Public vs Private School: The Real Costs, Trade-offs & How to Plan with Alex Luck

Thinking about sending your kids to private school or wondering if public might be the smarter choice? 🎒 In this episode, Molly sits down with financial adviser Alexander Luck from Everest Wealth to break down the true costs of education in Australia.

We cover:

• How much private vs public schooling really costs (spoiler: it’s not just tuition)
  
• Common budgeting mistakes parents make when planning for school fees
  
• Smart ways to start investing early to cover future education expenses
  
• The hidden extras: uniforms, excursions, tech, and more
  
• Whether elite schools are really “worth it” compared to public options
  
• Trade-offs families face, like retiring earlier, paying off the mortgage, or funding big holidays instead of fees
  
  

Alex also explains how education bonds, trusts, and smart tax structures can help families prepare, plus tips for minimising back-to-school costs (like second-hand uniforms and buying supplies early).

If you’ve ever wondered whether private school is worth the six-figure price tag or how to plan ahead so school fees don’t derail your family finances this one’s for you.

Want to speak to Alex or the team fill out this form.

This episode is brought to you by InvestorKit, Australia’s #1 Buyers Agency for 2023 and 2024. They specialise in helping investors find high-growth properties utilising industry leading AI and data driven research process across Australia. 70%+ of the properties they purchase are off-market and they have consistently outperformed national average capital growth rates by over 49%. Whether you’re looking to build your property portfolio or secure your first investment. Check them out here.

CHAPTERS

00:00 – Welcome to Get Rich
01:16 – Private vs Public: What’s the Real Cost?
01:52 – Meet Alex Luck (Everest Wealth)
02:24 – Values First: How to Choose a School
03:25 – “Public Is Free”… Not Quite
04:02 – Private School Sticker Shock
05:39 – Don’t Get Caught Short: Plan Early
06:35 – Picking Schools & Using the Highest Fee as Your Base
07:49 – Invest for It: Simple Numbers That Add Up
10:21 – Education Bonds, Trusts & Tax 101
11:57 – The Hidden Costs: Uniforms, Tech, Camps
13:39 – If Kids Are ‘Someday’, Start Now Anyway
14:33 – Trade-Offs: Europe Trips, Mortgages & Retiring Earlier
16:48 – Biggest Mistakes We See in School Budgeting
18:04 – City vs Regional: Massive Price Gaps
18:27 – Community Hacks: Second-Hand & Stationery Smarts
19:29 – Final Take & Where to Find Alex

LINKS AND RESOURCES

Reducing back-to-school costs - Moneysmart.gov.au
ACARA - Compare schools by location and results.
Child Care Subsidy | myGov - Eligibility, rates, and how to apply.

CONNECT WITH ALEX LUCK

Website: https://everestwealthgroup.com.au/
LinkedIn: https://www.linkedin.com/in/alexander-luck-1a47785b/
Facebook:https://www.facebook.com/EverestPW/
Instagram: https://www.instagram.com/everestwealth/

CONNECT WITH LADIES FINANCE CLUB

Join our free Facebook group - Ladies Finance Club Money Chat
Website: https://www.ladiesfinanceclub.com/
Instagram: https://www.instagram.com/ladiesfinanceclub/
LinkedIn: https://www.linkedin.com/company/ladies-finance-club/

TAKEAWAYS

• There is no right or wrong choice between public and private schooling; it depends on personal values.
• The cost of private schooling has significantly increased, making financial planning essential.
• Even public schooling incurs costs that families should consider.
• Planning early for education costs can ease financial burdens later.
• Investment strategies can help fund education, including trusts and education bonds.
• Additional costs like uniforms and excursions can add up quickly.
• Families should consider the social implications of schooling choices.
• Budgeting for education requires understanding all associated costs, not just tuition.
• Financial advice can provide clarity and help families make informed decisions.
• Investing early can provide a safety net for future education expenses.

SOUND BITES

"The average cost of schooling is rising."
"There are many hidden costs in education."
"You are going to pay more for private school."
"Seek financial advice for better planning."

