What sacrifices are you making for private school education?
Choosing between private and public schooling is one of the biggest financial decisions parents face. While private schools offer high-quality education, smaller class sizes, and enhanced extracurricular programs, they also come with significant financial costs.
The key question for families is: What are you sacrificing financially by opting for private education? This guide explores the long-term financial impact of private school fees and how to balance education choices with broader wealth-building goals.
The Cost of Private vs Public Schooling
Average Schooling Costs in Australia
| School Type | Estimated Annual Cost per Child | Total Cost (13 Years of Schooling) |
|---------------|--------------------------------|-----------------------------------|
| Public School | $4,000 - $6,000 | $52,000 - $78,000 |
| Catholic School | $8,000 - $12,000 | $104,000 - $156,000 |
| Private/Independent School | $15,000 - $40,000+ | $195,000 - $520,000+ |
These figures do not include additional costs such as uniforms, extracurricular activities, overseas trips, tutoring, and technology expenses.
📌 Takeaway: Private schooling can cost 5-10 times more than public education over a child’s school life, significantly impacting long-term savings and investment potential.
What Are You Sacrificing by Choosing Private School?
1. Retirement Savings & Superannuation Growth
Every dollar spent on private education is a dollar not invested in superannuation or retirement savings.
Example:
- A couple spending $30,000 per year on private school fees for 13 years misses out on potential superannuation growth.
- If the same amount was invested in super or a high-growth investment earning 7% annually, it could grow to $600,000+ by retirement.
- This could fund an extra decade of retirement or provide financial freedom sooner.
📌 Consideration: Could lower school fees + extra tutoring provide similar educational benefits without sacrificing retirement security?
2. Home Loan & Mortgage Repayments
- Redirecting funds towards school fees instead of extra mortgage repayments can result in higher interest payments over time.
- For a $600,000 home loan at 6% interest, making extra repayments of $30,000 per year instead of paying school fees could:
✔ Pay off the mortgage 10 years earlier.
✔ Save over $200,000 in interest payments.
📌 Takeaway: Paying private school fees may keep families in debt longer, delaying homeownership goals or financial security.
3. Investment & Wealth Building Opportunities
- Instead of spending $300,000+ on school fees, investing that amount in shares, property, or ETFs could:
✔ Generate long-term passive income.
✔ Create a wealth fund for the child’s future (e.g., first home deposit or business investment).
✔ Provide financial independence earlier in life.
Example:
- Investing $30,000 annually into a diversified portfolio earning 8% p.a. could grow to $1 million in 20 years—enough to fund both higher education and intergenerational wealth.
📌 Consideration: Would a strong financial foundation for the whole family outweigh private education benefits?
4. Lifestyle, Travel, & Family Experiences
High private school fees may mean:
- Fewer family holidays or international trips.
- Less discretionary spending on hobbies, dining, and experiences.
- Delays in upgrading homes or vehicles due to tighter budgets.
📌 Takeaway: Life experiences outside the classroom can be just as valuable for a child’s personal development and worldview.
How to Balance Private Education & Financial Well-Being
If private schooling is a priority, it is still possible to balance financial security with education goals. Consider:
1. Planning & Investing Early
✔ Open an Education Savings Fund or Investment Bond to accumulate school fees over time.
✔ Use salary sacrifice into super to offset long-term financial impact.
✔ Consider a 529-style education fund alternative for structured savings.
2. Hybrid Education Approach
✔ Enrol children in public primary school and transition to private high school to reduce costs.
✔ Select mid-range private schools that offer strong academics without premium fees.
✔ Utilise extracurricular tutoring instead of full private schooling.
3. Consider Scholarships & Financial Aid
✔ Apply for academic, sporting, or needs-based scholarships.
✔ Negotiate flexible fee structures with schools.
✔ Explore Catholic or lower-cost independent schools as alternatives.
4. Balance Education with Family Wealth Goals
✔ Ensure school fees do not compromise retirement savings.
✔ Maintain extra mortgage repayments to avoid long-term debt.
✔ Continue building investments while managing education costs.
Final Thoughts
Choosing private schooling is a deeply personal decision that involves both educational priorities and financial trade-offs. While private education offers prestige and resources, it also requires sacrifices in savings, investments, and financial independence.
A balanced approach—blending education priorities with wealth-building strategies—ensures long-term financial security for both parents and children.
Need Help Structuring Your Finances While Planning for Private School? Speak with ActOn Wealth to create a tailored financial strategy that balances education, investments, and future financial security.
