Giving Your Little One a Big Advantage: The Importance of Starting Early with Education Savings

There’s no feeling like imagining the limitless possibilities life has in store for your children. Whether you’re still expecting or seeing them develop during the early years, you undoubtedly want to help your child reach their full potential. Yet, those big dreams require plenty of planning long before they start their first day of school… and that’s why the earlier you start saving for their education, the better.

Why is earlier better?

“The best time to start saving for your child’s education is the day you become aware that a new life is about to come into existence. The second-best time, is today,” says Marius Pretorius, Head of Marketing Retail Savings and Income at Old Mutual.

“The inflation rate of educational costs is substantially higher than the normal inflation rate. The earlier you can start saving for their education, the better your chances of keeping up with these ever-increasing costs.”

Besides the evident impact of inflation, there are several other reasons why getting a head start on educational savings will stand you in good stead:

Compound growth. The power of compound growth can’t be overstated. When you start saving early, your money has more time to grow. This means that even small contributions made when your child is young can grow substantially by the time they're ready for higher education.
Reduced financial burden. By saving for your child's education in advance, you can help reduce or even eliminate the need for student loans. This gives them a head start in their careers without the financial stress of significant debt.
Flexibility. Saving early provides more flexibility and options when helping your child choose their educational path. Whether they decide to attend a prestigious university, pursue a vocational training programme, or explore other opportunities.
Peace of mind. Knowing that you have a dedicated fund for your child's education can provide peace of mind It allows you to focus on their academic and personal development.

Unsure where to start?

According to Pretorius, Old Mutual has created tools packed with expert guidance to help parents secure their children’s future.

Savings vs Loans calculator – to work out how starting to save for education early can eliminate future debts.
A Cost of Education calculator – to work out the cost of your child's future education.
How Much to Save calculator – to work out the monthly amount needed to reach your savings goal.
The Pay Yourself First calculator - helps you find the money in your budget that can go towards education savings.

“Every household has unique circumstances to consider – from their current financial responsibilities to their educational goals and the time they have left to reach those goals,” says Pretorius. “The best way to start planning for your child’s educational journey is with the help of a financial adviser.”

A skilled financial adviser will assess your unique situation, understand your goals, and develop a personalised plan tailored to your reality.

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Starting to save for your child's education today is crucial in securing their future success. Those big dreams deserve a little help – Click here to speak to a financial adviser https://www.oldmutual.co.za/babies-r-us-education/

Old Mutual Life Assurance Company (SA) Limited is a licensed FSP and Life Insurer.