After a mortgage, education costs can be one of the family's biggest expenses, so it pays to plan carefully. Some families choose to use a dedicated education savings plan, managed fund or a high-interest savings account to prepare for the cost. By making regular deposits into the savings tool of your choice, it can help spread the cost of education and may also earn some interest.
When budgeting for annual education costs, it helps to make a list of all the expected expenses. While fees, uniforms, shoes and stationery are the obvious ones, don't forget school camps and excursions, music lessons, sporting activities, internet access and computers. Keep a list of all major events and expenses during the year so you can set aside money and won't be hit with unexpected last-minute bills.
Shopping for a bargain
If you have children in high school then the cost of text books can add up. These items are generally only needed for one year, so why not see if your child's school has a second-hand book scheme or a swap program. For items you need to buy, try discount stores. Additionally, most chain stores have sales at the start of the year where you can pick up cheap bags, lunch boxes and other necessities. Cost can always be reduced if you shop around and putting name tags on all your kid's belongings will ensure you don't have the added expense of replacing lost items.
Take advantage of any family and childcare benefits available to you, such as the Education Tax Refund if eligible. This benefit offers up to 50 per cent back on a range of children's education expenses, including items such as computers, software, textbooks, stationary and even uniforms. Just don't forget to keep your receipts.
Lunch box savings
With many families time-poor, it's often easier to send your kids to school with lunch money rather than a packed lunch, yet a packed lunch is one of the easiest ways to cut costs on a daily basis. This money saver takes a little extra effort, but the rewards are twofold. Aside from preparing a healthy lunch for your child, it also ends up costing you far less over the course of the year.
The start of a new school year is often the time when families review pocket money. How much you give can depend on the age of the child, how much disposable income you want them to have, and what they are expected to do to earn it. For example, many kids are "paid" for doing household chores such as mowing lawns or washing the car. By paying pocket money online into a low-fee savings account, your kids can also login to watch their balance grow. This helps eliminate any frivolous dipping into cash so they can save for the things they really want.
Back to school expenses can seem endless, but with some pre-planning it is possible to take the sting out of the cost.
Dianne Charman is an AMP financial planner and mother of two.
Any advice given is general only and has not taken into account your objectives, financial situation or needs. Because of this, before acting on any advice, you should consult a financial planner to consider how appropriate the advice is to your objectives, financial situation and needs.
To find your nearest AMP financial planner visit www.amp.com.au/findaplanner.