For those Australians with children, it’s clear that they’re no longer the only ones experiencing growth spurts.
The cost of education is rising at an exponential rate, and Australian families are feeling the financial growing pains.
In fact, every year for the last 10 years, education costs have increased by around 7%.
As a parent, no matter what type of education you choose for your children, the costs are likely to add pressure to your family budget.
Our calculations indicate that it can cost up to $260,000 to send one child to a private school for 13 years, taking into consideration additional costs such as textbooks, uniforms, excursions and extra-curricular activities.
And when it comes to paying for school fees, many Australians are paying up to $5,000 on a term-by-term basis.
The costs are so significant that in dual income families, it is not unusual to have one income entirely dedicated to school costs.
It is also important to remember that education costs don’t stop when school finishes. University students will be faced with their own HECS-related expenses.
As a result, we have found that parents are looking for greater assistance when solving the education equation. And it’s clear that the best way to tackle this is with a long term (5-10 year) savings plan that starts early.
From a basic savings account with a bank or credit union through to shares or investment (education) bonds, there are a number of options available. Management or administration costs, tax implications and flexibility are just three areas to consider when choosing a savings approach and your financial planner or accountant will be able to guide you in the right direction.
The most important decision is to make a start as education costs are forecast to continue to rise faster than inflation in the years ahead.
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