Welcome to another week of financial learning. In today’s article, we will learn how parents should prepare financially for their wards’ education.

The great man Nelson Mandela said, “Education is the most powerful weapon which you can use to change the world”.

Education is only one thing that can remove corruption, unemployment, and environmental problems. Education is not about doing a degree it is about how you can live with your own feet.

Education is both formal and informal. Classroom education is generally deemed as formal education. Whatever we learn and imbibe during our lifespan is informal education.

Informal education starts with a parent at home.

They are the first influence when a child is born and they should inculcate or impart good values, morals, and ethics in their child from the very beginning.

Parents need to develop good habits in their children about respecting elders and supporting them in their old age.

The second form has to do with classroom learning.

The only tool of life that bridges the gap between the poor and the rich is formal education.

According to Vijay Sharma, education empowers minds that will be able to conceive good thoughts and ideas. An assertion I strongly agree!

He adds that education also enables students to do the analysis while making life decisions.

The introduction above points to the fact that education is a necessity towards personal, family and national development.

Education, however, is not “free” in our part of the world.

The government pays for teachers’ salaries and buildings, but schools need extra money to pay for basics such as water, electricity, and pencils.

Parents still incur expenses on school uniforms, books, mattresses, food to mention few. The heaviest educational burden is felt at the higher educational level i.e. Tertiary education.

The perception of quality education at the basic and junior high-level forces most middle-income parents to choose more furnished private schools that come with exorbitant fees.

The inability to pay fees and other education expenses in these private basic schools keeps many children out of school.

A similar scenario is found among many students after completing their Senior High-level education.

Some students due to family financial constraints have to stay at home for a year or two.

Recent data collected in eight countries as part of the nationally-representative Financial Inclusion Insights (FII) surveys provide new insights into the subject of school dropouts.

Michelle Kaffenberger and Lauren Braniff presented this report in their article “Paying for School: 6 Insights for Better Financial Services”

According to FII, a whopping 84% of households with school-aged children have, at some point, lacked the funds to pay either part or all of schooling costs in Uganda.

In Kenya, 75% have.

Even in Bangladesh and India, where the percentages are smaller, 20% of households with school-aged children have struggled to pay for school.

The report also showed that a large portion of families sends their children to schools that require tuition payments.

More than half of households with enrolled children pay fees to send their children to school in six of the eight countries included in the survey.

The report according to Kaffenberger and Braniff also said that even at “free” schools, however, families face many other costs to keep their children in school.

In Kenya, for example, students in “free” public schools may be required to buy uniforms, pay examination fees and in some cases even provide their own desk and chair.

In Uganda, government capitation grants (the funding given to public schools to cover each enrolled student) are insufficient to cover all students and are dispersed inconsistently, leading schools to charge parents extra fees (sometimes unpredictably) to bridge the gap.

With the above survey report presented, it brings to mind the futuristic approach of preventing financial burdens with education.

An excerpt from the FII reports showed that paying school fees is a higher priority for many parents than saving, investing in a business, buying goods or property or any number of other financial goals a person might have.

Expenses related to education just like building a house, marriage, traveling to mention a few demands careful financial planning.

This article is to bring a lot more awareness of this subject matter.

We need to start planning for the school fees of our wards even before they are born.

You need to know the exact school you want your ward to attend.

That information will help in planning for their fees from early childhood to higher education.

We can plan many ways towards our ward’s education.


Many insurance companies in Ghana and Africa have educational policies that help in solving this educational dilemma.

Most of these schemes range from 5 years upwards. Let me take a practical example so we appreciate the concept.

Mr. Ofori has given birth to his son this year 2019 and intends to enroll him in an international school that charges a termly fee of GHS 2,000 in Class 1.

Mr. Ofori’s son per estimation will be 6 years at the time of enrolling in class 1.

Mr. Ofori with a financial plan can sign onto a 5 years educational policy for his son.

The total cost of his son’s basic education from class 1 to 6 all things being equal will be GHS 36,000 without taking into consideration other costs like school fees, examination fees, etc.

This amount is huge if he looks at his financial status now.

However, he can sign up for the educational policy, which will cushion Mr. Ofori in five years.

I will, therefore, advise Mr. Ofori to sign up for a monthly subscription of GHS 500 with any reputable insurance company for the next 5 years.

That will generate a principal of GHS 30,000 at the end of the period and an interest, which will be more than enough money, needed for his son’s education.

Mr. Ofori would not need to pay the full basic education fees and can even invest the amount with a quarterly interest payment. This is smart financial planning.

Besides the comfort this would offer, it also serves, as an insurance policy should anything happen to the parents.


Besides the educational policy, one can also commit to a periodic savings plan with any financial institution.

Again, most banks have flexible investment schemes that serve this purpose.

Do not procrastinate this move.

Your child’s education is more important than the house you are building for him or her.

We all have to ensure that there is no barrier to education for our children.

Your children are your future legacy and not the house you built or a number of degrees you attained!

I would encourage the government to do more by improving the quality of education at the basic level through continuous incentives for the teacher and infrastructural development.

However, the bus still stops with the parent!

I would like to end today’s article with a thought-provoking quote by A. P. J. Abdul Kalam.

He said, “Let us sacrifice our today so that our children can have a better tomorrow”.

I wish everyone a wonderful and memorable week!


NB: Article image from worldbestinfo

Patrick Baah is a chartered banker with over 5 years experience in main stream banking having worked in various capacities. He is currently at the Branch Manager Position of his institution. He has been a qualified member of the Chartered Institute of Bankers, Ghana with a good membership standing since the year 2013. He also holds EMBA and BA from Kwame Nkrumah University of Science, Technology, and the University of Ghana respectively. Patrick is the originator of the daily epistle dubbed “Savings Tip of the Day” which has been running for over a year on WhatsApp and Facebook. Patrick has also been teaching on the Topics Savings, Investment and Financial Independence for over 2 years and a research fellow for ILAPI Ghana. He runs a financial channel on Youtube by name “Patrick TV Gh” and has appeared a couple of times on the business segment of TV3 News 360. Patrick is into youth facilitation and counselling. I can be contacted via baasco2006@gmail.com and or 0243984492.


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