In this article, we provide three things to consider when planning for private school fees.
Setting some clear strategies and sticking to them can make all the difference to affording private school fees.
Private school fees. There, we said it. These three words are enough to send many parents and carers into a cold sweat. Now please don’t think we’re discouraging a private education for your child – choosing government or private is a very personal and individual decision with both offering amazing opportunities. But the fact is that a private school education requires a far greater financial commitment. You need to go into it with your eyes wide open, and with a long-term plan.
And some strategies to avoid that cold sweat.
So here’s a few things to consider when planning for private school fees.
Look forward to fees
OK, we’ve got your attention. How can you look forward to paying private school fees?
Well, you’ve done your research and decided that private school is the way to go. Brilliant. Having made this choice, you want your family to fully embrace and enjoy this stage of your lives; not be burdened by the costs.
Based on various calculations available, if your child was starting at a secondary independent private school in 2020, you would need to allow for approximately $215,000 by the end of Year 12. And that’s one child.
To some this may not be daunting. For others it’s another story.
Whatever position you’re in, you owe it to yourself and your family to set some clear goals. Goals that are based on what you want your overall lifestyle to look like, allowing for the private school fees as well as everyday expenses, mortgage, investments, holidays and other needs. Yes, you may have to make sacrifices along the way, but you want these to be planned and not unexpected.
And above all you want to make the most of this time with your kids.
We can help you with this goal setting exercise. It’s exactly why we created our 10/3/now process. By looking at the short-term (now), medium-term (3 years) and long-term (10 years), you can plan for those big life events and move forward with a sense of security and confidence.
Cashflow is priceless
Planning is one thing. Sticking to the plan is another. The biggest challenge with staying on track is cashflow.
Unexpected events like COVID highlight how important it is to have a strong hold on cashflow, knowing where to set your limits and how to manage your spending.
Again, we can help you here and establish easy to implement strategies and habits so that you control your cashflow, rather than your cashflow controlling you.
Strategies like clearly separating your income into two streams; one to cover fixed spending (mortgage, bills, etc) and one for discretionary (gifts, entertainment, etc) with realistic limits. Balanced with strategies for paying off debt and saving for the future. Our Tribeca Tracker app is a great way we can help you stay on top of your budget and expenses.
We know it’s not easy. Keeping a healthy cashflow takes plenty of effort and commitment. But doesn’t anything worthwhile?
Make smart choices
A word of caution. What appears the easiest way to meet those private school fees – school savings schemes, bonds, credit cards – may leave you with a larger debt and limited cashflow.
And less choices.
It’s OK to be worried and cautious about taking on private school fees. Especially if you have multiple children to consider. It’s actually a good thing. It shows that you do have your eyes open, and care about your family’s future.
So our advice is to get as much advice as you can when planning for education costs, especially private school fees. A well thought out savings strategy (not reliant on quick-fixes or the generosity of the grandparents) can make your child’s education not only achievable, but financially stress-free.
It’s hard to put a value on that.
If you would like to discuss a plan for private school fees or any other financial advice, our Tribeca Tribe is here for you. Just click here to arrange a 15 minute phone call.