How the Hell Do You Fund Private School Fees?
The first big private school invoice lands next year. Are you lying awake doing the maths, quietly wondering how on earth you make it work?
You are not alone. We are having this exact conversation with more and more families right now. You bought the home you wanted on the lower North Shore or in the Eastern Suburbs. The local school was not quite the fit, so private became the plan. The mortgage is ten to eighteen thousand a month and you are getting through it. Then the fees turn up at $40,000 to $50,000 a year, and the surplus you were counting on has vanished. Sydney private school fees now push past fifty thousand a year, and more than half of private school families say they are feeling real financial pressure. This is one of the tightest stretches of your financial life. So let's talk about how you actually get through it.
First, call it what it is
Private school is as much a financial decision as an educational one. It is a completely valid choice about the life you want for your kids. But it comes with a trade off, and pretending otherwise helps no one.
When we model a family's 50 year cash flow, the school years almost always show up red. There simply is not enough surplus to fund everything at once. The good news is what happens next. Once the kids finish school, the big surplus years come back, and that is when the plan gets rebuilt.
This is what it takes
Let's be honest.
What comes next is not the pathway we would normally recommend. It is not the smartest way to build wealth, because while you are funding fees you are giving up years of compounding you never get back. But if you have decided this is the priority, it is simply what you have to do.
Something has to give. You might have to defer extra home loan repayments, and that could add a few years to paying it off. You might have to hold back on additional tax-deductible super contributions, which means missing out on the compounding and landing on a lower super balance down the track. You might have to work an extra few years. And those big holidays might have to wait for a while. None of that is easy to hear, but it is the honest trade off.
The point is this. If this is what matters most to you, then this is what we do. Not forever. Just through these years. And the one thing that makes it work is having someone hold you accountable to the catch up on the other side. Without that, you are far better off starting small now and letting compounding do the quiet, heavy lifting.
How to pay private school fees: practical strategies
• Park cash in your offset or redraw. It saves you mortgage interest at a better rate than any savings account, and it is there when the fees fall due.
• Press pause, then catch up hard. Ease off the wealth building through the fee years and accept you will make up the ground once fees stop. Done on purpose, it is a real strategy, just know it may mean working a little harder or longer later.
• Refinance to smooth the peaks. Pulling out equity beats unsecured fee finance, which can carry double digit interest. Just plan it and repay it deliberately.
• Start an investment or education bond early for the second or third child. You often have a longer runway before the younger ones hit high school, so a bond has time to grow. Held past ten years, the earnings are taxed inside the bond rather than at your marginal rate.
• Chase scholarships and bursaries. The most underused lever there is. Scholarships can cover twenty five to one hundred per cent, and means tested bursaries are often open year round. Call the admissions office.
• Ask about sibling discounts. Rarely advertised, often twenty to fifty per cent off the second and third child.
• The bank of gran and grandad, done properly. Gifting now is often worth more than an inheritance decades later.
• Trim the extras. Uniforms, devices and camps add up. Buy second hand and spread the costs.
• Consider public primary, private secondary. You do not have to fund all thirteen years privately. It can halve the bill.
The finish line moves
Here is what most people miss. When your youngest walks out of school for the last time, it does not get easy. It changes. That is the moment the plan flips. You attack the mortgage. You rebuild the super. You get the portfolio moving again. Handled well, you get the years you wanted with your kids, and you still retire on your terms.
Where we come in
If this is keeping you up at night, that is exactly what we solve. We model your full cash flow, show you what the school years really look like, decide together what to pause and what to protect, and keep you accountable to the catch up. Let us show you the numbers, so you can stop guessing and start sleeping.
Book a chat with Emerging Wealth. Financial + life planning for under 50s who want more out of life than the ordinary.
Frequently Asked Questions
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At Sydney's most exclusive schools, fees now exceed $50,000 a year for the first time, but across the broader market median Year 12 fees sit closer to $32,000, with plenty of schools in the $20,000 to $45,000 range, plus extras like uniforms, devices, and camps on top.
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You should still be able to comfortably meet your minimum mortgage repayments over your loan term. Where families stretch is on the extra repayments, and pausing those during the fee-paying years is common and manageable. But if you can't comfortably cover the minimum repayment itself, private school probably isn't affordable for your situation right now.
Note: pausing extra repayments is only something we'd consider if you've genuinely got yourself into a bind and can't afford school fees any other way. It's not a recommendation for the vast majority of clients (around 95%).
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Keep going with your compulsory 12% employer super contributions, that never stops. What some families choose to pause is extra voluntary (concessional) contributions during the fee-paying years, with the plan being to go hard on catch-up contributions once you're through the school-fee stage.
Note: this is only relevant if you've found yourself unable to afford school fees any other way. For most clients (around 95%), we wouldn't recommend pausing extra super contributions as a strategy.
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Any funds you need for spending or fees should sit in your offset account. Refinancing isn't something I'd recommend for funding fees. The only time refinancing might come into the conversation is if you genuinely can't afford it and you're considering selling the house, and even then, I'm very reluctant.
Speak to us first before doing anything like that.
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Yes, start an investment bond, but timing matters. Start it early: just after a child is born, or while they're still in primary school, so it has enough time to work in your favour before high school fees hit.
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Once school fees stop, you move into catch-up mode, making up for the years you didn't build wealth while fees were being paid. You go hard: rebuilding super, investments, and mortgage repayments.
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If you're not following the traditional pathway of building wealth consistently and letting it compound over time, if you're pausing contributions, deferring repayments, or taking a non-traditional approach to get through the school-fee years, you still need to check that you're going to be OK.
That's where your adviser comes in: helping you map out how you'll catch up and make up for the years you weren't building wealth the traditional way.
Money with meaning starts with one conversation.
Let's map out a plan that covers your cash flow, your "what ifs", and the life you actually want to live.
MIKE MILLER
Founder, Financial Adviser | BBus, CFP®, RLP, JP
Emerging Wealth l Financial Planners in Sydney for ambitious under 50s who want more out of life than the ordinary.