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How to SAVE for your children’s education

Updated: May 21

If you are a parent you are fully aware that the cost of private education is continually rising, with some schools in Sydney charging fees of up to $38,000 a year, sometimes more (in boarding and other cases) ; and that doesn’t include uniforms, excursions and after school activities. I know this first hand as my daughter has been to two school private schools during her eduction; A top tired school and a lower tiered one.


(Rankings and costs of Sydneys private schools displayed below the article)


























The cost of private primary and private school is one thing, but schooling doesn't stop there- then there paying for a university degree (particularly in the popular disciplines like law, IT and medicine) fees are also rising. Families are taking on more debt and the associated risk to ensure their child gets the best educational outcomes and start at life.

The bottom line is that education is getting more expensive and competition for entry to the best courses will only get more fierce.

No parent wants their child to start their working life with a huge debt hanging over their heads, potentially pushing stress levels of a new job, continued training and independent living costs to a toxic place of severe stress. Its simply not healthy to have the weight of the world on your child’s shoulders while they are trying to figure out their place in the world. Of course a little bit of hard work never hurt anyone and I’m not suggesting you spoil them, simply take into account the world is changing rapidly and jobs, relationships and housing is not as secure or accessible as it once was. Young adults forced into high stress situations can present with trauma like responses and develop unhealthy coping mechanisms. They also tend to burn out far quicker in their new found careers and personal lives.


But don't fear there are easy ways to save and prepare!


Starting a savings plan when your children are young may be a very wise solution . Parenting is hard, it can be emotionally challenging and financially demanding. But the key is to put a sound plan in place as early as possible and stick to it. The earlier you start the less you actually have to do later! Just think of the return on investment! A secure well functioning child is priceless! Life can throw many curve balls- but financial challenges don’t have to be one of them as future finances are usually very easy to plan and prepare for.

Most parents know the importance of doing this but are unsure how to start or what product or strategy to follow, particularly when there are tricky tax rules to be aware of. For example, if you put the investments in your own name any interest income is added to your taxable income and may reduce your Family Tax Benefits. If you put the investments in your child’s name, penalty tax rates apply once they have “unearned” income in excess of $416.

So what to do?

Here are a number of options to consider.

Remember to talk to your financial advisor of tax professional if you are unsure of the best option for you.



Investment bonds

One option is an “investment bond”. These products sometimes have other names but are essentially tax paid life policies where you choose the investment strategy. If they are held for at least ten years the proceeds are tax-free when cashed in.

One useful feature is that the investor can make a contribution of up to 125% of the previous year’s contribution and retain the tax-free status after ten years. Income is reinvested and not included in the investor’s taxable income. If you cash it in before ten years there may be tax payable but you can use the proceeds for any purpose – not just for education expenses.

Friendly society education plans

These are similar to investment bonds in some ways. The friendly society pays tax at the corporate tax rate of 30% and income is reinvested. However a special tax concession allows the friendly society to claim back the tax paid if the funds are used for educational purposes.

The plan proceeds must be used for educational purposes but there is more flexibility in making contributions and withdrawing funds than with an investment bond.

Mortgage offset account

If you have a mortgage you can build up funds in a mortgage offset account. This works both ways by reducing your interest costs at the same time. You can draw on the offset account when school fees become due.

Some other options may be;

Term deposits

A term deposit is a cash investment held at a financial institution (like your regular bank). Your money is invested for an agreed rate of interest over a fixed amount of time, or term. However these are currently at very low interest rates- under the rate of inflation, which means your money will unlikely grow.


High yield savings accounts

A savings account with monthly contributions automated from your checking or debit account. Don't be deceived by the name high yield these can still be very low incrust rates of return. most in Australia currently below inflation. These are good for saving short term. Amounts of pooled money after a year or so can then be invested elsewhere.


Or even a structured investment set up by your financial advisor.


You could consider a trust or property asset that produces an income to later pay the kids expenses.

One solution rarely suits every person and we recommend that you talk to your licensed adviser to determine which options best suit you and your family’s circumstances.


