Raising a child is rewarding, but can also be very expensive. The cost of schooling is a major factor to consider when budgeting to include children, and can have a huge impact on your savings account. Obviously, the further they go into the education system beyond secondary school, the more it costs.
The cost to raise a child in Australia
According to research by AMP and NATSEM conducted in 2012, the cost of raising a child in an average family can be anywhere between $474,000 and $1,097,000 depending on how much study they do. By the end of primary school, parents can expect to have cumulatively spent between $327,000 and $641,000 and this jumps to between $474,000 and $948,000 by the end of secondary school.
Tertiary education is a whole other kettle of fish, and the costs, according to the research, are estimated to increase to between $812,000 and $1,097,000. Unless you're a multimillionaire, these kinds of figures can be daunting. At this stage, you could be wondering, how can you reduce the cost of raising children, and avoid mounds of credit card debt?
There is plenty of government assistance available, and contrary to what you may think, it's not limited to only the lowest income earners. There is something out there for most families to benefit from.
School kids Bonus
This payment came into place in January 2013, and replaced the previous Education Tax Refund. The scheme runs until July 2016, and from January this year, it is means tested.
A primary age child entitles parents to a payment of $422 a year, and parents received about twice as much per child in secondary school. Eligible families will receive the payment in two instalments per year, without the need to make a claim, as it's an automatic process.
Assistance for Isolated Children
This scheme is operated for the benefit of children that cannot attend an appropriate public school because of disability, special health needs or because they live in an isolated area. The maximum payment for the distance education allowance is $3,948 per year, while other forms of assistance have differing fortnightly or annual amounts.
Payments received under this scheme are not taxed and, for the most part, are fee of income and asset tests.
Depending on where you live in Australia, there are various state government funds that help with some costs of educating your children. Here are some of the more prominent ones:
Textbook and resource allowance — Queensland
The School Card Scheme — SA
Student Assistance Scheme — Tasmania
Secondary Assistance Scheme — WA
There are also public transport concessions for school-aged children in most states, as well as government assistance for families in need. While raising a child can be expensive, you don't have to go it alone. Investigate the resources available to you through your local government, school or community groups — every bit counts!
And of course, while proper planning is essential, the cost of education should not be the only consideration when it comes to planning to have children. Many of life's necessities have some financial cost to them, whether it be a car loan for transport, or a mortgage to provide a roof over your head. While all of these things do cost money, they don't have to be unattainable.
With effective budgeting, using credit card comparison tools or home loan calculators, you can make your finance stretch further than you thought — but don't put yourself under pressure. And as previously highlighted, there are many ways to reduce the costs associated with putting children through school — which you should take advantage of if you can. With the way the marketplace is becoming increasingly globalised and complex, investing in your children's education is a vital step towards empowering their future.