Making sense of it all

Along with saving for retirement and buying a house, education is one of life’s major events and a critical investment parents, families and communities can make.

There are many options available to parents and individuals when it comes to saving for education. Selecting the right one can make a big difference in helping you reach your goals. 

For all but the wealthiest parents, there will be no one solution and funding the rising costs of education will require a combination of specific savings and finding the money from ongoing cash flow.

Like most parents you may find that you need more money during the final years of secondary education when education expenses are at the highest, and when you have multiple children in secondary and post-secondary education at the same time. 

But first, let’s share some things you need to factor into your decision making.

Top 5 considerations

  • What sort of education are you saving for? When will you need the money?
  • How disciplined are you with your savings? Are you the type who may get tempted to dip into your savings?
  • What is your appetite for risk with respect to investing?  Investing can be a long-term goal. Some years will have a good return and others may have a negative return. Make sure you select the investment that suits your own risk appetite.
  • What is your overall financial situation?  Saving for education is important, but affordability and prioritisation against other financial commitments need to be considered.
  • What is your personal tax situation? If you are on the highest marginal tax bracket, you may want to consider the most effective tax options. Are you investing in your name or that of your child? Consider this carefully as income derived by children can attract a high marginal tax rate.

Saving for education options at a glance 

A table comparing options for saving for education.

Saving for education a summary of the options

We have summarised the various options available to help you make the best decision for you.

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