The magical day has arrived. The magical moment of cradling your newborn child in your hands.
As you gaze into their eyes, thoughts start to rush through your head. Visions of the journey ahead. What will they look like? What sort of personality will they have? Will they be happy and healthy? What sports or interests will they embrace?
With all these questions swirling around – there is one certainty. You will do whatever it takes to give your child the best possible chance at life.
Maybe you think “Money isn’t an object when is comes to the rearing of my child”.
But quite often, this type of thinking can be counter-productive, especially when we come to needing the money the most.
Sitting down with a couple last week, they have a 3 year old daughter and a 2 year old son.
I asked, “What have you decided about your kids schooling?”
They looked at each other. Silence ensued. Each one staring at the other looking for a visual cue. No one flinches. Eventually they say, “We are still figuring that out”.
Two years out from their eldest daughter starting school and they hadn’t had a conversation yet around the education of their children. The reality is, schooling will be one of the most expensive things you will pay for your child. Something they should certainly start making decisions around.
This naturally leads into the question – enroll in a public or private school?
This tends to be a really emotive subject. We have heard arguments either way such as a mix of public education for primary with the secondary years in a private school. Maybe one of the parents attended a public school the whole way and the experience was a good one. Possibly, private education from prep through to Year 12 may be on the cards.
No matter which way you look at it, there will be an expense. It may be small or it may be a large one.
The point being, as early on in the life of the child, the parents need to ask the question of each other “Where do you sit on schooling this child?”
The next question should be, “Why do you sit that way?”
By asking the “why” question, this will naturally lead you into “What value do you think this will bring to the child if we approached it this way?”
Once you are on the same page and have a plan, the next key in all of this is starting early.
Waiting lists for schools can be 5 years in advance so ensuring the child gets into their preferred school of choice is key. But most important is figuring out how it will be paid for.
This may be through scholarship funds, saving or investing in managed funds or shares.
Scholarship funds, while not producing a massive return on investment, work well for some because they instill a level of discipline in saving ensuring that they money is there when you need it. It becomes a bill that gets paid every month in the lead up to your child starting school. Forced savings if you will.
Another strategy that has worked well for clients is pre paying the cost of education. This can be the single biggest approach for saving money on the cost of your child’s education. A lot of schools have an increase in fees tied to the rate of inflation year on year – or more. By paying this advance, you potentially lock in the current cost of schooling. There are potential downsides as you may lose flexibility to move schools but this approach is worth keeping in mind.
And don’t forget, school fees are just one component. There are additional costs for extracurricular activities such as sports, music, technology, trips or anything else you choose to get your children involved in. This is where things really start adding up.
Every parent naturally wants to give their children the best possible chance in life. Regardless of what approach you take from a schooling perspective, foresight now will ensure less pain in the future.
The sooner you start planning for this, the easier it will be.
If you need help in planning your child’s education, talk to Rothgard today.
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