Wananchi Opinion: Take time to save for your child

Education remains one of the most important investments a parent can make in their child’s future.

 In Kenya, where education is highly valued as a path to opportunity and financial independence, parents constantly strive to provide the best learning experiences possible.

However, the current economic environment, characterised by rising inflation, a weakening shilling, high interest rates, and an increased cost of living, has made it more difficult for families to meet these educational expenses.

Despite these challenges, there are smart and practical ways Kenyan parents can save and prepare for their children’s education without sinking into financial distress.

To begin with, early planning and goal setting form the foundation of successful education saving. Parents should start saving for education as soon as a child is born or even earlier if possible.

Creating a clear financial plan helps parents determine how much they need, the time frame available, and the best saving or investment options to meet the goal.

For instance, estimating the cost of primary, secondary, and university education allows parents to break down the total amount into manageable monthly or annual savings targets. By starting early, parents can take advantage of the power of compounding, where small consistent contributions grow significantly over time.

Secondly, embracing education insurance policies can offer a reliable and disciplined saving method.

Many insurance companies in Kenya, such as Jubilee, Britam, and ICEA Lion, offer education plans that allow parents to save regularly over a set period, with guaranteed benefits when the child reaches a certain age.

These policies not only help accumulate funds but also provide a safety net in case of the parent’s death or disability. In such events, the insurance company continues paying the premiums or pays out the sum assured, ensuring that the child’s education remains uninterrupted. This form of structured saving builds financial discipline and provides peace of mind.

Another effective strategy is investing in unit trusts or money market funds. Unlike traditional savings accounts, which offer low returns, money market funds in Kenya currently yield interest rates of between 10 and 15 percent annually, depending on the provider.

Reputable money market funds provide flexible investment options where parents can deposit small amounts regularly and withdraw when needed. The advantage of money market funds is their liquidity and higher returns compared to bank savings.

Over time, these investments can accumulate enough to cover school fees, books, and other education-related expenses.

Additionally, parents can consider joining Savings and Credit Cooperative Societies (SACCOs). SACCOs are deeply rooted in Kenyan culture and have proven to be reliable financial partners for many families.

By saving consistently in a SACCO, parents not only earn attractive dividends but also gain access to affordable credit. SACCO loans can be used to pay school fees at lower interest rates than commercial bank loans. Moreover, being part of a SACCO encourages a culture of saving and financial responsibility within families.

For parents with irregular income, such as small business owners or casual workers, automating savings can make a big difference. Setting up standing orders from M-Pesa or bank accounts ensures that a specific amount is transferred automatically into a savings or investment account each month.

 Automation removes the temptation to spend the money elsewhere and builds consistency over time. Even modest contributions can grow significantly when made regularly and invested wisely.

Equally important is cutting unnecessary expenses and prioritising education savings. Many families spend money on nonessential luxuries such as frequent dining out, entertainment, or unplanned purchases. By adopting a budget and sticking to it, parents can redirect these funds into education savings.

Financial discipline is essential; knowing the difference between wants and needs can make the difference between struggling with school fees and achieving financial stability.

Parents should also involve their children in financial discussions about education. Teaching children about money, budgeting, and the value of education helps them develop responsibility and appreciation for the sacrifices being made. When children understand the importance of saving and spending wisely, they are more likely to take their education seriously and adopt good financial habits in the future.

Kenyan parents can secure their children’s educational future despite financial challenges. The key lies in starting early, saving consistently, and making informed financial decisions. Education is indeed the best gift a parent can give to a child, and with the right strategy, it is a dream every family can achieve.