|
COPYRIGHT 2003 Australian Consumers' Association
All they need is love ... and around $450,000 is the title of a recent report about the financial pressures on a family with two children.
Specifically, parents may find it hard to grasp the rising costs of education for their children. Figures from the Australian Bureau of Statistics (ABS) show costs for education are currently rising by around 5% annually, much faster than the inflation rate (around 3%). The worst cost increases affect younger children and toddlers: preschool and primary education costs went up by about 7% and childcare is rising by a staggering 17.6% a year.
To meet these and other costs, budgeting and saving are important. A variety of investments are suitable for saving for children:
* Education savings plans.
* Managed funds.
* Friendly society and insurance bonds.
* Paying back your mortgage quickly.
If you have a mortgage with a redraw facility, consider using it for your savings. This gives you a tax-free return of currently around 6.5%, which compares well with most other investment options. But you need to be very disciplined, stick to your savings plan and not use the money you've saved for other things.
EDUCATION SAVINGS PLANS
These are offered by two friendly societies:
* The Australian Scholarships Group.
* Australian Unity.
The savings plan by the AUSTRALIAN SCHOLARSHIPS GROUP (ASG) works more like an insurance policy than an investment, as the investment earnings only benefit children who go on to further education.
Put simply, ASG pools the money contributed (on average around $15 a week) and treats it as an interest-free loan, investing it in a balanced investment portfolio, which includes share investments.
While around 80% of children...
Read the full article for free courtesy of your local library.
|
Bookmark this article
Print this article
Link to this article
Email this article
Digg It!
Add to del.icio.us
RSS
