The most recent thorough modelling on the cost of raising kids in Australia, released last year by AMP and The University of Canberra, found the cost of raising two kids in Australia for a family on a middle income will set you back $812,000. For a higher income family, the cost rises to $1.09 million from the time the kids are born to when they leave home.
(Reference news.com 21/08/2014)
Raising children has become a million dollar endeavor. Dancing, Soccer, Footy, iPads, brand name cloths and any number of extra activities cost parents some serious pocket money.
Education takes the most chunk – school fees have increased 50 per cent since 2005. With one in three kids now going to (costly) private schools, and even public schools requiring parents to provide expensive books and learning materials – how can the average Aussie family prepare?
Apart from paying off the mortgage, providing for the children’s education and social events is placing increasing demand on Australian family’s budgets. With record personal debt and negative savings, few families are adequately prepared.
So how can you prepare your children financially? One way is to open a savings account. But instead of socking away money into a general savings account, which may be raided sometime in the future, families need to set up a specific education account. The best way to do this is via an old-style investment insurance bond, which can be started with as little as $1000, held in trust for the child, and provides an incentive to regularly invest small amounts into one or a mix of assets classes. The kicker is the proceeds attract significant tax concessions, and are tax free if they are held for longer than 10 years.
There are many other advantages to investing in an insurance bond. Whether it is for education expenses or a deposit on the first home. Best of all you can start planning your children’s exit strategy to leave home financially secure.
Would an Insurance Bond suit you? To find our more, call GFP and make an appointment with a financial adviser on 4648 0431
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