What types of options do I have when it comes to saving for my children's university education, which is best and why?

The cost of university education continues to increase at a torrid pace, and it's essential to prepare for one of the most significant expenditures in your lifetime. With appropriate planning, disciplined savings, and thoughtful conversations with your child, you can significantly improve your chances for success in funding their higher education. So, let's explore the different types of options for saving and determine which one might be the most advantageous for your situation.

Power of Starting Early & Saving Often

Just as the case with any savings goal, the sooner you start and the more disciplined your approach to saving, the more advantageous it is for you. The power of compounding plays a crucial role, especially when you have an 18-year time horizon. To illustrate this, let's consider three different monthly savings amounts: R1,000, R500, and R250.

Savings Amount Savings Beginning at Child's Birth Savings Beginning on Child's 5th Birthday Difference in Final Account Balance
R1,000 per month R349,345.16 R219,171.86 + R130,173.30
R500 per month R174,672.58 R109,585.93 + R65,086.65
R250 per month R87,336.29 R54,792.97 + R35,543.32

Assuming a 5% annual return, you could have approximately R130,000 more in savings when the child turns 18, while only contributing an extra R60,000 by starting at birth compared to starting at age 5 (when saving R1,000 per month). This highlights the significant impact of starting to save early. Before worrying about the actual cost of education or which university your child will attend, the most crucial step you can take is to begin saving as soon as possible. The power of compounding and the advantage of time in long-term savings cannot be overstated, and starting early will greatly benefit your child's future education fund

Impact of Inflation on the Cost of Education

Just as the power of compounding can significantly impact the growth of your savings, inflation can equally influence the cost of a university education. Recent research indicates that university tuition could continue to rise at a rate of 6% to 7% + over the next several years. It's essential to be aware of the potential impact of inflation on the cost of education and to plan accordingly for the rising expenses of a university education for your child.

Balancing the cost of raising a family, saving for your own retirement and saving for your children's college education can be daunting tasks, but all of these should be considered.


In conclusion, saving for your child's university education in South Africa is a crucial and long-term financial goal. The power of compounding and the potential impact of inflation on the rising cost of university tuition emphasise the importance of starting to save early and being proactive in your approach to education funding. By taking action now, you can build a solid financial foundation and provide your child with the best opportunities for their future.

Take Action:

  1. Start Early: Begin saving for your child's university education as soon as possible. Even small contributions made early on can make a significant difference in the long run.
  2. Explore Tax-Efficient Options: Look into tax-efficient savings vehicles.
  3. Set Clear Savings Goals: Determine how much you need to save for your child's university education and set clear savings goals to track your progress.
  4. Consistency is Key: Be disciplined in your savings approach. Consistent contributions over time will help your savings grow and benefit from the power of compounding.
  5. Seek Professional Advice: Consult with SA Financial Planners, we specialise in education planning and we can create a personalised savings strategy tailored to your specific needs and circumstances.

By taking these steps and planning ahead, you can ensure that your child's dreams of attending university are within reach, and you can provide them with the best possible start in their academic journey. Remember, the sooner you start and the more committed you are to saving, the brighter your child's future will be. Take action now and secure their path to a successful university education.

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