TRANSCRIPT

[00:00:00] Molly: Welcome to Get Rich, the podcast that helps you do just that. Get rich and stay rich. Hey, I'm Molly Benjamin. I'm the founder of Ladies Finance Club, one of Australia's largest financial education platforms for women. But before I started helping thousands of women take control with their money, I was a hot financial mess when it came to my own finances and not the fun kind of hot, more like crying in a supermarket, wondering where all my money went kind of hot.

[00:00:29] But here's the thing, if I can go from financial mass to owning a share portfolio, investing in property, and building wealth. Then you can too. My mission is simple to make women rich because when we have financial freedom, we have choices, confidence, and control over our future. Every week on Get Rich, I sit down with some of the best experts in the industry to break down how we can all start investing, growing our money, and creating long-term financial security without the jargon, boring bits or overwhelm.

[00:01:02] Because when women get rich, we don't just change our lives. We change the world. So if you're ready to start making some smart Money moves, hit that subscribe button and let's get Rich together.

[00:01:16] Hey guys, welcome back to another episode of Get Rich. Now, ever wondered if private school is really worth the price tag? Or if public schools can give your kids just as good an education without the six figure cost. So in this week of Get Rich, I sit down with financial advisor, Alex, luck from Everest Wealth to unpack the true cost of education in Australia and the numbers that might surprise you.

[00:01:38] Alex also explains education, bonds, trusts, and clever tax structures to help families plan ahead. Plus simple hacks like secondhand uniforms and buying supplies early. Let's get into the episode now. Alex, welcome to the podcast.

[00:01:52] Alex: Hey Molly. Thanks for having me.

[00:01:53] Molly: So as mentioned in the intro, we're talking all about private and public schooling.

[00:01:59] Now, obviously in Australia we've got those two systems and one private, you know, that's not paid by the government, so it is a lot more expensive to send your kids there. And then we have a public system in Australia, which is very good as well. So what are some factors that we can think about when we're making that, I guess.

[00:02:18] Decision and that financial decision to send our kids to one or the other. 'cause it does have a big impact on you.

[00:02:24] Alex: Yeah, absolutely. I think, yeah, I guess to start the, the top of this, uh, this discussion today, you know, I think ultimately there is no right or wrong answer. It comes down to your own Yeah.

[00:02:34] Personal values and yeah, I guess what you, the value you put on private school or on government school or on other factors, which we'll obviously talk about. But it is definitely a, um, a rising cost. That is occurring for a lot of people with, um, you know, young families or obviously high school aged kids.

[00:02:50] And I read, uh, when I was doing a bit of research for this, I think the, um, the cost of private schooling has gone up something like 88% since 2010 or something like that. So it's been a significant. Increase. So, which makes this then, I guess, even more topical because it's obviously now an even larger financial decision that a, a family would have to make if they do decide to go down the, the private schooling route.

[00:03:14] Molly: Because even if you are going public, there's still costs involved, isn't there? Like, I mean, kids are just expensive in general, but people go, oh, well it's public, it's free, but there are still costs.

[00:03:25] Alex: Yeah, absolutely. So, um, again, doing a bit of, yeah, research for today. I found in, yeah, this was from 2022, 13 years of, of schooling, even in the government system on average is gonna cost you around 90 grand over that period of time.

[00:03:40] Molly: Wow.

[00:03:41] Alex: Put the, comparatively to the average cost of an independent private school. 'cause most states will have, uh, independent, private school, Catholic, and then government. So we were all sort of distinguish between the three. Yeah, the, the independent private school in a major city, which is often where I'll be referring to some of the stats that I'll put out as well, was about, yeah, $330,000.

[00:04:02] So more than three times the cost. But yes, there is a lot of costs still with, with government schooling. Again, I'll try just, just stats the whole time, but there's another good article, say 2025, the, the back to school costs. Uh, yeah, we're gonna inject it up. 13.6 billion back into the economy. People are gonna spend so, uh, wow.

[00:04:21] A significant industry and yeah, there are significant costs. With schooling, whether you go Yeah, the government or or private route these days,

[00:04:30] Molly: and this is more just me being curious because you talk to so many people about so many money, so much, you talk to so many people about finances all the time.

