Providing children with quality education is one of the greatest gifts parents can bestow. With a feast of schooling options available, making the right choice is challenging. Paying for it can be even harder!
Industry figures suggest that for a child born in 2015, the total cost of education from pre-school to Year 12 can range from just over $64,000 in government schools through to more than $450,000 in the private system*.
Moreover, education costs come at a time when families face other challenges like paying off a home loan and setting money aside for retirement.
Simply hoping it will all work out is not a plan. The key to meeting education expenses is to lay sensible foundations from an early stage - preferably before your child starts school.
But there's much to consider. Planning for school bills can mean revising household budgets, especially if one parents is on maternity/paternity leave. It can also involve issues like whose name to invest to minimise the burden of tax.
Great advice is a good investment for families facing education expenses. And it can encompass the whole family, if grandparents and other relatives wish to contribute.
Contact us today for expert advice on strategies to give your children the best education you can afford.
*ASG Education Cost estimates http:/www.asg.com.au/doc/default-source/Media-Releases/Planning-for-Education-Index/national-metro---child-born-in-2015.pdf?sfvrsn=0
Strategies to pay for Education
1. Build cash savings
This is a low risk option, although your money will earn low, fully taxable returns without capital growth.
2. Grow a diverse portfolio of assets
Shares, managed funds, or an investment property can all generate healthy returns to meet eductaion costs. The right choice for you depends on your investment timeframe and how you feel about risk.
3. Add savings to your home loan
Making extra payments on you home loan can significantly lower interest charges, and the funds can be accessed via redraw to meet eduction costs.
4. Access home equity
Home loan interest rates can be the lowest of all forms of debt. Talk to us about using home equity to fund your child's education.