Education is a vital investment in your child’s future, but it can also be a significant financial burden for those who are unprepared.
One study shows that although a large majority of Australian parents believe that education plays a significant role in their child’s future prospects, less than half of them are prepared financially.
Based on the data presented in the study, depending on their location and type of school (government, Catholic or independent), parents can expect to shell out anywhere between $68,597 (Queensland regional and remote, government) and $357,931 (Sydney, independent) over 13 years.
With education in Australia becoming increasingly expensive, saving early and considering your options to help manage these costs is important. Here are some tips to kick-start your savings and make education more affordable for your family.
1. Estimate your child’s educational expenses.
It’s crucial to do some research to come up with a rough estimate of how much you will need to save based on your child’s age and the school you plan to send them to. Be sure to consider other costs like childcare fees and debts you might be paying off concurrently.
2. Make a budget and save.
Start saving as early as possible. Decide how much you can afford to put aside each week or month after setting up a budget. Consider increasing the amount you’ll save each year to account for inflation. You can set up a direct debit from your account into a high-interest savings account or make lump-sum contributions a few times a year.
3. Pay off debt ASAP.
Paying off your mortgage as quickly as possible is a good strategy to save on interest and free up cash for school fees. To do this, you need a mortgage with a redraw facility or offset account. Be disciplined and avoid using the money for other expenses.
4. Consider investing.
Investments like insurance bonds, managed funds, and shares can also be a way to set money aside for your child’s education. However, make sure you consider investment flexibility, costs, and timeframe. If you’re new to investing, it’s best to seek financial or tax advice.
5. Practise money-saving tips with your children.
There are simple, doable ways to make education more affordable for your family. Doing these things can also help prepare your kids for future financial responsibilities.
- Discuss money with your kids and emphasise the difference between needs and wants.
- Consider sending your child to a public primary school if you plan to send them to a private high school.
- Walk your kids to school instead of driving them, or apply for a concession card for public transport use.
- Compare prices before buying school supplies, laptops and devices.
- Buy school shoes during sales and consider trainers as an option if the school allows for their use.
- Prepare homemade meals and snacks. This will require you to plan weekly and to be creative. However, it will also ensure your kids have access to nutritious food.
Education is a significant expense for families, but with careful planning and budgeting, you can make it more affordable.
Start saving early, consider your options, and use money-saving tips to help manage costs.
If this article has inspired you to think about your own unique situation and, more importantly, what you and your family are going through right now, please contact your advice professional.
This information does not take into account the objectives, financial situation or needs of any person.
Before making a decision, you should consider whether it is appropriate in light of your particular objectives, financial situation or needs.