[00:04:39] I'm interested, do you see people getting themselves in trouble because they're gone? Okay, we are sending our kids to a private school, but then they actually haven't understood the full financials and now they're like, oh. God, this is really expensive. Can we afford to keep this up?

[00:04:55] Alex: Yeah, I've, I've had a few, um, instances, not, not heaps, but I've had a, a couple of instances over the years with clients where, um, yeah, they have gone to private school en route and then maybe haven't necessarily.

[00:05:08] Yeah, thought it through, I guess the, the ultimate impact of that. And then, you know, it is sucking up a lot of their, their take home pay to, to keep those, uh, to, to, to continue to pay those tuition fees at that sort of schooling. So I think it is, uh, and they obviously then the last thing they wanna do is be you pulling kids outta school as well.

[00:05:24] So it is, um, very, yeah. Important to as much as possible. Yeah. Do, um, some pre-planning, particularly if you are thinking obviously, um, yeah, again, the, the private school route, because it is gonna cost. A fair bit more than the the government option.

[00:05:39] Molly: So going into that planning, how can we do that as a financial advisor?

[00:05:44] Obviously this is just information education, not advice, please see our disclaimer. But as someone who's going, okay, I think I wanna send my kids to private school, what can they do now to make sure that when that time comes, if they're like a few years off, they're gonna be in a, a better financial position?

[00:06:03] Alex: Yeah. So. In a perfect world, which I think a lot of the time if you're having kids, generally where you're living is generally where you're gonna be staying longer term. Okay. Not always, but generally. So you're generally gonna have an idea of obviously the area that you're in, so therefore you're gonna know which schools you potentially have access to as well.

[00:06:19] So when, you know, when we work with you, you know, you sit down and sort of, you have that conversation, like, do you have a potential school in mind or multiple schools in mind? Um, if it is multiple schools, we will then. Use the fee schedule of just the most expensive one. So we've, so we've obviously covered that off.

[00:06:35] And then ultimately, yeah, the earlier you can then plan to potentially in incur these, these costs for the, for the schooling. Um, the easier it will be then to, to fund these costs when they do come up. So, you know, we talk about basically the, the earlier or the more on the front foot you can get to begin with the, the easier it will be because, you know, some of those.

[00:06:54] Top end sort of, I guess, more elite private schools where you'll pay anywhere from 20 to up to 50 grand. I think one goes for these days in New South Wales. Um, you know, that's a, that's a lot of money. And remember that's, that's after tax dollars as well, so mm-hmm. There's no tax deductions unfortunately for private schooling fees in, in most instances, unfortunately.

[00:07:12] So that's a lot of money that you have to pay.

[00:07:15] Molly: Yeah. So I guess if someone's going, okay, great, no, we've decided we do wanna do. Private school, it's gonna be X amount per year. Is that when you guys would look at, okay, what can we invest in? Or is there a fund or a trust or education bonds? What would kind of be some of the options people can look at?

[00:07:38] And obviously we have done a podcast recording with how to invest for your kids, which you can definitely check out with Daisy. But I guess if they haven't listened to that, what are some things they can be thinking about?

[00:07:49] Alex: Yeah, so again, the earlier you can start, the better. So again, to just throw out some hypothetical numbers.

[00:07:56] Let's say, yeah, you've decided on private schooling. You want to go sort of mid-tier private school, so let's say 10 grand a year or thereabouts. So I think, which will be above the median. I think the medium for in independent, don't quote me on this from what I read the other day, I think it was about seven and a half.

[00:08:12] So a little bit above the medium. Uh, that's across the country by the way. So say you put down five grand when the child is born, uh, initially, and then you invest 500 bucks a month in just say, a, a broader market, um, sort of a stock market index. So averaging sort of 9%. And a lot of it gets, the conversation that we'll have for clients as well is around like, do you wanna do private schooling for their entire schooling?

[00:08:34] Mm-hmm. Or a lot of the time people will do. Public school for primary and then private high school. So let's take this example of doing private high school. You invest that consistently for the first sort of 11 years. So now they're about to turn 12 and go into high school and you would have approximately $130,000 at that point in time based on a 9% return, which then would more than cover the tuition.

