Want to make the best long-term financial decisions for your family? It’s all in the details. Make sure to save on those everyday life stage expenses and you’ll be well on your way to financial independence.
Here are a few smart places to start:
Aim to pay less tax
Everyone can earn up to around R73 600 without paying tax. Working flexi-time means you can earn roughly R6 000 per month tax free while spending more time with your kids. If working too many hours puts you in a higher tax bracket, cut back to bring your earnings down, so you pay less tax.
Get good medical aid cover
Young families are in the highest claim categories, so get the best cover you can afford. Hospital cover is a must, but so is a scheme with good day-to-day benefits. Find out if you’re covered for immunisations, which can cost from R5 500 in the first year alone.
Reconsider school fees
Private pre-school fees have rocketed, so check what you’re getting for your money. Many pre-primary schools now use outside companies to provide everything from music lessons to ball sports, while others will require you to contribute art materials and snacks. Before you sign up, make sure you know what extra costs you’ll have to foot.
Help older kids get a loan
Student loans are some of the best you can get. Encourage them to take out tuition-fee and maintenance loans as repayments are spread over a number of years at a very low rate of interest, plus inflation. Consider covering the interest-repayment part each month while they’re studying so they have less debt after graduation.
Work and study from home
If your kids are happy to work and study from home, it’s a big save on accommodation and travel. But they might miss out on some of the student experience.
Have them earn while they learn
With holiday part-time work they can earn up to R73 600 tax-free. If tax is deducted and they’re below the tax-paying threshold, make sure they reclaim it from SARS.
Keep credit in check
Standing surety so they can get a student credit card with low monthly fees and up to 55 days interest-free credit will allow them to build a healthy credit record and teach them to manage money responsibly – but keep tabs to make sure they don’t overspend.
Save as early as you can
Set money aside as early as possible for your children’s tertiary education. Invest in growth-orientated trusts, which give you exposure to a range of companies listed on the stock market. If your annual household income is less than R180 000, try the Fundisa Fund at the ASISA, an educational savings account that invests in unit trusts and pays out a yearly bonus as a reward for saving for education.