Below is a chart of private school fees in Sydney for your reference. Taken from WWW.SYDNEYPRIVATESCHOOLS.COM.AU

Sources:

www.ato.gov.au, “Individual Income Tax Rates - Children”; “Income of individuals under the age of 18”


https://www.privateschoolnews.com.au/sydney-private-secondary-school-fees





SYDNEY PRIVATE SCHOOL FEES 2019


Information categorised as follows;


SCHOOL NAME


SUBURB


YEAR 8


YEAR 10


YEAR 12


MOST to LEAST expensive




Cranbrook School

BELLEVUE HILL

$36,120

$36,120

$38,100



The King's School

NORTH PARRAMATTA

$33,886

$34,586

$36,900



Sydney Grammar School

DARLINGHURST

$36,615

$36,615

$36,615



St Catherine's School

WAVERLEY

$33,160

$34,160

$35,080



Trinity Grammar School

SUMMER HILL

$31,460

$32,690

$34,770



SCECGS Redlands

CREMORNE

$31,200

$34,600

$34,600



Presbyterian Ladies' College

CROYDON

$33,040

$33,040

$34,080



Newington College

STANMORE

$31,347

$33,291

$33,984



St Joseph's College

HUNTERS HILL

$33,360

$33,360

$33,360



St Andrew's Cathedral School

SYDNEY

$32,035

$34,370

$33,270



Sydney Church of England Grammar

NORTH SYDNEY

$29,880

$31,460

$33,060



Knox Grammar School

WAHROONGA

$31,170

$31,170

$32,940



Moriah College

BONDI JUNCTION

$28,186

$30,513

$32,885



Abbotsleigh

WAHROONGA

$30,830

$31,620

$32,840



Barker College

HORNSBY

$30,920

$32,820

$32,820



Ravenswood School for Girls

GORDON

$31,980

$32,735

$32,800



Pymble Ladies' College

PYMBLE

$29,955

$31,005

$32,375



MLC School

BURWOOD

$29,952

$30,664

$31,584



Meriden School

STRATHFIELD

$30,100

$30,500

$31,470

Reddam House



WOOLLAHRA

$27,125

$29,305

$31,045



St Ignatius' College

LANE COVE

$28,600

$28,600

$29,520



International Grammar School

ULTIMO

$24,850

$24,850

$25,900

Loreto Normanhurst



NORMANHURST

$22,374

$22,374

$25,335



Santa Sabina College

STRATHFIELD

$22,750

$22,750

$23,650



St Luke's Grammar School

DEE WHY

$22,740

$22,940

$23,505



Monte Sant' Angelo Mercy College

NORTH SYDNEY

$20,060

$20,820

$22,380



Loreto Kirribilli

KIRRIBILLI

$20,190

$22,260

$22,260



Kinross Wolaroi School

ORANGE

$19,020

$19,328

$20,440



Central Coast Grammar School

ERINA HEIGHTS

$19,180

$20,320

$19,980



Hunter Valley Grammar School

ASHTONFIELD

$17,040

$17,040

$18,009



Inaburra School

BANGOR

$16,104

$16,104

$17,722



Oxford Falls Grammar School

OXFORD FALLS

$15,552

$15,552

$17,232



Calrossy Anglican School

TAMWORTH

$12,100

$15,640

$16,605



Northern Beaches Christian School

TERREY HILLS

$12,970

$13,750

$16,330

St Augustine's College Sydney



BROOKVALE

$14,612

$14,372

$15,974



Pacific Hills Christian School

DURAL

$13,690

$13,690

$15,940



Waverley College

WAVERLEY

$13,119

$13,998

$14,958



Mount St Benedict College

PENNANT HILLS

$12,900

$12,900

$12,900



Our Lady of Mercy College

PARRAMATTA

$10,750

$10,750

$12,750



William Clarke College

KELLYVILLE

$11,868

$12,124

$12,700



Marcellin College

RANDWICK

$11,180

$12,480

$12,480



Oakhill College Castle Hill

CASTLE HILL

$10,290

$11,020

$11,410



St Patrick's College, Strathfield

STRATHFIELD

$9,900

$9,570

$10,689



Chevalier College Bowral

BURRADOO

$8,157

$8,771

$9,920



St Aloysius' College

MILSONS POINT

$4,905

$4,905

$9,810



Bishop Druitt College

COFFS HARBOUR

$9,072

$9,072

$9,720



St Philip's Christian College

WARATAH

$7,960

$8,280

$9,660



Rouse Hill Anglican College

ROUSE HILL

$8,160

$8,160

$9,600



Green Point Christian College

GREEN POINT

$8,190

$8,190

$9,483



St Gregory's College Campbelltown

GREGORY HILLS

$8,400

$8,570

$9,340



St Scholastica's College Glebe Point

GLEBE

$7,800

$7,800

$9,060



St Pius X College

CHATSWOOD

$9,036

$9,036

$9,036



William Carey Christian School

PRESTONS

$7,960

$8,410

$8,890



