From Primary to Tertiary: How To Plan For Schooling Costs

Every parent wants to give their kids the best education possible, even if that means making some lifestyle sacrifices. But when it comes time to start school, a lot of parents are still surprised at how much schooling costs can disrupt their lifestyle, and these costs keep rising as the child progresses through school.

At Lifestyle Led Wealth, we’ve found that it’s important for parents to start thinking about how they’ll fund schooling as early as possible. Early planning ensures that you can give your child the kind of education you want and that you’re ready for any cost surprises along the way.

If you’re planning to start a family or you already have one, we’ve put together this guide on how to plan for schooling costs and some of the ways you can fund your child’s education.

How Much Does Australian Schooling Cost?

School fee costs in Australia depend on whether you take your child to a public or non-government (private or catholic) school.

While tuition in public schools is free, there are additional costs for things like camps, school uniforms, sports, and musical instruments. On average, a 13-year education in a metro area government school will cost you between $100,000 and $150,000 depending on the specific location.  

Independent (private) and religious schools are significantly more expensive compared to public schools.

Catholic education ranges between $180,000 to $250,000 over 13 years, again depending on location. Getting a private education is the most expensive option with costs reaching over $300,000 in many metro areas across Australia. In elite private schools, a 13-year education costs between $400,000 and half a million.

Not Just Tuition

When you plan education costs, don’t just consider tuition; also include expenses for extracurricular activities, books, overseas trips, and other extras. If you’re planning to enrol your child in a boarding school, factor in accommodation costs as well.  

All these additional costs make up a big chunk of total education spending. In many private schools, you could pay as much in additional expenses as you do in tuition. So, planning with just tuition will leave you half-prepared for your child’s schooling costs.  

Preparing for Cost Changes

At some point, many parents who initially enrolled their kids in a public school shift to private schooling for various reasons, like academics, location, or values. What many are not prepared for is the large increase in cost.

You may be going from a public school where the annual cost is $3K for everything to an independent school that costs $35,000+ per year for just tuition. Add the cost of sports, music lessons, trips, and perhaps boarding, and the difference in cost can be substantial.

In your plans, it’s important to factor in potential increases in costs. If you know ahead of time that you’d like to enrol your child in a private school, then plan how you’re going to fund the higher school fees.

Tertiary Education

All the figures we’ve mentioned above are just for primary and secondary education. If you want to support your kids all the way up to tertiary education, those are additional costs you have to include in your strategy.

While Commonwealth Supported Places (CSPs) and HELP loans can help cover tuition fees, you may still need to help your child with living expenses for things like food, lodging, and travel.

How to Plan for Schooling Costs

Looking at all these numbers, you might feel disheartened and wonder whether you’ll be able to afford a good education for your kids. But with good (and early) planning, you can pay school fees while still enjoying a comfortable lifestyle.

The most important thing is to pick a strategy that works for your current financial situation and is in line with the education goals you have for your children.  

Generally, you have two options when it comes to funding schooling costs.

1. Incremental Savings

The first choice is to start putting a little money away and build up your savings and wealth over time. You can do this via a simple savings account or through a number of investment structures with varying levels of risk.

One of the best investment structures you can use to save for schooling is an education bond. It offers moderate returns (usually higher than a savings account or term deposit) and tax benefits, including rebates if you use the money for educational expenses and tax-free withdrawals if you save for more than 10 years.   

If you can tolerate higher risk, consider managed investments like ETFs or managed funds. They offer potentially higher returns but come with a higher risk of loss.

2. Include Schooling Costs in Your Spending Plan

The second option is to wait until your child has started schooling and include education costs in your spending plan.

The risk with that is that schooling costs might turn out to be a lot higher than you anticipated. You may struggle to pay school fees without impacting your lifestyle. It also leaves you vulnerable to large cost increases.

For peace of mind and to secure your child’s educational future, having a savings or investment plan is the best option.

Let Us Help You Plan for Schooling Costs

Whether school is still a few years away or you’re already in the thick of it, we can help you plan how you’ll fund schooling. At Lifestyle Led Wealth, we offer expert education funding advice that’s tailored to your lifestyle and goals.

Contact us at 1300 068 453 to talk to Justin, our financial planner, about planning for schooling costs and securing your child’s education.

Disclaimer: The information contained in this document is of a general nature only and has been prepared without taking into account your objectives, financial situation or needs.