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Some financial relief for parents with school children

Some relief for parents with school children

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.

State-specific schemes

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.

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How to open a savings account for my child?

Some banks and financial institutions allow parents to open a bank account for their child as soon as it is born, and start depositing funds to go towards the child’s future.

Children’s savings accounts generally don’t have fees, and are structured to help develop positive financial habits by limiting withdrawals, encouraging regular deposits, and earning interest on the savings, similarly to standard savings accounts.

What is a Westpac locked savings account?

The Westpac locked savings account (also known as "Westpac Life") can help customers reach savings goals faster through bonus interest. Customers receive 0.2 per cent standard base interest with a variable bonus rate of 0.35 per cent when the closing balance at the end of the month is higher than the opening balance.

There are some conditions to earn the bonus interest on Westpac's locked savings account, though. First, you’ll need to increase the balance each month either through a deposit or not making any withdrawals, and then link it to a Westpac Choice account and make at least five eligible payments using your debit card. Please consult your bank as to what an eligible payment is. 

What is an ANZ locked savings account?

An ANZ locked savings account locks your money and prevents you from spending. You may use a standard savings account as the account where your salary is deposited. You can then withdraw funds when needed, but aren’t able to make purchases with it. However, this account may not grow much as the continual withdrawing of funds will limit the interest you can earn.

With a locked savings account in ANZ, you know your savings will grow because you can’t access the money. You can also qualify for a bonus when you deposit at least $10 per month and don’t make any withdrawals. To help you with this further you can set up an automatic transfer from your regular ANZ savings or transaction account so you don’t forget to make a monthly deposit.

Your ANZ locked savings account offers you a base interest rate of 0.1 per cent per annum plus an additional bonus interest of 0.49 per cent per year. The interest is calculated daily and credited to your account on the last working day of the month.

How can I get a $4000 loan approved?

While personal loans and medium amount loans don’t offer guaranteed approval, there are steps you can take to help increase the likelihood of your application being approved, including:

  • Fulfilling the eligibility criteria (providing ID, proof of residency, proof of income etc.)
  • Checking your credit history (you can order one free copy of your credit file per year, and make sure that there aren’t any errors that may be bringing down your credit score)
  • Comparing carefully before applying (making multiple loan applications can mean having your credit checked multiple times, which can look bad to some lenders and reduce your chances of being approved by them)