Stay ahead of the class on fees and school extras

Education is a key financial priority for many South Africans, but families often underestimate the costs putting their budgets and other financial priorities at risk.

It is not only the way that school fees increase but also all the extras that parents are expected to pay - from tablets to extra-murals, educational trips and academic support - that make budgeting and planning tricky.

When it comes to which school to send your child to, there are many choices, BDO Wealth financial planner Craig Lawrence explains. “Families may consider fee-paying public schools, former Model C schools, private schools or online options.”

Fee-paying government schools can cost around R24 000 a year for primary school and R36 000 for high school.

BDO says former Model C school fees range from about R40 000 to R95 000 a year.

Private day schools are far more expensive, averaging between R66 000 and over R100 000per year, while some boarding schools charge more than R200 000 annually, with top schools costing close to R400 000 a year.

Online schooling has fees that range from R5 500 to R90 000 a year, excluding the costs of examinations. Online schooling avoids additional costs, such as transport, uniforms and extramural activities.

Consider how this will escalate

Whichever path you choose, be aware that tuition costs will rise annually by more than the inflation rate for the entire period your children are at school – longer than 12 years if pre-schooling is included and in families with children of different ages.

Lawrence says education costs have been rising at about seven to eight percent a year over the past few years.

Data from the Reserve Bank and StatsSA show that education fees have increased 2.6 percentage points more than inflation every year for the past decade except in 2021. If the trend continues and your salary increases by inflation only, it means education costs will take an increasing portion of your income each year.

“Over twelve years, schooling becomes one of the largest expenses most families will ever face,” Lawrence says. “What catches many parents off guard is not the annual fee, but the cumulative impact when that cost hasn’t been planned for.”

Understanding the true cost of schooling

Parents spend at least 10 percent of their income on school fees every month according to a 2024 Wonga Consumer Survey, but this often does not include the extra costs.

“Tuition is just one part of the total cost. Families also need to budget for uniforms, sports kits, books, stationery, transport, electronics, school trips, the list goes on,” explains Thato Mahapa, provincial general manager at Old Mutual Personal Finance.

Without planning for this, families may budget or even save for school fees consistently but still fall short of future needs, she says.

Start before school

With above-inflation school fees and additional school-related costs, many parents struggle to save for tertiary education costs. You can make life easier by starting to save before your children even start school.

Lawrence says a family who starts saving R2 000 a month from the birth of a child in an investment dedicated for education expenses, could, assuming a moderate long-term investment return of seven percent a year, grow the investment to approximately R179 400 over six years.

When schooling begins, the parents can draw from this reserve to reduce pressure on their monthly income and avoid scuppering other financial goals such as saving for retirement.

“The maths doesn’t need to be complex to be powerful,” Lawrence explains. “Starting earlier allows families to spread the cost over time, reduce pressure at key transition points and protect the rest of their financial plan.”

An education savings plan should take into account your time frame, affordability and how comfortable you are with investment risk. This can guide you on financial decisions about the school to choose for your children and the activities in which they can partake through the course of their schooling.

Mahapa says families have unique circumstances, making it important to match the right financial plan and savings products to your education goals, whether you plan to make regular contributions or ad hoc savings, whether you need tax-free growth and/or whether you can take more risk for higher long-term returns.

Practical ways to cope

Another practical way to manage costs is to build a full-year education budget at the start of each school year. List all expected expenses and estimate when they will occur. Then divide the total into manageable monthly savings targets.

This makes large payments easier to handle and reduces the need to turn to informal lenders, instant cash offers or multiple small loans that end up costing more over time, Momentum’s consumer financial education teachings suggest.

Parents often feel under pressure to fund extracurricular activities which are not included in the school fees. While sport, music and cultural programs offer valuable life skills, remember that not every activity is essential.

“Parents should prioritise activities that align with their child’s genuine interests and long-term development,” a UK-based psychologist with Amplify, Dr Juspreet Dhanoa, wrote in an article for Investec. She also warns against overindulging children’s every want as they may then underappreciate things of value.

Boundaries around spending and explanations on why these are in place help children to learn about financial decision-making, she adds.  

Make kids aware

Parents should conscientise their children about the importance of sticking with activities that involve additional costs and taking care of their stationery, uniform and other items.

Cost-saving strategies can also make a meaningful difference over time: buy quality second-hand uniforms and textbooks, compare prices before purchasing stationery or devices, share transport with other parents and prepare lunches at home instead of relying on tuck shop purchases.

“These small but consistent savings can add up over time,” Mahapa says.

1Life Insurance’s Back-to-School Survey found 37 percent of respondents compare prices when shopping for stationery and other school essentials, 21 percent reuse supplies from the previous year, 17 percent use their bonuses to cover back-to-school costs and 15 percent stock up on school supplies gradually throughout the year to manage the back-to-school financial shocks.

The bottom line

Sending children to school comes with costs that many families feel deeply, Hayley Parry, Money Coach and Facilitator at 1Life’s Truth About Money, commented in the Back-to-School survey.

It’s important for parents and caregivers to plan their money carefully throughout the year. Understand your household expenses, know what is truly affordable and ask for financial support where it is available. That way you can avoid unnecessary debt and stress, she said.

Careful budgeting, smart spending and early long-term planning can help your finances withstand the reality of rising education costs. And your children will still thrive.