Parents around the nation will breathe a collective sigh of relief over the next few days as their kids return to school. But the respite may only last until the first batch of bills arrives.
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It's that time of year when headlines alert parents to rising school costs.
Recently I read about parents forking out around $500 to kit their children out for the new school year. But this can be the tip of the iceberg.
At one private school in Melbourne parents face annual fees for 2020 ranging from $16,500 for three-year olds attending its (three-days per week) pre-school to $37,000 for a Year 12 student.
Obviously this sort of cost is beyond many families.
But the common thread is that all parents want the best for their children.
For some that may mean a private school education with all the trimmings. For others, the local public school is a great option.
Whatever you decide on, it's a fair bet that education costs will take you by surprise.
These days, mums and dads have to pay for a lot more than a sturdy school bag and a decent pencil case.
Ultimately, there's not much point giving your kids a private school education if it leaves your family financially skewered. What matters is that the school you choose meets your child's needs, your personal values and your ability to pay.
Students are often expected to bring a digital device to school, which can add an extra $2000 to the year's school bills.
Bear in mind too that education expenses aren't a one-off, they'll be part of your life for around 13 years.
Research suggests that you could pay a total of anything from $68,000 for a public school education to upwards of $298,000 if you opt for the private system.
Like any major cost, education expenses can be more manageable if you plan ahead and put money aside from an early stage.
As education expenses continue to outpace inflation, one strategy that makes sense is to set up an investment portfolio for your child.
It's worth speaking with your tax adviser about whose name the portfolio is held in.
High levels of tax can apply to minors on unearned investment income.
From here, parents can select from a variety of investments to save for education.
The key is to work out an investment strategy that fits your budget and timeframe.
But be mindful of any fees you pay.
These will eat into your education savings portfolio, and high fees are not an indicator of higher returns.
Ultimately, there's not much point giving your kids a private school education if it leaves your family financially skewered. What matters is that the school you choose meets your child's needs, your personal values and your ability to pay.
