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Today more than ever you owe it to your children to ensure they get a good education. However the more you earn to assist that aim, the less support you get. Child care rebates stop when your family income hits $138,065 with 1 child. Family Tax benefit Part B ceases when your combined family income exceeds $150,000. This equates to an after tax income of $106,550 or $2050 per week. Out of this you need to pay a mortgage, pay all education costs and support your family. It is almost a poverty trap cycle. With tax entering the equation, the more you earn the less you have. The less you earn, the more support you get, but you still don’t have sufficient to cover your needs.
I suggest families take control of the family’s education needs by doing the following:
a) Calculate how much you will need and when. Be realistic.
b) Establish a separate bank account titled “Education Fund” or something similar.
c) Ensure all Centrelink family support payments are directed into this account.
d) Set aside a fixed amount per week to go into that account, depending on what you will need and how long you will have to save. But start with say $50.00 per week. If you don’t have it to spend, you won’t miss it. Get your employer to pay this direct, if they can.
e) Put all tax refunds into your “Education Fund” including the education rebates that you will receive if your children have already started school.
f) Tell your relatives, parents and others you have this account and it is for your children’s (their grand child’s) education. You will be surprised how supportive family members can be to help you create this reserve fund. All birthday “cash” gifts should also be deposited into this account. If family members know this is what you are doing, they will might even give you more, or a little booster payment to get things moving.
g) Now use what Albert Einsten described as “the greatest mathematical discovery of all time” the power of compounding. Let the interest continue to add to the principal so you receive interest on interest.
Using time your “Education Fund” nest-egg will accumulate and if you do your math right you will have enough to cover those hefty private school fees that will give your children the start in life they need.
