In Australia today, education is a hot topic. Independent and Catholic schools are becoming popular choices for more and more families.
Of course, every child is different, and the type of schooling that will help them thrive can depend on a number of factors. Regardless, it’s important to prepare early and factor it into your financial planning, as it can have far-reaching impacts, from where you live to your everyday financial decisions.
Understanding the true costs
Money isn’t the only factor at play when deciding where to educate your children, but it is a critical one. Those opting for the public system often assume it is entirely free, but that doesn’t take into account all the associated expenses.
The latest Cost of Education Index from Futurity Investments reveals that public education can cost as much as $92,170.
From uniforms and excursions to extra activities, there is a range of costs that aren’t listed in school fees. Technology and devices alone are costing an average of $756 per year per child. And that doesn’t take into account the sharp rise in electricity costs with ever-increasing screen time.
Private education costs can be as high as $316,944, and it’s important to look beyond the upfront fees. At a private school, the average income is likely to be significantly higher. This means your child’s peers may have all the latest gadgets, take expensive trips, etc., and this can add pressure on families to keep up.
Weighing up the trade-offs
Once you have an idea of the costs associated with your schooling choice, it’s important to understand how it will affect your long-term financial plans and your everyday decisions.
Living in the catchment for the top schools can be competitive and lead to higher housing prices as a result. Whether you are renting or buying, this is an additional cost that will need to be factored into your planning.
Structuring support from family members
We are seeing a rise in grandparents contributing to the costs of education because it’s a great way to give grandchildren a head start. However, it is important to consider how this is structured.
Any financial gift can have implications for the giver, so it’s critical to seek financial advice to ensure the generosity has a positive impact on everyone. There are ways to structure this type of gift; loans or trusts, for example, ensure it is in the best interests of all parties.
Building the costs into your financial plan
Talk to your adviser as soon as possible about your education plans, as they can help you build it into your investment strategy and ensure you make decisions that support your goals.
No doubt every parent would agree that education is a worthwhile investment, but it can have significant long-term impacts. So, it’s important to consider how you will fund it as early as possible to put yourself in the best position to make it a reality.
Speak to Apt Wealth Partners today to start planning for the costs of your child’s education.
General Advice warning
The information provided in this blog does not constitute financial product advice. The information is of a general nature only and does not take into account your individual objectives, financial situation or needs. It should not be used, relied upon, or treated as a substitute for specific professional advice. Apt Wealth Partners (AFSL and ACL 436121 ABN 49 159 583 847) and Apt Wealth Home Loans (powered by Smartline ACL 385325) recommends that you obtain professional advice before making any decision in relation to your particular requirements or circumstances.
