Childhood education in Australia can be very expensive, especially with the current trend in digital products. A lot of private, and even public schools, require devices such as tablets to facilitate learning.
The cost of living Australia can also be very expensive. When you combine the two, you are looking at a lot of money.
If you have a young family and are starting to look at schooling options for your children, have a read below to gain some helpful insights to help you save.
Invest in cash
This strategy doesn’t always give you the highest return but it relatively risk free. Find an online fee free account with a high interest rate and direct debit in your regular savings amount. Have the direct debit come straight out of your pay so you ‘pay yourself first’ and watch the savings build. If you are anything like me, make sure the account has limited access so that temptation is minimised.
Watch out for ‘bonus rates’, where an account has a high rate of interest for 3 or 6 months then reverts to a low rate. There is nothing wrong with taking advantage of these rates and then moving if there is a better offer. Also watch out for term deposits that are paying good rates if you are happy to lock away your savings for a while. The problem with this strategy right now is that interest rates are low, so returns are not very good, and with inflation starting to rise your return after accounting for inflation (rising prices) is not very good.
Invest in higher risk assets such as property or shares
The advantage of investing your child’s education savings in these types of investments is that they generally have higher returns over time than just investing in cash. The disadvantage of investing in these types of investments is that they are higher risk. This means the return you might get in any one year might vary dramatically, from big gains to big losses, but over time you should make more money than cash. I will be writing a post with more detail on the pros and cons of on investing in shares in the coming weeks.
Education funds
Education funds are special funds to help you save for your kid’s education. There are some tax benefits around this type of investment but there are also plenty of rules, so be wary and make sure you read all the fine print. For example what happens to your investment should your child choose not to go to university? Or your circumstances change? Also, quite often fees on this type of investment are quite high, so make sure you compare it to all your other options and be very clear on all the fine print so you don’t get caught out.
Educating your child is a big responsibility. The two keys to success are to start early and save regularly. There are many different options for investing the money. Which is right for you depends on many factors so make sure you get proper financial advice and read all the fine print before you decide.
Save For Your Children's Educations Click To TweetAs you can see, saving for a child’s education doesn’t have to be difficult. If you need assistance, Quickle might be able to offer a small loan solution.
To apply, complete our quick and easy online application and send us your bank statement. Receive money in your account with our same day loans and microloans with manageable repayment options. For details, contact us.
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