It goes without saying that every parent wants the best for their children. For most if not all of us, this means we believe their education is a priority. But the cost of education is one of the greatest expenses a family will face and you need to be prepared.
Sydney parents may expect to pay $575,140 for a private education for a child born in 2017. For a government education, the expected cost for Sydney-siders is $75,080 .
Planning is essential
Most families will need to prepare carefully to be able to manage the likely costs of providing their children with the education they need for a happy and successful future.
Without a financial strategy in place, the danger is that you will end up spending from your day-to-day living budget or your holiday funds, which may reduce your retirement savings. Unless you plan, you may also need to compromise your lifestyle, both now and in retirement.
It's also important to consider the consequences of an unexpected event such as the loss of income from an illness or injury, which could further derail your plans for educating your children. Strategies to protect your family lifestyle should also be an important aspect of planning for your future.
In addition to the estimated $575,140  required for private schooling in Sydney, parents may also need to plan for university expenses. These range between $6,349 and $10,596 per student per year for the three or four years of an undergraduate degree, depending on location and discipline .
It is no longer the case that families can rely on government loans to support a child's tertiary study. Government spending per student is projected to fall from $11,800 in 2014-15 to $9,400 in 2054-55 . What's more, government funding only covers tuition costs and parents would still need to fund essentials like books, materials, union/clubs/sports fees, transport and accommodation.
The good news
The good news is that being prepared for your children's education is within the reach of most Australian families and can make a huge difference.
Being prepared means working out the schooling and university costs you are likely to face and developing a plan that is realistic and manageable given your family's overall financial goals and commitments.
I can offer advice on which financial strategies are likely to be most appropriate in your circumstances when considering your educational goals for your children. Options you may consider include specifically designed education savings plans, other savings accounts, term deposits, investment bonds and investing in shares and managed funds.
I can also help you develop a comprehensive financial approach to help you manage all your family finances. Ideally, your plan will integrate your education goals with your family's other financial goals and commitments, including daily living expenses, personal insurances, holiday plans, investments, debt management strategies and planning for your retirement.
To talk further about how to better manage your family's education costs within a whole-of-life financial plan, please contact me by phoning (02) 8115 9262 or emailing Tony Bates at email@example.com
Tony Bates is a Financial Advisor for ADX Wealth and licensed under AFSL 500640.
The information (including taxation) contained within this document is of a general nature only and neither represents nor is intended to be personal advice on any particular matter. ADX Accountants and ADX Wealth strongly suggests that no person should act specifically on the basis of the information in this document, but should obtain appropriate professional advice based on their own personal circumstances.
 The Australian Scholarships Group website, media release, accessed 12 September 2017 at https://www.asg.com.au/doc/default-source/Media-Releases/planning-for-education-index-2017/asg-planning-for-education-index-sydney-media-release.pdf?sfvrsn=6
 Tuition fees information, accessed 12 September 2017 at http://sydney.edu.au/study/finances-fees-costs/fees-and-loans/tuition-fees.html
 2015 Intergenerational Report, Australia in 2055, accessed 12 September 2017 at https://treasury.gov.au/publication/2015-intergenerational-report/