The cost of putting your child through school has increased by 70% over the past 10 years, so the sooner you start saving, the better.
Our guide explains:
We also share some tips for grandparents who may be thinking of providing financial support to their grandchildren.
It’s projected that parents of children born this year will have to pay from $60,000 for a public school up to $400,000 for a private school education from preschool to final year.
By the time the latest addition to your family sits final school exams, their last year at a metropolitan private school could cost $50,000. And just when you’ve finished paying for high school, you may have to get out your wallet for the next stage of their education – university.
The key factors to look at when selecting your savings strategy are performance, risk and tax rates. You’ll also need to decide whether you want to save for secondary or tertiary education.
First of all look at your situation:
Next to the investments listed, a family trust may be an option if you have a large sum available. While you need specialist financial advice and there are administration costs, a family trust can help you to legitimately distribute investment income and take advantage of lower marginal tax rates for certain members of the family.
Some employers may also allow you to salary package school fees (fringe benefit tax may apply). This is where the employer pays the school fees upfront and then deducts regular amounts from your gross income to recover the cost - it’s effectively a fee-and interest-free loan that lowers your taxable income.