Paul's Insights: School costs - prepare for plenty
Parents around the nation will breathe a collective sigh of relief over the next few days as their kids return to school. But the respite may only last until the first batch of bills arrive.
- {{x.value}}
{{ twilioFailed ? 'SMS Code Failed to Send…' : 'Enter your SMS code' }}
A text message with your verification code was just sent to {{user.DayPhone}}
We cannot send you a code via SMS to {{user.DayPhone}}
Hi {{ user.FirstName }}, please provide your mobile number.
{{ content.trialHeading.replace('{0}', user.FirstName) }}
We'll send you a text message with a verification code to start your free {{ '0' == '1' ? 'Eureka Report' : 'Intelligent Investor' }} 15-day trial.
{{ content.upgradeHeading.replace('{0}', user.FirstName) }}
The email address you entered is registered with InvestSMART
Please login to continue
We have sent you an email with the details of your registration.
Looks you are already a member. Please enter your password to proceed
{{ upgradeCTAText }}
Updating information
Please wait ...
Your membership to InvestSMART Group recently failed to renew.
Please make sure your payment details are up to date to continue your membership.
Having trouble renewing?
Please contact Member Services on support@investsmart.com.au or 1300 880 160
You've recently updated your payment details.
It may take a few minutes to update your subscription details, during this time you will not be able to view locked content.
If you are still having trouble viewing content after 10 minutes, try logging out of your account and logging back in.
Still having trouble viewing content?
Please contact Member Services on support@investsmart.com.au or 1300 880 160
Please click on the ACTIVATE button to activate your Eureka Report 15-day free trial
Please click on the ACTIVATE button to activate your Intelligent Investor 15-day free trial
Please click on the ACTIVATE button to finalise your membership
Unsuccessful registration
Registration for this event is available only to Eureka Report members. View our membership page for more information.
Registration for this event is available only to Intelligent Investor members. View our membership page for more information.
- You are already registered for this event.
- This event is already full.
- Please select a quantity for at least one ticket.
- {{ i }}
Forgotten password
Please enter your email address below to request a new password
- Indepth analysis of ASX listed shares
- BUY, Hold and Sell Recommendations
- Ideas Lab
- Special Reports
- Alan Kohler’s Weekend Briefing
- Interviews with CEO’s & top influencers
- Money Cafe and Talking Finance
- Super Advice and Q&A with Ask Alan
It’s that time of year when headlines alert parents to rising school costs. Only recently I read about parents forking out around $500 to kit their children out for the new school year. But this can be the tip of the iceberg.
At one private school in Melbourne parents face annual fees for 2020 ranging from $16,500 for 3-year olds attending its (3-days per week) pre-school to $37,000 for a Year 12 student.
Obviously this sort of cost is beyond many families. But the common thread is that all parents want the best for their children. For some that may mean a private school education with all the trimmings. For others, the local public school is a great option.
Whatever you decide on, it’s a fair bet that education costs will take you by surprise.
These days, mums and dads have to pay for a lot more than a sturdy school bag and a decent pencil case. Students are often expected to bring a digital device to school, which can add an extra $2,000 to the year’s school bills.
Bear in mind too that education expenses aren’t a one-off. They are going to be part of your life for around 13 years. Research suggests that you could pay a total of anything from $68,000 for a public school education to upwards of $298,000 if you opt for the private system.
Like any major cost, education expenses can be more manageable if you plan ahead and put money aside from an early stage.
As education expenses continue to outpace inflation, one strategy that can make sense is to set up an investment portfolio for your child. It’s worth speaking with your tax adviser about whose name the portfolio is held in. High levels of tax can apply to minors on unearned investment income.
From here, parents can select from a variety of investments to save for education. The key is to work out an investment strategy that fits your budget and timeframe. But be mindful of any fees you pay. These will eat into your education savings portfolio, and high fees are not an indicator of higher returns.
Ultimately, there’s not much point giving your kids a private school education if it leaves your family financially skewered. What matters is that the school you choose meets your child’s needs, your personal values and your ability to pay.
Click here to read InvestSMART's article on calculating the cost and your required savings of putting your children through school.
Paul Clitheroe is Chairman of InvestSMART, Chairman of the Australian Government Financial Literacy Board and chief commentator for Money Magazine.
