Costs Of Schooling

Parents are encouraged to do their homework on the cost of education and to start preparing for the financial responsibility early 

More than a quarter of a million Australian children started preschool in 2007. A survey released by the Australian Scholarships Group (ASG) shows preschool parents can now expect to pay between $100,000 and $346,000 for their children’s formal years of education (preschool to Year 12) depending on the school choices they make for them.

ASG believes the survey is one of the most extensive undertaken in Australia to outline the costs of education parents can expect to pay for their children’s schooling from preschool to Year 12. Information was captured on more than 1200 children from ASG members who participated in the survey. They were asked to estimate the costs associated with tuition fees and levies, requisites, clothing, incidentals, and computer and Internet costs that they paid for their children in preschool, primary and secondary schooling at government, independent (denominational), and private centres and schools.

“Education is one of the major expenses associated with providing for children,” ASG’s general manager of communities, Mr Warwick James, said. “ASG’s  survey outlines the costs that parents can reasonably expect to pay for the education of their children in various education settings. The formal years of education from preschool to Year 12 represent the schooling stages that parents are fully responsible for regarding their children’s education, unlike the post-secondary stage of education, where parents are increasingly sharing the responsibility of paying for fees with their children in addition to paying for their costs of living and ancillary education costs.”

Included in the survey for the first time  were computer and Internet costs. It found that parents are increasingly providing for the costs of computer hardware and software, and Internet access for their children in primary and secondary school. These items now account for one of the major costs associated with schooling.
Computer and Internet costs includes computer hardware and software (eg. purchase or rental of desktop computer and/or laptop computer, software applications and programs, computer levies etc) and Internet access costs — at home and/or at school.

Education costs continue to rise steadily according to the Australian Bureau of Statistics. The education component of the Consumer Price Index (CPI) rose by 4.9 per cent at September 2006 compared to the same time in 2005. Preschool and primary education rose by 7.1 per cent, secondary education rose by 6.9 per cent, and tertiary education rose by 2.4 per cent (the smaller increase largely due to the removal of Student Union Fees).

The Formal Years of Education Costs Survey findings follow another ASG survey, Saving for Children’s Future Education, that revealed 67 per cent of Australians are failing to save for their children’s future education, although 86 per cent of people with a child or grandchild under 10 years believe it is important or very important to do so. Saving for Children’s Future Education has also shown that among an estimated 3.3 million Australians (weighted) with a child or grandchild under 10 years, only 33 per cent have any financial arrangements in place to provide for their preferred education choices.

“Whether parents choose government, independent (denominational), or private education for their children, ASG’s survey shows there are substantial costs involved,” Mr James said.

ASG has prepared its Top 10 Tips for parents wanting to maximise their education savings, to help parents plan for their children’s education costs and make their education choices more affordable. These tips, based on planning, involve small family sacrifices that can make a big difference to a child’s future.

How to shop smart for back-to-school costs and save

The Australian Scholarships Group’s Back-To-School Smart Shopping Tips can help families negotiate the financially stressful ‘back-to-school’ period.

“Feedback from ASG’s members indicates preparing their children for Back-To-School is financially stressful because it comes straight after the holidays and the gift-giving period, when the credit card bills arrive, so requires careful budgeting for education expenses. These expenses include school tuition fees and levies; requisites; uniform and clothing requirements; incidentals; and computer and Internet costs,” ASG’s  Warwick James said.
ASG’s recommended steps to saving on Back-To-School costs:

1. Getting organised is the best way to control your finances
• Use lists and plan — start sooner rather than later.
• You are more likely to avoid overspending if you are organised.
• Identify your expenses for each of your children, including school tuition fees and levies, requisites (stationery, textbooks, school bag, art and craft materials, sports and music equipment), clothing (summer and winter uniforms, sports uniforms, and any other clothing items) incidentals (outings, camps, private tuition, music lessons and instruments, coaching, gym/drama/art/dance classes, travel and commuting) and computer and Internet access costs (for example, the purchase or rental of a desktop computer and/or laptop computer, software and programs, computer levies, and access to the Internet at home and/or at school).