[00:08:56] So you could stop at that point in time. And that's easily gonna cover the tuition of say that hypothetical school. So, Hmm. Now coming back to your question around like is there other structures or things that you can do as well, again. Thinking about tax is obviously important. So potentially putting that investment structure in a, in a trust may be beneficial because you may have a situation in your partnership where one person maybe earns more than the other, or it fluctuates.

[00:09:23] So one year, one person's earning more and the next year the other person is, so that's where a trust could potentially be beneficial because you can then direct those earnings to the, the lower income earner for that year, as an example. If you've got a partnership situation where one person is you believe they're always gonna earn more than the other, or the other person doesn't work or something like that, then yeah, potentially putting it again, the lower, the lower tax earners.

[00:09:45] Um, so lower, lower income earners name, uh, would make a lot more sense there as well. So yeah, being smart with the structuring is important. And then, yeah, the final thing that you alluded to there was obviously the, um, the education bond now. Yeah. I believe you did. You did another podcast on that, which did a bit more of a deeper dive.

[00:10:01] Molly: Yes. 'cause I Daisy told me that the education bond is different to a normal bond. And not to get those confused. 'cause I was like, is that like a government bond? She's like, no, it's nothing like that. I'm like, okay.

[00:10:12] Alex: Yeah. So yeah, it is annoying that they call it a bond because I

[00:10:15] Molly: know, I'm like, there's so many words in the world, guys, come on.

[00:10:18] Come up with some different terminology.

[00:10:21] Alex: So when you hear someone referring to as an investment bond or an education bond, that is a tax structure. And when we say tax structure, it is simply. So like your own name is a tax structure, right? So when you go to invest, you can invest in your own name, you can invest in an education or investment bond.

[00:10:37] You can invest in a trust. Your superannuation is a tax structure. So that's what we're talking about there. Okay? And then, then you pick the underlying investment within that structure. So I might go and invest in, you know, the top 200 as SX, which is the top 200, you know, publicly listed companies on the Australian stock market as an example.

[00:10:55] So where the, um, the education bond comes in. Coming back to that again, that is a form of an investment bond. Okay. Which may allow, okay. So you should seek financial advice here, uh, and education costs to be tax deductible within the structure. Okay. So it's, yeah. I'll be honest with anyone that's listening is, uh, it's not always quite as good as that Sounds Okay.

[00:11:19] It is. It can be good in some situations, but it's definitely not a. Cool. I'll just put money into this and then my private school fees will now be tax deductible sort of situation. Yeah. So yeah, seek some advice on that. But that can be, again, with the proper planning generally, that can work out as a half decent, uh, option of again, just helping minimize some of the costs to a degree.

[00:11:39] Molly: Yeah. Great. And what are some other additional costs that we can factor into our decision? Because I know, like, I guess whether you go public or private, you still got uniforms. There's. Excursions technology. Are there any other factors that. Might influence our decision.

[00:11:57] Alex: Yeah, absolutely. So I think again, when we have, uh, you know, when people come to see us and we have these conversations and maybe they are thinking hypothetically and more, one of the more of the elite, um, sort of private schools, um, as an example, you know, what you've gotta bear in mind then is that generally people going to those schools, you know, like their holidays maybe in.

[00:12:17] In Europe every summer as an example, which is, which is, you know, out of touch for, you know, for most people. So, mm-hmm. We sort of have those conversations around like, you know, have you sort of thought about that? Like whilst you could potentially afford the, the tuition fees and stuff like that, like socially, you know, do you think that's gonna be a good situation to potentially put your child in well's?

[00:12:34] Something to factor, obviously. Yeah. And then as you mentioned, there's obviously. It's not just paying tuition fees, there's school camps, there's, um, you know, these days everybody needs a laptop. An iPad. Yeah. Uniforms are generally gonna be a lot more expensive with private schools as well than, than public, um, as well.

[00:12:51] But yeah, to put I guess some sort of numbers on it, again, taken from this, this finder article that I was reading. Yeah, so the average annual. School cost per student. This is for secondary?

[00:13:03] Molly: Yeah.

[00:13:03] Alex: Okay. And this is across all governments, independent, private, and Catholic. Private as well. But you're looking at say on average 2,200 bucks for the tuition fee.

