School fees, saved on your terms. Paid on theirs.
Term fees land three or four times a year on dates the school picks. This Bucket spreads them into one monthly amount, keeps the money in your offset until each invoice is actually due, and shows whether paying a year upfront is worth the discount.
The danger isn't under-saving. It's the gap between invoices.
Most savings goals are lump-sum: you save toward one number, then spend it once. School fees don't work that way in two respects. The invoice arrives several times a year on fixed dates, and the moment this year's fees are paid you're already saving for next year's. Money flows in and out of the same Bucket simultaneously.
That creates a specific failure mode. Between Term 1 and Term 2, the balance sitting in your account looks spare. It isn't. It's Term 2, and Term 3, and Term 4. Without something tracking that, the money gets quietly reallocated to a weekend away and the next invoice becomes a problem.
The standard advice is to open a dedicated savings account and automate a transfer into it. That works, but it moves the money out of your offset, where every dollar was reducing the interest charged on your mortgage. For a fund that averages several thousand dollars year-round, that's a real cost for a labelling problem.
School fees Bucket calculator
| Month | Balance start | In | Out | Balance end | Interest saved |
|---|---|---|---|---|---|
| Month 1 | $18,000 | $1,500 | $4,500 | $15,000 | $85 |
| Month 2 | $15,000 | $1,500 | — | $16,500 | $81 |
| Month 3 | $16,500 | $1,500 | — | $18,000 | $89 |
| Month 4 | $18,000 | $1,500 | $4,500 | $15,000 | $85 |
| Month 5 | $15,000 | $1,500 | — | $16,500 | $81 |
| Month 6 | $16,500 | $1,500 | — | $18,000 | $89 |
| Month 7 | $18,000 | $1,500 | $4,500 | $15,000 | $85 |
| Month 8 | $15,000 | $1,500 | — | $16,500 | $81 |
| Month 9 | $16,500 | $1,500 | — | $18,000 | $89 |
| Month 10 | $18,000 | $1,500 | $4,500 | $15,000 | $85 |
| Month 11 | $15,000 | $1,500 | — | $16,500 | $81 |
| Month 12 | $16,500 | $1,500 | — | $18,000 | $89 |
"Already saved up" assumes last year's fund is fully built before Term 1. "Building it as you go" starts the Bucket at zero — if an invoice falls due before enough is saved, the Bucket goes negative, effectively drawing on the rest of your offset balance, and rebuilds by year end. Fee averages are national figures; Catholic systemic schools typically run considerably lower than independent schools.
The term invoice that lands already covered
On $18,000 a year paid across four terms, each invoice is $4,500. That is a genuinely large single payment, arriving four times a year on dates the school sets rather than dates that suit your cash flow.
Setting aside $1,500 a month means each invoice is funded before it is issued. The money has been accumulating in your offset the whole time, reducing mortgage interest right up until the day it is transferred.
The failure mode this prevents is subtle: it is not forgetting to save, it is the balance between invoices looking spare and being spent on something else.
Setting up a school fees Bucket
Create a Bucket called "School fees", set the annual total, and log each term's due date. Savvy Dollar tracks what's still owing for the year, so the free-to-spend number on your dashboard already accounts for invoices that haven't landed yet.
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Common questions
How much should I save each month for school fees?
Divide your total annual fees by twelve. On $18,000 a year that's $1,500 a month. The calculator above does this and also shows the balance across the year, which matters because you're paying this year's invoices while saving for next year's at the same time.
Is it cheaper to pay school fees annually or per term?
Usually annually, if your school offers a discount for it — commonly around 5%. On $18,000 that's $900. Weigh that against paying earlier: money handed over in January stops offsetting your mortgage for the rest of the year. At typical offset rates the discount normally still wins, but the calculator above lets you check against your own numbers.
Should I keep school fees in a separate savings account?
You don't need to. A separate account gives you the mental separation but takes the money out of your offset, where it was reducing mortgage interest. A Bucket gives you the same separation while the cash stays put. The one thing a separate account does better is make the money slightly harder to spend impulsively.
What happens if I haven't saved enough when the invoice arrives?
Switch the calculator to "Building it as you go" to see this. The Bucket goes negative, which in practice means it's drawing on the rest of your offset balance, and rebuilds to zero as your monthly contributions catch up. It shows you the deepest point so you know how much other money the fund is leaning on.
Never mix up the school fees money again
Set it up as its own Bucket in under two minutes.
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