If education is expensive then try ignorance…’ goes a famous age-long maxim.
Expensive as it maybe, education cannot be substituted for ignorance or illiteracy if meaningful development is to be attained.
I further wish to reiterate that there is no dignity in illiteracy with its poverty connotation.
As Nelson Mandela said ‘”Education is the most powerful weapon which you can use to change the world…”
Following last week’s article a number of readers requested me to write a practical approach to the subject of alleviating school fees hurdles through education policies.
Well, I tried to work out some humble budgets for various levels of education starting from preschool, primary, secondary and tertiary education levels.
The expenses from these various levels can be analyzed from either the private or public (or government) schools. From my simple though unconcluded research I couldn’t find any government preschools.
The question then is at what level should we start saving for our children’s school fees using insurance companies taking five years as the minimum period for such a policy? If we have to start from preschool level then we have to either commence saving way before we
get married or atleast delay the first child by about two years!
Whether this is realistic is not the subject of discussion today but the point is that we must plan ahead of our children’s school fees.
From my experience paying for lower levels of education is not as challenging as higher levels such as secondary school or college/university, especially if we explore the private schools root.
Therefore, my practical guide in our cultural context is to start saving for the first child by the time they are two or three years.
After this period, I believe as couples will have settled down from the wedding financial stresses.
Going by my proposal one may save say K200 per month for five years.
This translates to about K12, 000 at the end of five years and when you add interest it may come to say K14, 000 or more (just as an example).
By the time the policy is maturing, the child will be about seven or eight years. At this point, one will have a chance to evaluate the performance of the policy in relation to other competing options such as via banks or other forms of investment.
If the insurance root proves the best and one can afford to pay for their child’s primary school fees from regular income then one may buy another five-year policy which will mature when the child is about 13 or 14 years old.
By this time, this money will have doubled if not trebbled.
This means one will have then saved enough money to pay for their child’s school fees pressure free.
While the child is pursuing their secondary school, one may consider buying another five year term policy contributing say between K500 to K1, 000 per month hoping by this time one will have become more affluent.
By the end of those five years the savings plus interest will hit about K70, 000.
This is sufficient money to pay school fees at university.
The illustration may appear simplified of how these education policies work but it is not far from the reality ceteris paribus (all things being equal) as the economist would say. There will always be variances or the unexpected but moving with a plan in place is far much better than hoping for things to happen somehow!
I believe in our time and age we must plan to make things happen rather than passively hope for the best.
One other point of emphasis is on the mode of paying the premiums.
Like I stated last week, paying cash to an insurer is an option one should least use.
It is very tempting to use money for some ‘emergencies’ and hope to replace later on.
To avoid this temptation it is better to arrange for deductions to be made from payroll or having a DDAC system or a standing order so that before you get the cash it goes to the intended savings.
By so doing you can realise proper financial planning and discipline.
Comments: webster@picz.co.zm or webster_tj@hotmail.com or on face book search for Insurance Talk-Zambia page or call/text 0977 857 055
(The Author is a Chartered Insurer with more than ten years industry experience)