees will be more than your salary increase each year. Your first goal should therefore be to save so that you can make up this difference without education taking a bigger bite out of your household finances.
Funding the grade gap
Your second goal is to fill the gap between high school and primary school fees, as you will be paying around 20% more once your child starts high school. In fact, even primary school fees often increase with each grade, over and above the normal annual inflationary increases.
As soon as your child starts Grade One, immediately increase your savings by the difference between primary and high school fees. You will then be setting aside a realistic percentage of your salary for your child’s 12 years of education and the savings will supplement the annual fee increases in high school.
Protecting the future
When planning for your child’s education; you should also consider an insurance policy to fund any shortfall should the worst happen to you (touch wood it doesn’t) before you’ve put enough aside.
TAX TIPS FOR 2018
The 28th of February marks the end of the financial year. All information up to this date will be included in your 2017/18 tax return, including all tax deductions. So, make sure you have your paperwork up to date. This also takes the stress out of finding these documents when the time comes to file your return.
1. Top-up your retirement annuity
You can invest up to 27,5% of your income (to a maximum of R350 000) tax-free into a retirement fund. This is a great way to reduce your tax burden, while securing your retirement. So use this opportunity to calculate how much more you can top-up your retirement fund to maximise this benefit.
2. Use your R33 000 tax-free savings advantage
You are allowed to save up to R33 000 each tax year into a tax-free savings account. Maximise this benefit by paying a lump sum into your tax-free savings account this month. Consider setting up a debit order to bolster your savings for the rest of the year.
3. Write down your odometer reading
If you claim business travel you need to be keeping a log book. Make a note of your odometer reading and finalise your log book, which you’ll need to submit with your tax return later in the year. It’s also a good idea to make a commitment to constantly keep your travel logs up to date for the rest of the year.
4. File your expenses
If you have expenses that you are able to claim as tax deductions, including medical expenses, make sure you have filed these or request statements and proof of payment. If you are claiming medical expenses that are not reflected on your medical scheme statement, SARS will require proof of payment and will want to check that you are not double claiming through your medical scheme. Ideally, you should try to put all medical expenses through your scheme, even if they don’t pay, as it provides a single record for SARS.
5. Assess your capital gains tax
If you’re planning on selling assets such as shares or unit trusts, you can spread the tax burden over two financial years and benefit from the R40 000 tax exemption per tax year by phasing the sale over two months.
If at any point you are concerned about your tax affairs, speak to your financial adviser so that you can get your tax affairs in order before the financial year end.
Design Indaba unveils the Arch for the Arch in Cape Town
Cape Town: When the mayor of Cape Town, Patricia de Lille asked Design Indaba CEO, Ravi Naidoo for help with a monument to honour human rights activist, the Archbishop Desmond Tutu, we looked to the name he is affectionately known by; “The Arch”; for inspiration.
Archbishop Tutu is a bold beacon of strength and pride not only for South Africans but for many around the world.
It is these qualities that we want to celebrate with the Arch for the Arch monument that will tower over the walkway that connects Parliament, St George’s Cathedral, the Slave Lodge as well as the Company’s Garden.
With Design Indaba as commissioner, and financial services group Liberty as the sponsor, we asked award-winning architects Snohetta and Thomas Chapman of Local Studio, to develop The Arch for the Arch.
We are proud to announce that after months of careful craftmanship, design ingenuity and engineering, the memorial is ready to be unveiled to the public.
It will be unveiled on October 07, 2017 coinciding with Archbishop Tutu’s 86th birthday.
Sydney Mbhele, Chief Marketing Officer at Liberty Group, says: “In celebrating 21 years of the South African Constitution, Liberty is proud to be part of honouring Archbishop Tutu as one of the leading activists for our democracy. The Arch is a symbolic memento of what we as a country have achieved, while serving as a reminder to each citizen in the country about upholding the values and spirit of the Constitution.”
Mbhele affirms, “Advocating for freedom, a principle enshrined in the Constitution, is something we at Liberty are passionate about. In our 60th year, we continue to pursue our purpose of enabling financial freedom and changing people’s realities.”
The physical structure of the arch consists of 14 individual arched beams of wood, which together form a dome.
The choice of material was due to its high durability and resistance against rot and fungus, making it ideal for use in outdoor construction.
A multidisciplinary architectural endeavour, the 14 pillars of the arch will serve to symbolise the fourteen chapters of the South African Constitution.
Our Constitution is considered to be one of the most progressive in the world and similarly to how an arch relies on a keystone to avoid collapse, so too do South African freedoms rely on the Constitution.
It’s a fitting tribute to Archbishop Tutu, a global human rights activist and the man who coined the term, the ‘Rainbow Nation’.