For some Australians the answer to how they're going to fund school fees is through scholarships! Whilst this IS a great idea for a small percentage of the population, the rest of us need to plan how we’re going to fund our children’s education.
When we’re talking to our clients about how their finances are structured and their life goals – new home, new investment property, renovation, private education and a great lifestyle, the conversation inevitably turns to the affordability of school fees.
The cost of private school fees range between $150,000 to $350,000 per child based on the school that you decide to send your children to and how long then will attend. Some students will start in prep whereas many parents will aim to start their children in Year 5 or 7. Either way, it is a significant life expense and although we know the day is coming, many people do not plan adequately for it nor have a solution for how to finance it.
Previously the head of the education sector for NAB and Westpac, Barry Thatcher who is now a director at Thatcher Finance, has it on good authority that the majority of schools increase their school fees on average by 5% per annum. Therefore its essential to have a good funding structure in place when the costs of education are only set to increase.
Barry explains that, “Saving your money in a savings account or term deposit simply won’t cut it. it’s not enough to cover rising school fees, increasing at almost twice the term deposit rate”.
Just the same, when you do receive that whopping invoice from the private school of your choice (trust us, we know all about it!), it makes good sense to understand the finance options available to you, whilst leveraging the lowest interest rates possible.
As parents it’s always a balancing act, between paying for school fees and still affording the extracurricular activities and holidays that go a long way to making happy memories with our kids (especially during those years where they’re still happy to spend quality time with us!). For advice on the better way to structure your finances and review your existing home and investment loans which may well save you money, please contact us. Our services are complimentary to you and we will help you structure your finances so that you can manage the school fees and maintain your ideal lifestyle too.