The cost-of-living for families continues to be challenging in the current economic climate. With this in mind, education is likely to remain a priority spend item for Australian parents, with research showing that 88% believing schooling is essential for their children to thrive, and 50% crediting it is their role to financially contribute to their child’s education throughout their whole life.
Whether opting for government, Catholic, or independent education, it is important to consider the expenses go far beyond just tuition fees. Often overlooked, additional costs such as uniforms, technology, transport, excursions, and extracurricular activities can add significantly to the overall financial burden.
According to the latest research, the total cost of education across 13 years of schooling in South Australia (Adelaide metro) for a child starting school in 2025 is projected to be:
- Government schools: $114,678.
- Catholic schools: $185,548.
- Independent schools: $302,387.
Adelaide has been recognised as one of Australia’s most affordable cities for education, with 7% below the national average for Government and Catholic education, and 14% below for independent education.
However the rising cost of education still poses a financial strain to many South Australian parents, and it’s crucial to plan ahead. Here are some strategies to help save and fund education expenses:
1. Education Bonds
Education Bonds offer a tax-efficient way to save for your child’s education. Investments grow in a tax-effective environment, and withdrawals for education expenses are tax-free. They provide flexibility, allowing parents and grandparents to contribute over time. Additionally, when a withdrawal is made from earnings for the purpose of funding education costs, the Education Tax Benefit amounts to an additional $30 for every $70 withdrawn from investment earnings.
2. Family Assistance – Grandparents’ Contributions
Research shows that grandparents play a significant role in funding education, with 35% hoping their wealth will support their grandchildren’s schooling. Some grandparents also provide direct financial contributions, covering school fees, tuition, and other essential expenses.
3. Dedicated Savings Accounts
A high-interest savings account specifically for education expenses can help parents set aside funds gradually. Automating contributions ensures consistent savings over time, and using a high interest account helps to ensure your money is always working for you.
4. Salary Sacrificing & Investment Portfolios
Some families can choose to use salary sacrificing options through their employment to fund a child’s education but this strategy is generally is not available to everyone.
Alternatively, and more commonly, families use an investment portfolio to fund a child’s education. Managed investments or tax-efficient structures can provide returns that align with future educational needs.
5. Government Assistance & Scholarships
Exploring government grants, scholarships, and bursaries can provide additional financial relief. Many schools offer financial assistance programs based on merit or need.
Start Planning Today
With proper planning and tax-effective strategies, you can reduce financial stress while ensuring your children receive the best education possible. If you’d like assistance in structuring an education savings plan, dmca advisory is here to help. Contact us today to discuss the best approach for your family’s needs.
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