The big expenses don't end when kids start uni
When my oldest daughter finished school I assumed my big expenses were over. What was I thinking?
University, I have discovered, is a whole other series of costs. The list includes university fees, transport, computers, internet, textbooks and stationery. If your kids study away from home, living costs can include halls of residence or rent in a shared house, food, groceries and utilities.
How do you pay for university costs? Students can use the government loan scheme and defer the university fees with the HELP scheme and pay the loan back when they start working and paying taxes.
But most of the other costs must be paid upfront.
Of course you want your kids to study for higher qualifications so you must remind yourself that the earnings power of a university graduate is $1.5 million more over their working life than someone without those credentials, says John Velegrinis, CEO of Australian Scholarship Group.
Once your kids leave school, they can work part-time during their course and in their long summer holiday to offset some of the costs. While the costs are nowhere near those in the US, students pay around $10,000 a year for accounting, law, veterinary science and medicine degrees or around $6000 a year for a nursing, journalism, teaching or psychology degree.
Australian Scholarships Group, which offers savings plans for parents to fund high school and university costs, has worked out what parents can expect to pay in the next 10 years. It found degrees will cost an average 50% more.
The $9792-a-year degree will cost $15,545 in 2023 and the $6000-a-year degree will rise to $9315 a year in 10 years. ASG estimates students living at home currently cost parents around $11,336 a year, not including the course fees. A three-year course costs $34,528, while you can expect to pay $46,397 for a four-year course.
In 10 years ASG estimates living costs to hit $13,365 a year, adding up to $40,840 for three and $54,967 for four.
Living at home is the most affordable way to go to university, at less than half the cost of moving away from home. ASG found sharing a rental property and living expenses costs around $26,000 a year. Three years of living away from home will set you back $81,447 and four years adds up to $110,444. A decade on, sharing a rental property will be $37,804 or $118,069 for three years and $160,702 for four years.
If you thought, like me, that it will all get a lot easier when they finish school, you need to take this on board.