Save for my kids’ education — how much a month?

How we calculate it

• The cost grows at education inflation until the year you need it: today’s cost × (1 + inflation) for each year. A lump sum at the start of study, not spread over the years of study.
• The monthly saving is the amount that, with what you already have, grows to that cost at your return after fees. Saved at the end of each month; what you already have sits in the same kind of account.
• Tax-free savings account (TFSA): no tax on interest, dividends or growth, so the saving needed is the lowest.
• Normal taxable account — a deliberately simple model: we treat the return as 30% interest, 20% dividends and 50% growth in price. Each tax year, interest above R23 800 is taxed at your marginal rate and dividends lose 20%; when you cash it all in, 40% of the gain above the R50 000 annual exclusion is added to your income.
• TFSA limits are per person: R46 000 a tax year and R500 000 in a lifetime. A TFSA opened in your child’s name uses the child’s own limits — so every Rand you put in for them is room they cannot use later. We flag it when the plan needs more than one person’s TFSA.
• Rand as spent, not today’s money; returns and inflation are assumptions, not promises.

Where the typical figures come from

• TFSA limits R46 000 a year (from 1 March 2026, up from R36 000) and R500 000 lifetime, with a 40% penalty on excess. SARS, Tax-free investments.
• Interest exemption R23 800 (under 65) and capital gains annual exclusion R50 000 (up from R40 000) for 2026/27. SARS, Budget 2026 FAQ.
• Capital gains: 40% inclusion rate for individuals, taxed at your marginal rate. SARS, Capital Gains Tax. Dividends tax: 20%, withheld before you are paid. SARS, Dividends Tax.
• Our estimates, not sourced: the 7.5% education inflation (school and university fees have tended to rise faster than CPI), the 9% return (as in our other tools), the 31% tax bracket and the interest / dividend / growth split. Use your own.

Left out: other interest you earn (it shares the R23 800 exemption), foreign dividends, spreading the withdrawal over the years of study (which would use the capital gains exclusion more than once and lower the tax), fees beyond the return you enter, and whose name the account is in for tax (income on money you give your child can be taxed in your hands). Saving for more than one child: run it once per child. See also the tax-free savings account comparison. Calculations, not advice.