One of our readers recently wrote to us asking what percentage of one’s salary should cater for kids’ school fees.Quick research shows there's not much data out there about budgeting for your kid's fees, mainly because school fees aren't part of monthly expenditure. In Kenya for, instance, a school term has approximately 3 months, meaning it’s an expense which you only incur once every four months, assuming a one month holiday.

Having said that, this doesn’t mean parents shouldn’t budget for their kids’ education. It’s evident that schools and the basic kid’s school expenditures are very high. By expenditures, I mean uniforms, school stationary, boarding fees and to and fro transport costs, just to mention a few. Having noted this, you probably see the importance of budgeting for your kids expenses. The question is, how?

I view school fees as though it’s a short time saving commitment I have to meet every three months. The idea is to identify a budgeting system that lets you save adequately for that short term saving commitment, i.e. your kids’ school fees.

There are different budgeting plans to that can help you achieve this. There is:

• The balanced money formula where you get to save 20% of your monthly income
• The 60% solution where 10% of your income goes to short term saving goals, 10% caters for long term saving goals and another 10% caters for retirement.
• The budgeting plan where 10% goes to savings.

Each of the above budgeting plans will obligate you to sacrifice a particular expense for the sake of another. The 60 percent solution, for instance, is tailored, for those who’s main objective is to minimize on expenditure and maximize on savings, while the budgeting plan is suitable for those who would rather spend as opposed to saving.

Based on how much you can save over duration of three months will determine how much you can afford for your kid’s education.

Let’s see how much you afford as school fees using three of the above budgeting plan:

The balanced money formula

20 percent of your monthly income goes to savings. If you earn KES 40,000 per month, KES 8,000 will go to your savings. You can choose to have your entire monthly savings going to your kids education or you can choose to split the amount among other saving goals.

If the entire amount goes to school fees, after three months you will KES 24,000 dedicated to your kids school fees.  Based on the number of children you have you can choose how much you will spend on each child.

The 60% solution

10 percent of your income caters for your short term saving goals. You can assume that is saving for your kids’ education. If you earn KES 40,000 per month, you should save KES 4,000 every month. After 3 months you should have saved KES 12,000. Based on the number of children you have you can choose how much you will spend on each child.

The good thing about this budgeting plan is you will not only focus on saving for your kids’ education, but you will also save for your retirement and long term saving goals.

The budgeting plan

The main focus here is maximizing on spending and minimizing on savings. 10 percent of your income caters for savings, this means, if you earn KES 40,000, you will save KES 4,000 every month. You are under the discretion of deciding if the entre savings amount will cater for your kids’ education or you will split the among your other savings goals.

If the entire amount goes to your kids’ education, you have KES 12,000 after three months to cater for your kids’ education. Based on the number of children you have you can choose how much you will spend on each child.

Simply put, your income, how much are able to save every three months and the number of kids you have will determine how much you can spend on your kids’ school fees.