hi guys, not sure if this is in the right place so mods, if not, sorry! and happy to have moved...
we have looked into the Australian Scholarships Group to set up a fund for our DD to help with expenses for her secondary and tertiary education.
has anyone gone down this path or used it?
would love to get some feedback and whether they think it's a good idea or better to just do a self-managed arrangement (like rolling over term deposit accounts etc).
The things I liked about ASG are:
- your get the $ even if you end up not needing to use it for educaton (say you child gets a scholarship from the school, or doesnt go on to uni etc)
- your money is guaranteed as its government backed.
We signed up for both boys. Obviously we are not seeing the benefits yet, but I think we will really appreciate getting the money back when we have all those school expenses. Truthfully school won't be as expensive as day care, but I think the "enforced savings" now will be worth it to make life a little easier down the track. Plus I like the incentive value for the kids when they leave school. Knowing that they will get some money might make them less likely to give up all forms of study to get a job.
We've gone with ASG too - signed up when DD was about 6months old. I like the fact that it is guaranteed and also that you get tax exemptions ont he interest as it is an education fund. Also the tertiary incentive is a good one (I know I would have liked that when I went to uni!)
The financial advice we got is that it's far better to sink that money into paying off your home loan as quickly as possible (given that the interest on a home loan compounds, you can save yourself far more than you'd ever earn in a scholarship plan). Then once your loan is paid off (ie your money has worked hardest for you) you can afford to invest in a high-yield arrangement to cover any education expenses/other things that you'd like for your children. Ie you might have a child who opts to NOT to study but wants to spend time overseas - (valid lifelong learning). Or they may want capital to start a business/buy property, etc. In the ASG model your money won't give you a return in this scenario, but by investing independently the money is yours to decide.
PS I'll add that originally we signed up, seemed like a good idea, but took an early exit.
You're certainly right MD that paying off your mortgage quicker is a better return. But the will power to do that and not redraw the money is not always there
advice on scholarship funds...
Reply With Quote
Bookmarks