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Saving for Education

“The only thing more expensive than education is ignorance.” Benjamin Franklin.

This month has been dominated by education-related headlines. From students sitting for national exams to the Higher Education Loans Board (HELB) pursuit for loan defaulters. Education opens up a lot of paths for us and every parent out there wants the best possible education for their children. Chances are, you may also have thought of going back to school to increase your knowledge and skills.

However, education can be an expensive endeavor. If it were cheap, most people would be in school currently. This should not stop us from pursuing further education, even to the point of accumulating debt. This is understandable as we increase the chance of increasing our future income as we learn more skills.

This begs the question, how do you finance your child’s education with minimal strain to your finances? How do you go back to school without accumulating unsustainable debt?

Plan Ahead

When it comes to your child’s education, planning is important. You have to prepare ahead of time to ensure that their secondary and tertiary education does not drive either of you to debt. The good news is that you will have time on your hands. With that in mind, you can take advantage of compound interest to grow your children’s education fund.

You should start thinking about your child’s education the moment they are born. Start an education fund for them after their first birthday, or even earlier. The rate of return of the fund should be higher than the rate of inflation to ensure the savings retain their purchasing power, so that you will not have to go back to your pocket when the funds are required.

Save Regularly

Save regularly and diligently. If you do this, chances are when your child is in secondary school, you can use the interest income from the fund to pay for their school fees or at least supplement your out of pocket contribution. When they enter a tertiary institution, you can start withdrawing from the fund to cover their fees and living expenses.

Let us run the numbers to give you a clearer picture. If you save ksh.1,000 in the Zimele Savings Plan every month for 20 years, you will have saved a total of ksh.240,000. But because the money will be earning interest compounded annually, you will end up with about ksh.643,969 if we use an average interest rate of 9%. If you save Ksh. 2,000 monthly you will end up with ksh.1,287,939 under the same assumptions. Either outcome would come in handy to help you finance your child’s education.

Financing Self Education

When it comes to financing your own further studies, you might not have the advantage of time. One of the options you will have is self-financing if you can afford it. While you may have the money to pay for your fees, it might affect other areas of your personal finance. You might not need a loan to pay fees but you could find yourself taking up a loan to fund your lifestyle. Be wary of such debt and if you find yourself in such a position, re-evaluate your lifestyle and make adjustments accordingly. Learn the principles of budgeting to guide you.

[Learn More: Building A “User-Friendly” Personal Budget]

If self-financing is not an option now, it could be in the near future if you start saving now. Cut back on your expenses or increase your income then save the surplus for your education. All you need is patience and discipline.

If you find yourself in need of debt to finance your education, opt for cheaper loans like HELB loans. Figure out whether the increased income you project the education will offer you will help you pay up the loan. Avoid personal loans with high-interest rates if you can.

Remember, the internet offers a lot of options to increase your knowledge and skills today. Some are free like Khan Academy, Alison, edX, Coursera, among others (even YouTube), but might not be accredited or certifiable.


Education is the key to success. Basic education is a necessity today and that will be true in the future. You need to give your kids the best possible education. With a little planning and discipline, you could do that. You should try to increase your knowledge and education without running into debt.


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