Question:
What is the best way to save for my child?s education?

Answer:
Education is the greatest gift a parent can offer their child. The biggest stumbling block to higher learning, however, is lack of funds.

Plan for success

Smart households budget every month and know the state of their finances. Budgeting is a form of financial planning which guides spending in a responsible manner so that all the financial obligations are met. If your budget reflects a surplus, put some of that money aside for education each month. If you cannot do so you need to reduce your spending on luxuries as you can do without them.

Once you can afford to save a little each month, or if you have a lump sum, visit a reputable financial institution and speak to a consultant about your goals and the investment options available to you. Note that with most investments there is always an element of risk involved ? some high, some low ? which means that you may not get out what you originally put in, but there is another far safer option.

Opening a savings account

Visit some banks and enquire about a savings account. Find out as much as you can about all the banks? savings products because the interest rates and monthly administration fees vary a lot. Start to save as early as possible to ensure that you accumulate as much funding as possible.

Personal loans

Credit is an attractive option, but be careful. Remember that if you can afford the repayments you will pay interest and finance charges on the loan amount so you are in fact paying more than if you had used your savings. If you must use credit choose a registered credit provider so that you have some protection against unfair or illegal lending practices. Registered credit providers comply with the National Credit Act (NCA) which aims to regulate the industry and protect consumers. Shop around for the best interest rate, initiation and monthly administration fee.