Parents Financial Survival Guide to Higher Education
By AMP Financial Planner Peter Lake*
Most parents understand the costs involved in their children’s schooling but few are prepared for the added burden of helping with the expense of tertiary education.
The latest AMP.NATSEM report, What price the clever country?, found the cost of higher education and associated living expenses may mean parents need to take a much broader view of their child’s educational requirements – perhaps well into their 20s.
While the report outlines the long-term financial benefits of higher education it also paints a picture of the associated costs of studying – costs that go well beyond just course fees.
The AMP.NATSEM report found the average weekly expenses for a student living in share accommodation is $542 while their weekly earnings are estimated at just $326 from all income sources including Government benefits – creating a short-fall of $116.
This shortfall suggests that while some children might live away from home and have some form of employment, they still depend on their parents to prop-up their earnings just to get by.
The scenario is equally tight for dependant (living at home) full-time students who earn on average a meagre $192 from all income sources. Nearly two-thirds of all full-time university students, and those studying full-time in Vocational Education and Training (VET), fall into this category.
While some of these students are working, up to 35 hours in some cases, most are still relying heavily on parents to cover their costs of living with some support from Government by way of Austudy and Youth Allowance.
Furthermore sizeable portions of students are not working at all and, as a result, parents may be faced with a number of financial scenarios which, without a plan, may seem overwhelming.
In essence what the findings tells us is that education costs for parents now extend well beyond high school and need to be incorporated into a long-term financial plan. It is a reality that is unlikely to change into the future.
The good news is these are costs that, if taken into account early on, can be accommodated for as part of a comprehensive financial plan.
To create a flying start for you and your children consider these steps:
Start by identifying actual higher education costs so that you can gain a clearer picture of what you will need to accommodate. It is also wise to factor in the cost of living expenses to support your children to live at home as well. Remember while HECS is a deferrable debt – living costs while studying are not!
To work out how much money you could potentially set aside to help with your children’s education log on to AMP’s Budget Planner calculator* at www.amp.com.au Don’t delay start saving now. Once you have an idea of how much your children’s education will cost, you can then choose investments with your financial planner that offer the best potential to reach your goals. There are a number of options you can consider including education bonds and managed funds which can be set up to give you an automated monthly investment.
Talk to a financial planner. A financial planner can recommend the best way to ensure you have the funds available you need for education costs by providing personalised advice that takes into account your individual needs.
A full copy of this, and other, AMP NATSEM Income and Wealth Reports can be found at: www.amp.com.au/ampnatsemreports.
*Peter Lake is an Authorised Representative of AMP Financial Planning Pty Ltd, ABN 89 051 208 327, AFS License No. 232706.
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.
While the report outlines the long-term financial benefits of higher education it also paints a picture of the associated costs of studying – costs that go well beyond just course fees.
The AMP.NATSEM report found the average weekly expenses for a student living in share accommodation is $542 while their weekly earnings are estimated at just $326 from all income sources including Government benefits – creating a short-fall of $116.
This shortfall suggests that while some children might live away from home and have some form of employment, they still depend on their parents to prop-up their earnings just to get by.
The scenario is equally tight for dependant (living at home) full-time students who earn on average a meagre $192 from all income sources. Nearly two-thirds of all full-time university students, and those studying full-time in Vocational Education and Training (VET), fall into this category.
While some of these students are working, up to 35 hours in some cases, most are still relying heavily on parents to cover their costs of living with some support from Government by way of Austudy and Youth Allowance.
Furthermore sizeable portions of students are not working at all and, as a result, parents may be faced with a number of financial scenarios which, without a plan, may seem overwhelming.
In essence what the findings tells us is that education costs for parents now extend well beyond high school and need to be incorporated into a long-term financial plan. It is a reality that is unlikely to change into the future.
The good news is these are costs that, if taken into account early on, can be accommodated for as part of a comprehensive financial plan.
To create a flying start for you and your children consider these steps:
Start by identifying actual higher education costs so that you can gain a clearer picture of what you will need to accommodate. It is also wise to factor in the cost of living expenses to support your children to live at home as well. Remember while HECS is a deferrable debt – living costs while studying are not!
To work out how much money you could potentially set aside to help with your children’s education log on to AMP’s Budget Planner calculator* at www.amp.com.au Don’t delay start saving now. Once you have an idea of how much your children’s education will cost, you can then choose investments with your financial planner that offer the best potential to reach your goals. There are a number of options you can consider including education bonds and managed funds which can be set up to give you an automated monthly investment.
Talk to a financial planner. A financial planner can recommend the best way to ensure you have the funds available you need for education costs by providing personalised advice that takes into account your individual needs.
A full copy of this, and other, AMP NATSEM Income and Wealth Reports can be found at: www.amp.com.au/ampnatsemreports.
*Peter Lake is an Authorised Representative of AMP Financial Planning Pty Ltd, ABN 89 051 208 327, AFS License No. 232706.
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.