[00:13:14] Okay. Yeah. But then you've got another 1200 in schools supplies over that year, and then another 1700 in other costs, which would be like excursions, school camps. Those sort of things, which are uniforms, um, which will, you know, obviously come up and, and they need it as well.

[00:13:31] Molly: Wow. So it's like if you think you might even moderately maybe have kids in the future just start investing now?

[00:13:39] Yeah,

[00:13:40] Alex: I think, yeah, I think so. Like, I think, like I said, the. We can't plan everything in our lives. No. Yeah. Obviously if you intending to have kids or you've just had kids or something like that, and you think private school may be something that you may want to consider in the future.

[00:13:52] Molly: Yeah.

[00:13:52] Alex: The earlier you sort of start the better and then, you know, you can always pivot that, right?

[00:13:56] So say you start an investment and you thinking private school, but then you end up Yeah. Not doing it because I know for example, uh, my partner, she, um. Her parents had her down to go to a relatively expensive independent private school, but she just didn't want to go. So she ended up, uh, going to the local public school instead.

[00:14:14] And yeah, she had a great experience there as well. So, but they had obviously geared themselves up to spend that cost. But didn't, didn't have to for, 'cause she basically refused to go, so

[00:14:24] Molly: they just got really good holidays for the next 10 years.

[00:14:27] Alex: Yeah, that's right. So I mean, that's, that, that's probably what we haven't touched on, uh, yet, is around, I guess, that, that trade off.

[00:14:33] Right. So, yeah. Okay. Because just going to the most expensive school doesn't mean you're gonna get the best result. Like that's, that's been done many times. It does. Obviously, I think. Open up potentially some other opportunities, but it doesn't, you know, it doesn't directly correlate to academic performance or future wealth or career or something like that.

[00:14:52] Molly: Yeah.

[00:14:53] Alex: If, if you simply go there. So that trade off, right? You know, 330,000 approximately over th is. Over 13 years that I was sort of talking about before versus 90, you know? Yeah. 200 and what, 20 odd grand or so. Um, that's some pretty decent holidays over that period of time as well. Right? Or a decent chunk off your mortgage.

[00:15:12] Yeah. Or could be,

[00:15:13] Molly: well it might be the ma a difference between retiring what, like five, 10 years earlier.

[00:15:18] Alex: Yeah. And that's, that's some of the points I wrote down. I think the real trade offs are, yeah. Potentially other family experiences. So that's just like holidays. Reducing your, your mortgage quicker or Yeah.

[00:15:27] Potentially being able to retire, I know, five to 10 years earlier as well. Yeah, because that would de definitely be, be a factor. So. It's important to think about those things.

[00:15:36] Molly: Yeah, I know for one year my parents took us out of school. We traveled around the world and mom just homeschooled us 'cause she was a teacher.

[00:15:43] And then we came back, I think it was year 40 to year five and we were in front of the class. So I was like, I think they just used our school fees on travel from the year. So that was great.

[00:15:54] Alex: Yeah. There you go. And then did you, were you, did you attend private school or did you go public school or a bit of both?

[00:15:59] Molly: I did. I did a little bit of both. So like preschool I did. Public and then I went into, um, private school.

[00:16:05] Alex: Yeah.

[00:16:06] Molly: But I look at my friends now. Half of them went public, half of them went private, and there's no difference. So, yeah,

[00:16:13] Alex: I, I would agree. My, yeah. Personal experience. I went, uh, public for primary and then went private for high school and I've, yeah, still got friends that, um, that did both all the way through.

[00:16:23] And yeah, I wouldn't say there's any sort of, again, correlation between no success and what I can say,

[00:16:28] Molly: it's very much down to that individual. So I would love to know, I mean, we touched on it earlier, but what are some common mistakes people make when budgeting for private education? Is it that they just don't budget enough or they don't have a full understanding of all the costs, or is it anybody not getting good advice?

[00:16:48] Alex: I think it's a bit of, a bit of both of all those things and some of the things we've already touched on, but to sort of, I guess, surmize it. Yeah, relatively simply, it's, it's often yet not starting or planning early enough. So again, not thinking about it when there's obviously lots, lots to think about when you do have a brand new baby and stuff like that.

