The festive season can present a lot of added financial challenges for business owners. Being organised and having a plan in place is key to avoiding the pitfalls that can
As every parent knows, a quality education is one of the most important foundations you can provide for your child. But the costs of schooling can really add up over the years – and it’s not just fees; there are plenty of other extras you’ll need to cover as well. And of course, if you have more than one child, then all the expenses will be multiplied. So how much can you expect to shell out for each child’s education – and are there ways to plan ahead so you can reduce the strain on your household finances?
The cost of a child’s schooling in Australia varies widely between metropolitan and regional areas, and depends on whether you opt for a private or public education. But even if you send your child to a government school, there are still plenty of expenses that you’ll need to be ready for – like uniforms, books, supplies and after-school activities. In a major capital like Melbourne or Sydney, the cost to educate a child born in 2018 from preschool to Year 12 could cost anywhere from around $72,000 to almost $550,000. That means a family with two children attending private school could end up spending well above $1 million for their kids’ primary and secondary education. And while cites like Adelaide and Perth are substantially cheaper, the projected costs still range from around $55,000 up to more than $400,000.(1)
As with any investment, you should plan carefully for your child’s education. Everyone’s circumstances and choices are different, so take the time to research and calculate how much you’re likely to be paid over the course of your child’s school years. That way you can start budgeting as soon as possible. If you’re lucky, you might have parents who are willing to chip in for their grandchildren’s education – but if not, don’t worry. Here are three things you can do now to cover your family’s education costs without sacrificing your lifestyle.
By putting aside a little bit of money on a regular basis, you can grow your savings so you’ll have money to put towards your child’s schooling. A simple way to do this is to set up an automatic transfer from your everyday account into a highinterest savings account. Once you get started, you’ll notice the interest compounding over time. As you get into the habit of saving, you’ll find it becomes easier to manage your short term expenses like school fees and uniforms.
While a savings plan is great, it’s important to know that education costs may rise faster than inflation. This means your cash savings might not grow enough over time to meet your child’s future education costs, and you might want to consider non-cash investments as well. By investing part of your savings in an investment bond or managed fund, you may find it easier to cover education costs over the longer term, based on the anticipated growth and earnings from these investments. So it’s worth speaking to your adviser about the best investment vehicle for your situation.
It can be tough keeping up with school fees and other costs when you still have a major financial burden hanging over you. That’s why it’s a good idea to prioritise paying off as much as your home loan as possible before you child starts school, so you’re in a better financial position to manage their ongoing education costs when the time comes. Even if your child is already in school, it’s never too late for your adviser to help you get your finances on track and plan for the remainder of their education.
1 Australian Scholarships Group, ASG Planning for Education Index, 2018
Important information
This document contains general advice. It does not take account of your objectives, financial situation or needs. You should consider talking to a Financial Adviser before making a financial decision. This document has been prepared by Count Financial Limited ABN 19 001 974 625, AFSL 227232, (Count) a wholly-owned, non-guaranteed subsidiary of Commonwealth Bank of Australia ABN 48 123 123 124. ‘Count’ and Count Wealth Accountants® are trading names of Count. Count Financial Advisers are authorised representatives of Count. Information in this document is based on current regulatory requirements and laws, as at 30 January 2018, which may be subject to change. While care has been taken in the preparation of this document, no liability is accepted by Count, its related entities, agents and employees for any loss arising from reliance on this document.