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The cost of children's education is one of the largest expenses that parents face so it's crucial to start saving as soon as possible. Australian Scholarships Group is a not-for-profit organisation which offers individually tailored programs to help families save for the cost of their children's education. Below, the group provides several simple steps to help new parents start saving.
Why save?
Along with health care, providing an education is a necessity for your child. Planning for your child's education in the same way you would plan for other big life events will help enable you to secure your preferred education choices. While education can amount to one of the highest expenses you will incur for your child, it can provide the means for them to pursue a dream, prepare for future success and fulfil their potential.
Take a big picture view
You can choose to take a short- or long-term perspective on purchases. For example, every new family receives a $4100 baby bonus paid on the birth of their child. Most new parents spend it on short-term expenses such as baby furniture, clothes, toys and miscellaneous supplies or, worse still, absorb it into the general family budget. While it's natural to want the best for your newborn, taking a longer-term perspective and planning for the costs of your child's education will have better long-term benefit.
Start earlier rather than later
The sooner you start putting aside money for your child's education, the greater the benefits you will receive from compound interest. The later you start, the more money you will have to find periodically and the greater the effect on your family's budget.
Establish your goal
Be sure to investigate all the costs involved in sending your child to your preferred education choices. Government, independent (denominational) and private schools have widely varying fee structures. Many parents forget to add in all the additional costs involved, such as for clothing, computers and internet access. Australian Scholarships Group provides an online calculator as a tool for parents to estimate the costs of their children's secondary schooling.
Be disciplined
You will need to remain focused if you are to achieve your education goals. Wherever possible, contribute regular set amounts to your program and limit your access to funds to ensure you don't fritter them away. It's easy to find excuses to dip into savings if you don't have a dedicated account or program.
Gain taxation advantages
Be sure to optimise the benefits available for your children's education by choosing a plan that offers tax concessions. In 2003, Australian Scholarships Group and the Australian Friendly Society Association petitioned the Government to recognise the special role friendly societies play in education. Australian Scholarships Group's Education Program was recognised by specific tax legislation that provides friendly societies with the provision to offer specially designed education funds to their members.
Build your funds
Promote gifts that deliver long-term benefits to your child. Encourage your relatives to contribute money they would otherwise spend on gifts into your education program for your child so your funds build faster.
Examine complementary services
Look for more from your education program. Many organisations prioritise their company's bottom line rather than your child's education success. Be sure to investigate the complementary services on offer from your education program provider to ensure it supports children's education.
Australian Scholarships Group
Families wanting to plan for their children's education can enrol in Australian Scholarships Group's Education Program. The program can be tailored to suit individual families' needs and budgets to generate a scholarship that will give their child a head start in life.
Visit the Australian Scholarships Group website.
Australian Scholarships Group are sponsoring Early Childhood Australia to sell copies of their bestselling book Your child's first year at school: A book for parents in bulk for only $9.95 per copy.
Find out more about Your child's first year at school: A book for parents and how to order it.
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