[00:17:05] But the earlier you can sort of. That school sort of conversation or those, those thoughts around what you may want to do? Yeah, the better because again, you can, um, it'll, it'll, it'll cost you less and less effort to, to then build the, the school fund hypothetically. And then I think as you've touched on as well, it, it's not thinking about all the other costs.

[00:17:22] So just, just simply focusing on like, yeah, that school's $15,000 a year. That's all we need to factor in. But as we've sort of gone into some of the numbers today, you can. Not so much double it, but like say in that instance, you'd probably add another 10 grand for uniform school camp excursions, so it's not 15 grand a year.

[00:17:39] It's actually 25 grand a year, so.

[00:17:41] Molly: Mm-hmm. Yeah. Gosh, that is a lot. I know. Even just like, obviously as you mentioned before, like Capital City versus Regional Australia. I grew up in regional Australia, so sending kids to regional Australian private school looks very different to sending them to like a school, a private school in Sydney.

[00:18:00] Huge difference. Yeah. Is kind of crazy there. The most,

[00:18:04] Alex: I think it was the, um, yeah, the most expensive, independent private schools were in New South Wales. The most expensive government schools were in Victoria and the most expensive Catholic schools were in Canberra.

[00:18:15] Molly: Oh, wow. Okay. There you go. And I actually knew we were having this chat, so I reached out to our audience and I said, like, what are some of your tips for, you know, when it comes to school time and.

[00:18:27] Quite a few people were like, you can always buy secondhand uniform, or you can do a swap, a uniform swap. They said as well, you don't need to, you know, you don't need absolutely everything on those stationary lists, on those school lists. And then what was the other big one? Oh yeah, very unhelpfully.

[00:18:43] Someone said, just don't have kids. That's my biggest

[00:18:46] Alex: Well that would be, you would be a big saving there. Yeah. Like on those things, like, you know how you can try to, again, minimize the impact of these of these costs. Right. So. Yeah. The things that you said are, are really good along with like, I think, you know, buying a couple of the sizes up if you can.

[00:19:03] Yeah, right. As well. Again, somewhat starting the, the back to school shop. Earlier, then later will be better and hopefully a bit less stressful. So just try to minimize those as much as you can. But yeah, really at the end of the day, if you are going to private school, you are going to, you are gonna pay more.

[00:19:22] So making sure that you are yeah, prepared for that mentally and financially as early as possible. That's, that's, yeah, really the best thing you can do.

[00:19:29] Molly: Love that. So again, there's no right or wrong answer here. It's very much down to personal preferences and personal finances. But if you are thinking about maybe sending your child to a private school, it might be worth just sitting down with a financial expert to work out what do these figures actually look like, and then how is that gonna affect your overall budget and lifestyle?

[00:19:53] Well, Alex, thank you so much for coming on the podcast and talking to us about private versus public. If you have thoughts on this, we would love to hear your opinion. Head over to our Facebook group, ladies, finance Club, money Chat, and do share if you've got any strong thoughts. Preferences, stories, pop 'em in.

[00:20:15] We would love to hear from you. A big thank you Alex. And Alex, if people wanna hear from you, they wanna maybe have a chat with you, where can they go?

[00:20:24] Alex: Yeah. So, um, I think as you mentioned at the start, I'm, I'm from Everest Wealth, so we're a nationwide financial planning company, and yeah, we, we effectively specialize in helping, um, people from Generation Z and millennials.

[00:20:36] So most of our clients are, uh, potentially thinking about having children at some point in time, or maybe they've got. Small kids already, or even if they don't wanna have kids, that's fine as well. We should definitely help with that because as you mentioned before, um, you know, you'll have more money that way too.

[00:20:50] So make makes our projections look a lot better, is what I always say. If, uh, if kids are not your thing too. But yeah, the earlier you can have those conversations, I think the, the better. And yeah, we'd be more than happy to, to have a chat with you if, um, yeah, if you'd like.

[00:21:03] Molly: Great. Thanks so much, Alex.

KEYWORDS

private schooling, public schooling, education costs, financial planning, investment strategies, budgeting for education, Australia education system, school fees, education bonds, financial advice