St Columba Anglican School

PORT MACQUARIE

$7,076

$8,244

$8,592



Rosebank College

FIVE DOCK

$7,750

$7,925

$8,260

St Edward's Christian Brothers' College

EAST GOSFORD

$7,455

$6,955

$8,092



Broughton Anglican College

MENANGLE PARK

$7,100

$7,100

$7,800



Thomas Hassall Anglican College

MIDDLETON GRANGE

$7,320

$7,320

$7,740



Lindisfarne Anglican Grammar School

TERRANORA

$6,912

$6,912

$7,512



Arndell Anglican College

OAKVILLE

$7,160

$7,160

$7,455



Edmund Rice College

WEST WOLLONGONG

$5,904

$6,318

$7,164



Christian Brothers High School

LEWISHAM

$7,111

$7,111

$7,111



Lakes Grammar - An Anglican School

WARNERVALE

$6,376

$6,376

$7,095



Trinity Anglican College - Albury

THURGOONA

$5,950

$7,050

$7,050



St Dominic's College

KINGSWOOD

$5,958

$5,958

$6,696



St Mary Star of the Sea College

WOLLONGONG

$4,648

$4,544

$6,104



Amity College, Prestons

PRESTONS

$5,460

$5,460

$6,100



Trinity Catholic College

AUBURN

$5,036

$5,336

$5,823



Richard Johnson Anglican School

OAKHURST

$5,200

$5,200

$5,715



St Patrick's Marist College

DUNDAS

$4,779

$4,941

$5,688



St Columba's Catholic College

SPRINGWOOD

$4,323

$4,761

$5,520



Caroline Chisholm College

GLENMORE PARK

$4,092

$5,055

$5,295



Bethany College

HURSTVILLE

$4,649

$4,895

$5,162



Gilroy Catholic College

CASTLE HILL

$4,239

$4,476

$5,139



St Andrews College

MARAYONG

$4,377

$5,064

$5,129



Cerdon College

MERRYLANDS

$4,026

$4,377

$5,079



St John Paul II Catholic College

SCHOFIELDS

$4,266

$4,587

$4,974



Bede Polding College

SOUTH WINDSOR

$4,395

$4,548

$4,974



Xavier College

LLANDILO

$4,101

$4,338

$4,869



St Johns College

DUBBO

$3,639

$4,212

$4,836



Trinity Catholic College

LISMORE

$3,388

$3,689

$4,238



St Charbel's College

PUNCHBOWL

$2,861

$3,047

$4,212



Mater Maria Catholic College

WARRIEWOOD

$3,174

$3,315

$3,807



St Joseph's Regional College

PORT MACQUARIE

$3,399

$3,399

$3,789



St John Paul College

COFFS HARBOUR

$3,489

$3,489

$3,489



James Sheahan Catholic High School

ORANGE

$2,871

$3,003

$3,303



Malek Fahd Islamic School

GREENACRE

$3,180

$3,340

$3,105



Patrician Brothers' College

BLACKTOWN

$2,157

$2,394

$3,057



MacKillop Catholic College

WARNERVALE

$2,191

$2,323

$2,801



Penrith Anglican College

ORCHARD HILLS

$2,020

$2,020

$2,795



St Peter's Catholic College

TUGGERAH

$2,159

$2,288

$2,759



St Philip's Christian College - Cessnock

NULKABA

$1,610

$2,030

$2,713



Al Noori Muslim School

GREENACRE

$2,660

$2,660

$2,660



Marist Sisters' College Woolwich

WOOLWICH

$1,778

$1,971

$2,625



Aquinas Catholic College

MENAI

$1,751

$1,941

$2,586



St Patrick's College, Sutherland

SUTHERLAND

$1,744

$1,934

$2,576



St Paul's High School

BOORAGUL

$1,698

$1,698

$2,559



St Francis Xavier's College

HAMILTON

$2,559



St Ursula's College

KINGSGROVE

$1,731

$1,919

$2,557



Marist College Kogarah

BEXLEY

$1,699

$1,883

$2,509



Good Samaritan Catholic College

HINCHINBROOK

$1,658

$1,838

$2,449



Corpus Christi Catholic High School

OAK FLATS

$1,790

$1,933

$2,403



Holy Spirit College

BELLAMBI

$1,790

$1,933

$2,403



John Therry Catholic High School

ROSEMEADOW

$1,790

$1,933

$2,403



Magdalene Catholic High School

NARELLAN

$1,790

$1,933

$2,403



Mount Carmel Catholic College

VARROVILLE

$1,790

$1,933

$2,403



Holy Spirit Catholic College

LAKEMBA

$1,622

$1,799

$2,396



Patrician Brothers' College Fairfield

FAIRFIELD

$1,574

$1,745

$2,325



Al-Faisal College

AUBURN

$2,223

$2,299

$1,995



Australian Islamic College of Sydney

MOUNT DRUITT

$1,780

$1,780

$1,780

St Pius X High School

ADAMSTOWN

$1,698

$1,698


There are more schools that do not appear on this list....


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