Education Funding, Start Early
Many of us want to give our kids the best opportunities in life, and for a large cohort of the population that means private education. So how much does it cost? and are there ways to improve the affordability of this method of education?
Private school education can cost $20,000 a year, but it can also range up to a figure around $50,000 a year. So for the 6 years of high school for example that is $120,000 to $300,000 that you would need to find to have your child attend the desired school. While there are discounts available for multiple children, you would essentially be multiplying these numbers accordingly also.
Assuming that you think you will fund this from your household cash flow, and your marginal tax rate was 47%, you would need to earn $37,735 before tax, above your general living expenses to afford the $20,000 required, or $94,339 before tax to afford the $50,000 per annum.
There are multiple factors that go into the above. What are your families living costs? if these are reasonably low, then the earning requirements would drop. Are you a single income family? if so your earning requirements would increase.
What if we told you that if you started saving at age 2, with as little as $1,000 initially and $720 a month, until your child started year 12 you would be able to afford the $30,000 a year required? That is $8,640 a year, or $16,301 of earnings before tax per year. All while doing so in a tax effective way.
Start early, find a trusted adviser who will assist with planning for all of your financial goals, and one that will educate you on your options.
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Disclaimer: this information is of a general nature and should not be viewed as representing financial advice. Users of this information are encouraged to seek further advice if they are unclear as to the meaning of anything contained in this article. Prosper accepts no responsibility for any loss suffered as a result of any party using or relying on this article.