R90 000. That’s the estimation of how much a child will cost you each year if you’re a middle-income family. Without inflation or growth, this equates to a staggering R2 million by the time they’re 23 . Two million! And that’s just for one.
And let’s talk education. Research shows that education inflation increases annually by 8% to 9%, which is about 3% higher than consumer price inflation. Based on that percentage, if, let’s say, you pay R30 000 for a year in school fees, in five years’ time you’ll be paying just over R44 000. Five years after that, you’ll be paying almost R65 000. And that’s before stationery and uniforms. For the amount I’ve spent on uniform this year alone, I could have bought myself all the nice boots and clothes from Woolworths. Country Road or Trenery, in fact.
But wait, there’s more: it is estimated that three years of university education could cost around R350 000 for tuition, books, accommodation, and board examinations and tools such as laptops and tablets).
This is bleak, and I’m always so nervous to approach future financial planning and security, because this usually involves saving and discipline, of which I have very little. For the most part, savings and discipline for me means not buying shoes this month so that I can save for a new handbag next month.
Savings might be a weak point, but one thing I’ll never not do is ensure my life is insured. I took up a policy when I started freelancing a few years ago, and even when I started working fulltime again, I still kept my policy.
Gals, you probably know this, but having a husband or partner who has life insurance is not enough. You need to be covered too, no matter what you’re earning (in fact, it has nothing to do with this). If you become sick, disabled or even die you need to know that there is cover to take care of your children and their education. Life insurance will give you the peace of mind, knowing that they’ll be taken care of, and that your partner won’t carry the entire burden.
You’re probably concerned that getting life insurance is invasive and admin-heavy. It can be – a few years ago when I signed up after I left my job and got a divorce, I had medical questionnaires, and did a blood test too.
Nowadays, there are easier ways, and the new insurtech startups (ie small insurance companies who are using tech to “rewrite” insurance as we know it) are giving us more options and innovations. Hero Life for example is one such insurtech company, started by three very smart guys. Hero Life is underwritten by a large financial and insurance company MMI, so they’re legitimate (I’d be a bit nervous to go with a one-man-show not affiliated to a bigger company).
Hero Life is specifically designed with young parents in mind. You can get covered online – you just need to answer four qualifying questions and your cover is activated instantly after your first successful payment.
You can choose your own cover amount based on your needs and what you can afford – you won’t be pushed into getting something beyond your means (I once had a pushy financial advisor who did just that, and put the fear of everything in me).
Here’s what your package could look like, or you could just choose your own cover.
Expert support is available and there are no costly overheads or penalties, and most importantly, you only pay for the cover you need.
Life cover is an excellent way to get on top of your long-term financial goals and to look after your family, and this is just a quicker and more affordable way of doing it.