2. Prioritise your needs and expenses
• Classify the expenses into groups — those ‘must-haves’ required now and those that can be deferred. Ensure they’re genuine needs rather than wants.
• Sometimes, it’s helpful to negotiate items
in these groups with your children so that they can understand that compromise in
one area can lead to rewards in another, such as holidays.
• Cover the immediate and essential items first, along with the high-ticket items and postpone any purchases you can.
3. Plan how to meet your goals through preparing a budget
• Having assessed the school needs of your children, develop a budget for each and stick to it.
• Ensure your budget is realistic.
• By involving teenage children in the budgeting process, you’ll encourage their financial awareness assisting them to handle money responsibly in the future.
4. Assess what you already have that can be recycled for different purposes and children
• Check what you already have that can be used from the previous year before you hit the shops.
• Recycle outgrown, but still usable items, for others in the family or for charity.
• Check around the house to see if anything can be transferred from one use to another.

5. Focus most of your shop-smart energy on your highest cost items
• Uniforms, computers — both hardware and software purchases, and Internet access,
and textbooks tend to be the higher cost items for most families — it’s worth placing more emphasis on how to save on these major purchases.
• Uniforms — shop around. Consider buying the more expensive items, such as blazers, secondhand through school exchanges or co-ops or online. Put off purchasing all the uniform requirements at the beginning of the year — buy the winter uniform later. Reduce the number of items you buy as part of your child’s school uniform, such as shirts and launder more frequently. You can purchase additional items as the school year progresses, if needed. Buy the more costly uniform items a size or two larger to allow growing room for your child. The purchasing of required uniforms can represent one of the most costly areas of expenditure especially for children attending independent (denominational) or private schools where choice is largely restricted.
• Computers — Many schools require their students to have laptop or notebook computers. This can be expensive  as computers are one of the most costly
back-to-school items and can have a short-term life because the technology is often superseded very quickly.
• Many schools have computer rental packages that may prove a more prudent method of supplying your child with a laptop and enable you to spread the payments over the year.
• Compare online laptop computer packages with the school recommended models to ensure value.
• Although initially more expensive, a laptop can offer your child greater flexibility — it can be used both at home and at school.
• Check the specifications of the school’s suggested laptop as you may be able to hand down your current laptop to your child and upgrade your own model.
6. Shop smart by shopping around
• Buy it new cheaper at discount stores or online, buy it secondhand, or swap.
• Check out discount stores for great value everyday items — you’ll find lots of discounts at the back-to-school sales at the discount chains but a visit to your local ‘cheap shop’ may also prove worthwhile.
• Consider buying from several different stores as their advertised specials may represent a great buy, but their prices on other goods may not.
• Join with other parents in your area and buy in bulk — this can reduce costs to almost wholesale prices.
• Check out online purchasing options — more and more parents are becoming astute buyers using a variety of options available for purchasing new goods and access to the internet is making savvy buying available.
• Investigate secondhand bookstores, library and garage sales, school exchanges and co-ops, local newspaper advertisements and eBay (www.ebay.com.au) to purchase secondhand school goods for your children.
Some people think buying second-hand has a stigma attached to it, but shopping secondhand reduces consumerism, can be great fun and is now one of the world’s largest growing trends, as shown by the success of eBay.

7. Becoming more financially savvy and encouraging the development of financial responsibility among the family is essential for meeting long-term education goals
• Check shops’ return policies and/or guarantees before buying.
• Weigh up quality versus price. An item isn’t a bargain if it falls apart after the first use.
• Go easy on the credit cards or savings you make will be eaten up by credit charges.
• Record your spending and save your receipts so you can budget better for next year. ASG provides a range of education savings programs that help parents plan for their children’s future education using the benefits of collective mutual pooling, beginning from as little as $11 per week. If started before a child’s first birthday, this small weekly contribution can grow to a total benefit amount of more than $22,000.

ASG recommends involving all the family in Back-To-School preparations and making bargain hunting and smart shopping fun for each family member. “This way, families can avoid ‘back-to-school blues’ and a major slug on the hip pocket,” Warwick James said. “It’s a subtle way of introducing or reinforcing budgeting skills and financial responsibility in children — two really valuable skills for adulthood.”
For more information about ASG, phone 1800 648 945 or visit: www.asg.com.au