Why you need to save for education! Part 1 | Articles

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10 Sep

Why you need to save for education! Part 1

I have a colleague, young and full of dreams.
Recently, while hanging out with friends, she pointed out her fascination with Harvard University, and how she’d love to take her kids to study there.

Everyone said it was a pipe dream, but she was adamant and stood her ground.

According to her proper planning was the key. “A scholarship does not have to be the only way! “she said.

So, it got me thinking.

How many of us went to good schools because our parents could afford it? Alternatively, how many of us had to settle for an ‘affordable’ school.

How did this make you feel?

Did it make you feel unplanned for, and is that a feeling you would like your child to grow up with?

Food for thought.

Sure you will say the economy is at its worst, but you know it’s never going to change.

I attended a money management class recently, and the speaker had interesting pointers on education policies.

Let me point out the most interesting piece of that discussion, for you to think about
  • a). School fees in a Kenyan private school is roughly ksh.60,000 per term.
  • b) An academic year has 3 terms. So in a year, the fees amounts to ksh 180,000.
  • c) Primary and secondary covers 12 years multiply by ksh 180,000 and that totals up to Kshs. 2.16 million

If you save 2.16 million for education fees you ought to have covered for your child’s fees from primary to secondary. Simple math right?

I’ll tell you why, Inflation rates!

When you factor in an inflation rate of let’s say 4.5% in ten years, that will be the equivalent of Kshs. 3, 354, 400. Which is roughly 3.4 million.
Remember you had saved ksh 2.16 million. So you have a deficit of 1.24 million to make it 3.4 million!

Unfortunately, you don’t have that cash, and it’s not because you didn’t plan for it! You thought you saved enough earlier.

Let that sink in.

After you have processed this, catch up with me on part two where we discuss how and what you can do better.


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