As a parent you want the best for your kids, it makes sense to want to ensure they get the best education.
So, you want to send your kids to private school in a few years’ time to give them the best possible education? After reading this news article about school fees then I hope you are prepared to fork out the big bucks. According to ASG, the cost of privately educating a child in Melbourne in 2019 was $475,342, there was fee increase of 1-4% in 2020 and 2021 so this would be closer to $484,000 now. To be clear includes all uniforms, books and extracurricular activities.
What’s it going to cost?
This is an average of $40K per year on school fees, if you have two kids then you can just go ahead and double that to $80K per year. Me? I’ve got 3 kids, so that’ll be $120K per year if you don’t mind!
To pay for this, you need to be bringing home $125K gross per year, and that’s just to pay for education costs. That doesn’t take into account your living expenses, mortgage repayments and the fact that you likely don’t just sit on your couch alone at night – you probably have a life you somewhat enjoy living too.
On a side note, the excursions at these private schools are pretty good – my nephew and niece at Brighton Grammar get to go to Vietnam for school excursions in year 8. I’m pretty sure in year 8 I had the afternoon at the Sherbrook Forest which was amazing at the time! How times have changed.
Coming from the high school system at Balwyn High I’ve wondered if this whole private school education is worth it. The cost is high but surely there has to be some other benefits? I definitely think the network you build at private school comes in very handy throughout your adult life, whether they be through sports activities or just the people you hang out with.
If networks and footy teams don’t really float your boat for $1M, then you can try your luck getting into some of Melbourne’s most prestigious high schools. It may surprise you but a public High School is the best performing school in the state with its VCE scores! Mac Robertson Girls High School is the best girls’ school in the state and Melbourne High School in the top 3 in the state for boys’ schools. Both of these have tough entry and you will need to pass some exams to get in but compared to $475K you’d be looking at closer to $66K for public schooling across the duration.
How to get started saving now for school fees
If private school is the way you want to go, then don’t just hope that you’ll be earning more money when the time comes. You need to plan for it now by putting money aside. This might be through something like a term deposit, investing shares, other people might consider trading cryptocurrency or just the good old savings account. Either way, just like when planning to buy a house, get those funds invested and earning interest early.
Simply put away a set amount each week
Anything is going to be better than just waiting till they start school. If you could afford $200 per week, then this will be $10,400 per annum to put towards school fees. It won’t cover a year of education but in some cases, it may cover 50% which will be a big help.
You can either have this come out as a direct debit into an external savings account which you have limited access to or what I would recommend is an offset account against your home loan. Some lenders offer multiple offset accounts so you can compartment your money for different purposes (read more about this here).
Invest in a school fees fund with a specified fund manager
Again, you will be required to make regular contributions. I’d suggest doing your own research and finding one the suits your needs. Make sure you check things like ongoing fees, cancellation costs and what happens to the money if you child drops out of school at 14 to become an app developer.
You could also speak to a financial planner, they can give you some good advice. Just be mindful to keep an eye on the fees again. You don’t want your nest egg nibbled away by fees, maintenance charges and administration costs.
Get a scholarship
This is what I’m going for with my kids if we go down the path of private schools. I’ve got each of them running laps at 2 years old and hitting the gym to build up strength, hopefully they’ll inherit my sporting prowess over my academic ability. A lot of private schools will offer part scholarship as well.
Whatever ever you are thinking, feel free to speak to us to set up a plan. Now is the time to do it if it’s on the cards.