If you have given any thought to entering your children into private education, you likely know that it’s an expensive proposition. But it’s also becoming more popular, with private school enrolment in Canada, for example, rising by nearly 17% while public school enrolment has decreased by 8%, according to the Fraser Institute. Quebec and British Columbia saw the largest increases in the share of independent school enrolment, from 9.4% to 12.6% in Quebec and from 8.6% to 11.6% in British Columbia.

Private School Costs

As you consider private schools, keep the elevated costs in mind, although price varies based on the type of school and the various programs available. Boarding schools, where tuition also covers accommodation and food, are the most expensive. According to the Council of Ministers of Education, Canada, private school tuition and boarding fees range from $30,000 to $60,000 per year, with schools in large cities at the higher end of the price range. Faith-based schools generally have the lowest fees. Although many of the costs at private schools are all inclusive, some schools may not cover laptops, textbooks, lunches and uniforms.

Most private schools offer funding programs to help ease the financial burden. In addition, your children might be eligible for scholarships and bursaries. Make sure you fully research such programs, as the cost savings can be significant.

Paying for Private Schools

The best way to pay private school tuition is to plan ahead and save, says Dwayne Rettinger, an Executive Financial Consultant with IG Private Wealth Management. Dwayne Rettinger notes that a Tax-Free Savings Account (TFSA) can be an excellent choice since any income earned isn’t taxed and there are no withdrawal restrictions — you can take out as much as you need, at any time.

To make the most of your TFSA, it’s best to start when children are young and contribute the maximum annual amount, currently capped at $5,500. Keep in mind that you can carry forward unused contribution room from previous years. Consult your financial advisor for details.

If you start early and contribute the maximum annual amount, you’ll have longer to save and get the biggest benefit from compound growth. You also have options when it comes to your TFSA investment, including cash, mutual funds, individual securities, guaranteed investment certificates and bonds.

To make sure you get the most from your TFSA investment or other savings options, start with a tutorial from your professional financial advisor.

Private schools can give your children an important advantage when it comes to future educational plans and life skills. But make sure you plan well in advance so you can cover the considerable cost of going private.

Dwayne Rettinger
Investors Group Financial Services Inc.
https://www.investorsgroup.com/en/legal/disclosures

Published: 2018-12-20 19:29:06