Enhance Your Earnings Potential Through Studying

Learning Changes Earning Power

Your education is the single most important investment that you will ever make. A good education will accelerate your career and increase your lifelong earnings potential, as well as shape your future.

Even if you have been working for a long time – it is imperative that you upgrade your skills and invest in getting ahead.

Every year there are millions of people entering the job market and the only way for companies to differentiate on whom to employ is by the education choices that people have made. That is why solid and stable degrees such as the BBA and MBA are very popular as they signify that a person is interested in business and management.

The art of financing your studies is often the biggest hurdle to overcome. This article will show some basic financing strategies that will help you in to make your study monies work for you.

The parents

If you are lucky, your parents started saving for your studies. Full or partial policies or other savings schemes are common sources of funding and they offer a valuable head start to people who would otherwise have struggled to find the funds to study. The reality for most of us is that parents are not the main source of funding. It is your life and you cannot blame your parents if they cannot assist. It is important to discuss your studies and find out if they can make a contribution, and if they can – how this will work for them.

If you are a parent of young children or are considering starting a family, think about the future and how you will fund your children ’s education in a couple of years.

The salary

The next major source of funding is your own salary. It is quite common for studies to represent 20% of your salary for your first or postgraduate degree.

The salary can be used for monthly payments for institutions such as the institution that offer monthly payments, or alternatively to service a loan for studies.

To service a loan you may want to look at serving it as interest only while you are studying and then as your situation improves, to start serving more of the principal.

Company Funding

Another strategy is to build a case to your existing employer to show them how your learning will contribute to the organisation’s future. In this way, you may be considered for full- or part-time studies, in line with your company bursary policy.

There are various avenues that companies have to assist with the education of staff. These include the following:

Allocation of standard bursary funds for deserving staff;

Claims against skills levies;

Capability Is the Real Asset

Investment in education as part of the standard learning and development strategy of the organisation.

The new BEE codes promotes investment in staff and it is important for you to understand what your company is doing to make studies accessible to staff.

The key to securing corporate-financed education is bringing your employer to the realisation that they need to enable people to be better at their existing jobs to ensure the success of the company as a whole.

Some companies also have student loan schemes that allow you to borrow the money to study and pay it back as a salary deduction or partial scholarship.

It is important to make HR your ally in securing your studies and to make your manager aware of your study ambitions so that it becomes part of your personal development plans.

Student Loans

All major banks offer student loans. In South Africa, student loans are available to both South Africans and to non-South Africans with valid study permits. Bank loans also specifically cover studies at a private institution.

When applying for a bank loan, you will have to show proof of registration at an educational institution. You will also need somebody, such as a parent or guardian, to sign surety for you.

Although you will only need to start repaying your bank loan once you have completed your studies, you will need to keep up the interest payments throughout the term of the loan, depending on the loan conditions.

If you save for a year, you may possibly be able to secure an interest-only loan and then reach a point where you can fund interest payments for your studies, while working hard to secure a higher-level job. You may also want to work with your parents or other individuals to assist you with securing the interest during your studies, while you retain responsibility for the repayments after your studies are complete.

Bursaries

Many South African companies as well as government departments offer bursaries to promising students.

The terms of these bursaries vary tremendously. Contract bursaries require you to “pay back” the bursary by working at the company once you have completed your degree – giving you a job and work experience immediately after your graduation. Many mining and engineering companies, in particular, provide contract bursaries. Some companies have waived the guarantee

If you search the web for Bursary Register South Africa you will find a couple of sources of bursaries.

Scholarships

Similar to bursaries, scholarships are non-repayable forms of financial assistance. Whereas bursaries are awarded according to both financial need and academic merit, scholarships are awarded based on actual academic achievement.

Study With Application in Mind

The government, provinces, municipalities, individual schools and some businesses and charitable foundations also provide grants, bursaries and scholarships.

You have to apply for these annually and there is only a small number that usually get awarded.

Free Education

Free education offers a way for you to learn and to pay when you can afford. The idea here is that you can signup for the institution Free education and get the knowledge of your qualification at no charge. When you are ready to study you can “pay-as-you go” through doing individual modules or specific areas of your studies through short courses.

Saving for Education

Saving for education may sound far fetched but there is a formula for those that want to pursue this path: Save 10% of your money after taxes and deductions but before necessary expenses and charities.

Some recommended instruments are a savings account at your financial institution, governmental retail bonds or other investment products as advised by a financial advisor. This should give you some return on investment.

If you are serious about investments you can also contact the institution Investments that can give you advise on this.

In this way, after a year, you should have the capital to invest in a skills course that can assist you with upgrading your career. As you progress following this philosophy, you will be able to finance the next stages of your education going forward.

Education inflation

It is important to consider that education costs increase annually, with educational inflation estimated by some to be between 10% and 30% annually in real terms. So, the earlier you start educating yourself, the more you can earn. At the same time, you will be saving on the future cost of education.

Conclusion

Education is critical to helping you earn more. While there is no guarantee that furthering your education will improve your standard of living, not studying further is almost a guarantee of financial stagnation.

As the education system is improving organisations are pushing the benchmark for employment to people that have suitable qualifications and they are spending less on employing people that do not have the requisite skills in entering the workplace. It is your responsibility to build your own earnings potential through enhancing your skills.