Planning for your child’s education costs

One of the best investments you can make for your child’s future is their education; as such, providing access to quality schooling is a primary financial goal of many families. This commitment extends to young couples preparing to start a family in the future, as proximity to good schools is often a driving factor when purchasing a home to live in.

Whether you choose to enrol your child into public, private, or religion-based education, costs extend far beyond tuition fees, including things such as uniforms, technology, excursions, and extracurricular activities.

These costs are real and can come as an unwelcome surprise! The good news? With proactive planning, you can remain in control and make decisions based on what’s best for your child, rather than your bank account.

Would it shock you to learn that the average cost of putting your child through 13 years of schooling is over six figures, regardless of the school type? Here’s a snapshot of the average fees as of this year (2025). The table below highlights that costs can vary significantly based on where you are in the country. Even for public schooling, the six-figure cost highlights the importance of early planning.

Futurity Cost of Education Report 2025. Figures are inclusive of tuition and ancillary costs (uniform, technology, excursions etc.)

Don’t make these mistakes

Starting too late

Time is your biggest ally when saving or investing. The later you begin, the more you’ll need to contribute each year to reach the same goal. Starting early allows you to take advantage of compounding returns over time, essentially, your money working harder for you!

Blending accounts

Bundling your education savings with other savings goals, such as holiday savings, makes it easy to dip into funds unintentionally. A dedicated savings account or investment helps to maintain discipline and prevents your hard-earned savings from being eroded.

Ignoring risk or tax implications

Choosing an investment without understanding how volatile (risky) the investment may be, or how the return is taxed, could impact your outcome. Ensuring your investment strategy aligns with your risk tolerance and investment timeframe is crucial.

Common Strategies to Fund Education Costs

Savings Account

Starting a savings account is often the strategy most people default to, and rightly so. It’s quick and easy to set up, allowing you to start saving immediately. Although it does have its drawbacks, the glaring issue is access to the funds. Constant visibility and access to the account mean you’ll need discipline to avoid the temptation to spend. Another issue is the lack of growth potential your savings have when left in a simple savings account, which can significantly impact your outcome over the long term.

Investment Bond

An investment bond is a long-term investment structure that combines regular investing with some unique tax rules. Earnings inside the bond are taxed before being reinvested, meaning you don’t need to declare those earnings in your personal tax return each year. If the bond is held for at least 10 years, withdrawals may be tax-exempt under current rules.

Education Bond

An education bond works similarly to an investment bond, but it’s designed to help fund education-related costs. The money to contribute is invested, and earnings are taxed within the bond before being reinvested. When funds are withdrawn to pay for approved education expenses, certain tax benefits may apply.

Managed Fund or ETFs

Investing in Exchange Traded Funds (ETFs) or managed funds can allow you to easily achieve a diversified investment portfolio by spreading your money across a diverse range of assets, sectors, and markets. ETFs are generally low-cost and easy to make regular investments into, although not suitable for an investment timeframe under 5-7 years, as the value of the investment can rise and fall with market movements.

Offset Account or Redraw Facility

Directing extra money into your offset or towards paying down your home loan is less common but can be effective. Every extra dollar you put in effectively lowers your loan balance and interest charges against the mortgage. The trade-off is that these funds aren’t clearly separated from your home loan, so it can be easy to lose track of how much is set aside for education. Accessing the money may also involve fees or conditions, depending on your lender.

So, which one do I choose?

There isn’t a one-size-fits all option. The best savings strategy is the one that aligns with your investment timeframe, risk tolerance, and goals. As I have mentioned throughout this article, preparing for these costs is a long-term strategy; so don’t rush into a short-term solution. To determine which strategy is suitable for you, it’s best to seek guidance from a licensed financial advisor. A qualified financial adviser will be able to consider your individual needs and objectives to develop a strategy that’s tailored to you.

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The Money & Life website is operated by the Financial Advice Association (FAAA). The views expressed in this article are those of the author and not those of the FAAA. The FAAA does not endorse or otherwise assume responsibility for any financial product advice which may be contained in the article. Nor does it endorse or assume responsibility for the information.

The information provided in this article is general in nature. In preparing it, I did not take into account your investment objectives, financial situation or particular needs. Before making an investment decision on the basis of this information, you should consider how appropriate the information is to your particular investment needs and objectives. You should also consider the relevant Product Disclosure Statement before making any decision relating to a financial product.

Figures sourced from the Futurity Cost of Education Report 2025. GPS Wealth and its authorised representatives are not responsible for the accuracy or content of external information

Adrian Rubinich is an Authorised Representative (No. 001312434) of GPS Wealth Limited ABN 17 005 482 726, Australian Financial Services Licence 254544 (“GPS”). GPS is owned by Count Limited ABN 111 26 990 832 of GPO Box 1453, Sydney NSW 2001. Count Limited is listed on the Australian Stock Exchange.

Adrian Rubinich is a Financial Adviser at Propel Wealth Pty Ltd