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26 May, 2015 - 11:43 AM GMT

Start now to give your kids the best start

Everyone wants the best for their children. Providing a good education is a huge part of preparing them for their best possible future. But as education becomes more expensive, planning and budgeting for these costs becomes essential.

If you’re planning to send your kids to a private school, you’re probably already juggling a mortgage, ongoing household expenses and the day-to-day costs of raising children such as sports and other activities. It’s not easy to save extra while still maintaining these expenses of daily living.

In the video below, Simone and Steven have decided to speak with an adviser to see if they could be doing something more to make sure they have the money to pay for their kids’ education. Perhaps a more structured savings plan or investment would help.

Here are some steps to help you get on the right track to fund your kids’ education.

  1. Start now. The sooner you start saving the better. Consider a regular investment plan to take advantage of compounding interest.
  2. Make sure your insurances are adequate and up-to-date. Think about income protection, life insurance and cover for extended illness.
  3. Pay as much as you can afford into your mortgage with an offset/withdraw facility. This will help reduce the interest and then have the option to redraw to pay for school fees.
  4. Work out how much you need to put aside. The table below shows a rough guide to the costs of primary and secondary education per child. These figures represent the upper ranges that parents can reasonably expect to pay, although fees vary across states, ages and schools.

 

Primary

Secondary

Government Primary School: $500 - $3,000

Government Secondary School: $1,000 - $4,500

Systemic Primary School: $3,800 - $6,800

Systemic Secondary School: $9,400 - $13,100

Private Primary School: $10,800+

Private Secondary School: $19,000+

Source: http://www.asg.com.au/assets/files/asg_edcosts_schoolcosts_2015_nat_metro.pdf >>> add video

  1. Make the most of gifting. For grandparents and those wanting to give something special, a savings account could be a great way to give a new baby something that will grow with them. 
  2. Pre-pay education expenses - if you already have children at school, check if the school allows you to pre-pay fees at a discounted rate. If you are able to pay upfront, it may help reduce the worry about rising costs into the future.

Take a moment to make sure you're on the right track. If you need help, talk to a financial adviser.

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