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Education costs
Finding the money to pay the soaring costs of education is a battle for many Australian
families. With no relief in sight, it's time for some serious planning.
Rising cost of education
Raising a child in the new century looks like being big business. Recent reports indicate the
basic cost of raising one child to the age of 18 now exceeds $200,000. Add private education fees
and the figure soars. Make no mistake. Alongside the mortgage, education is becoming a substantial
and sobering cost for families. And it's not just for the growing number of children attending
private schools.
Public education is not free
Contrary to common belief, public education is not free. Increasingly, costs at government
schools are being passed on to parents who can expect to pay around $800 to $1200 per child each
year on school levies, uniforms, books and excursions. And while the cost of non-government
education varies enormously depending on which state and which school, on today's figures, parents
can expect to pay between $5000 and $17,000 per child each year at secondary level.
Planning for future expense
Many grandparents, for example, contribute to their grandchildren's education costs believing
that access to education is the best legacy. But education is one cost that can be planned for a
long time before children even step foot in the playground. Given the long lead times associated
with bearing and raising children, the opportunity is there to do some serious forward planning. A
regular investment plan is a good way to prepare for future education costs, it has the benefit of
long-term investing and the simple but effective powers of compound interest. A family with a baby
due later in the year, for example, might start a regular investment plan using any gifts of money
intended for the baby, and then continue to contribute a monthly amount. Over this sort of
timeframe, using a cash management trust or managed fund can be better than putting the money into
a traditional savings bank account - or the piggybank. If you've already got children, it's not too
late either. The power of compound interest simply means get started as soon as possible.
Start small, now
There's a misconception that people have to start with a huge amount when they're investing money. People can start with a small amount and have it come out of their bank account or from their pay. You can start a Navigator regular investment plan with $3000 and a minimum monthly investment of $250. It's important to start now, and not put it off, to benefit from long-term investing. While some people pay everything else and save what they have left over, she says people should save first - however small the amount. The commitment to saving must be paramount.
For more information on regular investing speak to your financial adviser or for more
information on Navigator call Navigator Investor Services on 1800 653 710
Disclaimer
This article was supplied by Colonial First State Investments Limited ABN 98 002 348 352 AFS
licence number 23 24 68 (Colonial First State). Investments in products issued by Colonial First
State Investments are available through the Navigator Personal Investment Plan and Navigator
Personal Retirement Plan. The information in this document reflects Navigator Australia Limited's
('Navigator') understanding of existing legislation, proposed legislation, rulings etc as at the
date of issue. In some cases the information has been provided to us by third parties. While it is
believed the information is accurate and reliable, this is not guaranteed in any way. The
information is not, nor is it intended to be, comprehensive or a substitute for professional advice
on specific circumstances. The securities advice or information given in this document is of a
general nature and has not taken into account the investment objectives, financial situation or
particular needs of any particular person. Before making an investment decision on the basis of the
advice above, a prospective investor needs to consider, with or without the assistance of a
professional adviser whether the advice is appropriate in the light of their particular investment
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