Saving for your children's education
Preparing for higher education
You want your children to have the best education possible, yet
school and university expenses and fees can be costly. The money
you spend on your kids' education could be one of your family's
Starting to save early will help your children have a
high-quality learning experience.
Work out how much money you
How much money you need will depend on whether you want your
children to go to public or private schools and whether they plan
to go to university or college.
For example, if you send two kids to a private high school which
costs an average of $20,000 a year for each child, by the time they
both graduate you will have spent $240,000 on school fees. And
that's not counting extras such as school uniforms, trips and
Public schools are much cheaper but there are still extra
tuition fees, textbooks, uniforms and school camps to pay for.
The cost of going to university or college can also vary. If
your child is eligible for HECS-HELP (a government loan available
to tertiary students) they can choose to defer payment of
university fees. Even if they don't pay fees upfront, your child
will have to pay for books and materials, union and sports fees and
transport costs. Contact the university or college and find out how
much each of these things will cost each semester, so you have an
idea of how much money you will need to save. For more information
about university fees and payment options see studying.
The earlier you start saving for your children's education, the
better. Education costs are usually a long-term goal that can take
more than 5 years to achieve. Use the savings goal
calculator and work out how much you can save or try our
Savings goals calculator
Never feel pressured to sign up to an education fund. If you are
approached by a promoter you should ask for time to carefully read
the documents, including the PDS.
To help you reach your goal, you could put your savings
Before you decide to put your money into any of the saving
options above you should consider your other financial obligations.
For example, you might be better paying off your mortgage
or paying down your debts first, before you start saving.
You should also find out more about compound interest and how it can help
your savings to grow.
Education funds are special funds to help save for
children's education. If you are considering an education fund you
should check the following to make sure these funds fit your long
term financial plan.
Here are some questions to ask before you invest in an education
- Fees - What fees will you be charged?
- Contributions - How much do you need to invest
and how often do you need to contribute? Can other people, such as
grandparents, also contribute?
- Investment options - What investment options
are available, and do the suggested timeframes for these options
meet the timing of your children's education needs?
- Fund purchases - What can you use the savings
for, for example can you use them for primary, high school or
tertiary studies? Do they cover expenses such as clothing,
laptops and excursions?
- Access to funds - What criteria need to be met
before you can access your funds? What happens if your
circumstances change, and you can no longer contribute to the
fund - do you lose all that you have invested? How difficult it is
to withdraw your money if your children's priorities change? For
example, what happens if your children decide they don't want to do
You should compare the features of an education fund with other
investments such as term deposits and managed funds. In particular
- Product fees, features and benefits
- How the fund is taxed compared to how other investments are
Saver Plus is a program to help families on low incomes develop
a savings habit and improve financial skills. Saver Plus can help
you set a savings goal and help you reach it. When you reach your
goal, your savings are matched, dollar for dollar, up to $500. Find
out more about Saver Plus.
If you need help with a financial plan to save for your
children's education, or if you need more information about
education funds, consider getting financial advice from a qualified
Talk to your children about
Let your children know your savings plan. It's important they
understand the benefit of long-term saving. You could even open a
savings account and teach them to deposit their pocket
money in it.
For more information see teaching kids about
Education is important but expensive. There are
many things you can do now to help secure your children's
Last updated: 18 Dec 2015