ADR Wealth | Superannuation | Age Pension | Investment | BrisbaneADR Wealth | Superannuation | Age Pension | Investment | Brisbane
Wealth Strategies Specialist
  • Home
  • About
    • Testimonials
  • Services
    • Earn Money
    • Paying Off Debt
    • Insurance
    • Kids & Money
    • Nearing Retirement
  • Advice Process
  • Blog
  • Get in touch
  • Portal Login

Follow Us

E: d.rylah@adrwealth.com.au | Portal Login
Building your ‘Family Future Fund’
September 24 2019

Building your ‘Family Future Fund’

admin Financial Planning, Lifestyle, Money Management, Saving, Uncategorized

Being forewarned about the costs of children, particularly educating them, provides an opportunity to prepare for the hit to the family budget. 

Take Ben and Laura, a young professional couple with a combined after-tax income of $150,000. They plan on starting a family in a few years and after allowing for other financial commitments decide to set aside 25% of their net income for their ‘family future fund’. Opting for the safety of a high interest savings account their return after tax is 2% per annum. When baby Rose arrives five years later, they have a head start of just over $195,000 in meeting future child-raising costs. But babies and toddlers are relatively cheap to support compared with older children, so Ben and Laura don’t need to dip into their fund just yet. This is just as well as they are forced to stop their regular contributions when unpaid parental leave puts a dent in their income. When Rose is ready to start school at age five the family fund has grown to $215,463. 

Matt and Sara on the other hand only begin to think about their future family costs when their first child Thom is born. To match Ben and Laura’s savings balance by the time Thom starts school, Matt and Sara would need to save $41,400 per year – for them, and most young couples, an impossible challenge. 

Savings options

A child’s ‘future fund’ is not something to speculate with. This means opting for ‘safer’ investments such as cash, term deposits or bonds, despite their generally lower returns. Alternatively, tax benefits may be gained by investing in insurance bonds or a friendly society education plan. 

Another possibility is to pay the savings into a mortgage offset account. This will provide a return closer to the home loan rate, which is likely to be higher than interest rates currently available elsewhere. Funds can then be redrawn as school fees or other costs require.

While every family is unique, the costs of raising children are quite staggering. Talk to us about how we can plan for the family side of your life, book in a time to chat here. 

i Conducted by the National Centre for Social and Economic Modelling (NATSEM) in conjunction with AMP. 

ii Figures estimated by ASG relate to a child educated in a capital city.

Forward this article to a friend
Can Life insurance protect my debts? Diversification – why it should be your best friend

Related Posts

‘Tis the season for wise spending decisions

Budgeting, Money Management, Saving, Spending

‘Tis the season for wise spending decisions

The right times for financial advice

Financial Planning, Investment, Money Management

The right times for financial advice

Majority of working Aussies to benefit from personal income tax cuts

Money Management, Saving, Tax

Majority of working Aussies to benefit from personal income tax cuts

Search

Recent Posts

  • ‘Tis the season for wise spending decisions
  • The right times for financial advice
  • Tax-effective ways to boost your super
  • Majority of working Aussies to benefit from personal income tax cuts
  • Be a smart gift-giver this holiday season

Categories

  • Budgeting
  • Debt
  • Financial Planning
  • Insurance
  • Investment
  • Lifestyle
  • Money Management
  • Saving
  • Spending
  • Superannuation
  • Tax
  • Uncategorized

ADR Edge

Sign up to our Newsletter

* indicates required

Norwest Central
Suite 610/12 Century Circuit
Norwest NSW 2153

M: 0428 092 928
E: d.rylah@adrwealth.com.au

Our Services

  • Earn Money
  • Paying Off Debt
  • Nearing Retirement
  • Insurance
  • Kids & Money
© ADR Wealth 2019 | Privacy Policy
AD Rylah Trading Pty Ltd t/as ADR Wealth is a Corporate Authorised Representative of Synchron, AFS Licence No. 243313

The information posted is intended to be general in nature and is not personal financial product advice. It does not take into account your objectives, financial situation or needs. Before acting on any information, you should consider the appropriateness of the information provided and the nature of the relevant financial product having regard to your objectives, financial situation and needs. In particular, you should seek financial advice and read the relevant product disclosure statement (PDS) or other offer document prior to making a decision.