As the sun sets on the festive season, school is due to start in just a few weeks time, and parents are scrambling what is left of their finances for back to school supplies.
Financial Education at Old Mutual head, John Mayike says that a common mistake among parents during the festive period is that they don't think long term when saving for their children’s education. He adds that as a result of this, they suffer financial constraints when schools reopen.
Saving for children’s education requires the same mindset as saving for retirement. You don’t plan for retirement two years before you go into retirement. And that’s why parents always needs to plan ahead.
He says that parents should have saved throughout the 2021 school year, instead of taking up debt in order to meet their school stationery needs. Mayike further states that it is not too late for parents to start now for 2023 if they’ve missed out on saving for this year. This is because inflation on education-related expenses currently stands at 9%.
In the short term, however, the financial education expert recommends that parents who are low on cash should consider reselling some of the things that they no need.
He also emphasizes that parents should learn from their current experiences and consult a financial least open a unit trust or a tax-free savings account.
