School fees are the most predictable large bill in a Nigerian home. You know the school. You know the term dates. You know the amount, or close to it. Yet every September, January, and April, many parents act as if the bill fell from the sky.
The problem is not the size of the fee. The problem is timing. Income arrives monthly. Fees arrive three times a year, in one lump. If you do not bridge that gap on purpose, it gets bridged for you, usually by raiding savings, selling something at a bad price, or delaying payment and paying a late penalty.
“The idea is simple. Take the yearly cost, divide by twelve, and move that amount out of your account the day salary lands. When the term starts, the money is already there.”
What is a sinking fund?
A sinking fund is money you set aside every month for a known bill on a known date. It is not savings for a rainy day. It is a savings for a day you can already see on the calendar.
The idea is simple. Take the yearly cost, divide by twelve, and move that amount out of your account the day salary lands. When the term starts, the money is already there.
Do the arithmetic first.
Say you have two children in a private primary school. Tuition is ₦450,000 per child per term. That is ₦900,000 a term, or ₦2.7 million a year. Now add what the invoice does not show. Uniforms, books, levies, the excursion, the end-of- year party, the PTA contribution, transport. In many homes, these extras add 20 to 30 percent. Call it ₦600,000 a year. The real cost is ₦3.3 million a year. Divided by twelve, that is ₦275,000 a month.
That number may hurt. Good. It is better to see it in November than to discover it on resumption day. If ₦275,000 a month does not fit your budget, you have learned something important: the school may be too expensive for your current income. That is a hard sentence, but it is arithmetic.
Plan for the increase.
Fees do not stand still. Schools face the same inflation you face: diesel, salaries for teachers, food for boarding students, imported books. Many schools review fees every year, and a 15- 25 percent rise is not unusual in recent years. So do not plan for this year’s fee. Plan for next year. If the fee is ₦450,000 today, budget for at least ₦520,000 per term next session. Ask the school when the next review happens. Many will tell you if you ask in writing.
Also watch the transition years. Moving from primary to secondary, or from day to boarding, can double the bill in one step. Those jumps are known years in advance. Put them on paper now.
Where to keep the school money
The school fees fund has a deadline, so it needs to be safe and accessible by then.
The goal is not to chase the highest return. The goal is that ₦900,000 is there in full in the second week of January. Shares can be down the week you need them. Land cannot pay a bursar.
For money due within a few months, a separate savings account or a money market fund is a sensible home. A money market fund invests in short-term instruments like Treasury bills and pays a yield close to them, and most let you withdraw within a few working days. Check the fund’s withdrawal timeline before the term, not during it.
For fees due a year or more away, a Treasury bill that matures before resumption can work because you know the maturity date. Match the maturity to the fee date. Do not buy a 364-day bill for fees due in four months. Keep this money in a separate account with its own name. Money that sits with your spending money gets spent.
Negotiate the payment, not just the price
Many schools offer a discount for paying the full session upfront, often 5 to 10 percent. If you have built the fund early, that discount is a return you can see. On ₦2.7 million, a 5 percent discount is ₦135,000. Few safe investments pay that in a year.
Some schools also allow instalments within the term. That helps cash flow, but read the terms. Some charge more for the convenience. Ask for the total cost under each option, then compare.
What about the dollar school?
Some parents pay fees in dollars or at a dollar-linked rate, especially for international schools or children studying abroad. Here, the risk isn’t only inflation. It is the exchange rate. If the fee is in dollars, save in dollars, or at least price your monthly set-aside at a realistic future rate, not today’s. A parent who saved naira for a dollar fee in 2023 learned this the hard way when the naira moved. The fee did not change. The naira cost did.
Make it automatic.
Willpower is not a plan. Set a standing order to move the monthly amount to the school fees account on payday. Treat it like rent. It leaves before you see it. If your income is irregular, as with traders, consultants and freelancers, set the target per term and move a fixed share of every receipt, say 20 percent, until the term target is met.
In closing
School fees are a fixed cost with a known date. Price the full year, add the extras, add the increase, divide by twelve, and move it on payday into a separate home that will be there on resumption day.
The bill is not the shock. The lump is. Spread the lump, and the shock goes away- education only.
Kalu A. Aja is a Certified Financial Education Instructor and an astute professional with over 27 years of experience spanning capital market operations, treasury, investment, asset management, and occupational pension services. Do follow on X: @FinPlanKaluAja1
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