Should I put $600K into my kids’ education or invest it?!

April 09, 2019 Should I put $600K into my kids’ education or invest it?!

Life’s all about trade-offs, particularly when it comes to financial goals.

Now, I’m not going to get into the whole public vs private school debate and which is better. Private schools are expensive – we know that. The financial trade-off is enormous.

To give you an idea, sending our two girls through six years of private education (high school, basically) will mean we’ll need to fork out around $600K. That’s a lot of money.

Add to that the evidence emerging with every passing year that the type of school you send your kids to doesn’t necessarily change your child’s educational outcomes on an individual level, and it definitely gives you a lot to think about.   

With that in mind, here’s a question for you: what else could I do with that $600k?

Here are the things that come to mind:

 

Pay off our mortgage

We’re firmly focused on paying down our mortgage as quickly as we can. If we diverted our investment strategy for funding our girls’ private education towards our mortgage, though, we could, in theory, pay down our house in no time. Sounds selfish, but it’s the first thing that comes to mind.

 

Set the kids up for their first property purchase

This one’s an interesting proposition, actually. Sure, the Melbourne property market has been taking a bit of a beating of late, but rest assured that, by the time my girls are ready to enter the property market, property prices in Melbourne will likely be astronomical. Diverting that money to a dedicated investment plan and letting it compound will give them both a solid foothold to buy property down the track.

 

Pay for private tuition

This is something that I’ve thought about a lot since my eldest was born. For the money you pay for a prestigious private school, what if you could supplement a solid education at a reputable public school with private, one-on-one tuition? That way, you could really hone in on your kids’ natural talents and address potential learning difficulties in a much more targeted way. Food for thought, anyway.

 

Move to a better area

By that, I mean buying a house in an area that has better public schools. And they’re around, particularly across Melbourne – there really are some fantastic public high schools out there with great reputations. The other advantage is living in an area that you like, as well as being closer to better amenities and whatnot. Kids’ education aside, this one’s also more of a lifestyle choice.

 

Educate your kids through travel

I’ve had a few friends moot this one a few times, actually. To travel with kids and giving them worldly experiences through travel and immersing them in different cultures might sound a bit out there, but it certainly isn’t something new. There are loads of different accounts of families who focused on taking their kids out of the work-a-day world for a period of time and spending time together travelling the globe.

 

Get the jump on retirement

It’s a given, but $600K would go a long way towards smoothing out our retirement and helping us maintain the lifestyle we want to live. Again, it sounds selfish, but the more you have in the kitty for retirement, the better, in my opinion.

While the ideas above are merely intended as thought-starters, if you’re struggling with any of the trade-offs, don’t worry – it’s hard. The point I was trying to drive home is this: ultimately, it really comes down to what’s more important in life and to understand why. We have a process for facilitating this exact conversation, which focuses on going deeper into your goals, life objectives and to understand why you want them so that they are easier to prioritise. Feel like you need to get a bit more clarity? Book in a 15-minute chat below, and we can go from there.

Disclaimer: all information contained within this article is of a general nature. It does not take into consideration your personal financial circumstances. Please consult a professional financial adviser (just like us ) when making a financial decision.


Michael Chew
michael@orangewealth.com.au

Hi, I'm Michael!I'm a Dad, writer and finance expert.My priority is making the most of what I have for my family and finding the balance between all of life's competing priorities.

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