Cruz may be only 15 months old, but already his parents have started an education savings plan and have put his name down at several secondary schools.

"We have an excellent public primary school and we're happy to send him there," Marcelle says.

It is early days, but the most likely scenario is that Cruz will attend a private secondary school, Marcelle says.

Education costs are rising much faster than inflation. Latest available figures from the Australian Bureau of Statistics indicate education costs rose by 5.5 per cent over the year to September 30 last year.

That compares to general inflation, as measured by the consumer price index, of 1.5 per cent.

Marcelle, 36, and her husband were already clients of a financial adviser before Cruz came along. They raised the issue of education with their adviser when Marcelle was pregnant.

"There will be extracurricular expenses and we want another baby at some point as well and so planning for their future and their education is important," Marcelle says. "Our adviser did all the calculations for us and it all made sense and worked for us which is why we went ahead with it."

The couple, from Sydney's inner west, are making regular contributions to a Lifeplan Education Investment Fund.

With uniforms, school excursions, laptops and sports trips, even public education can be expensive. Then there are the extracurricular activities such as music lessons.

Those thinking of sending their children to a local public school and who want to keep their options open for a private secondary education have time on their side if they start saving when their child is born.

Financial planners say that while education-specific investment vehicles can be part of the solution, most parents are likely to pay for their children's education from a number of sources.

As children reach high school age, one of the parents is likely to increase their hours of paid work, which can help pay for education costs. Sometimes grandparents can help out.

A strategy favoured by advisers is to make extra repayments into an offset account that is attached to the mortgage and then redraw the money to pay for school expenses.

Jonathan Philpot, wealth management partner at HLB Mann Judd, says the appeal of the redraw strategy is that the money in the offset account reduces the mortgage balance for interest calculations.

Most people pay a mortgage interest rate of about 5 per cent. That means money in the mortgage offset account is earning an effective interest rate of 5 per cent.

Since there are no taxes or costs to the redraw strategy, an investment would have to earn more than 5 per cent to earn as much as an offset account.

Philpot says the strategy requires parents to have good savings discipline as the idea is to make additional savings into the offset account that are earmarked for education and to avoid redrawing the money for other purposes.

Claire Mackay, a financial planner and chartered accountant from Quantum Financial, says market conditions are difficult for those thinking of making some type of investment earmarked for education.

With interest rates low, cash accounts and even online savers are not paying that much.

Sharemarkets remain volatile with Australian share prices down about 5 per cent since the start of this year. By contrast, the redraw strategy produces earnings that are steady.

There are only a couple of plans dedicated to education and training costs that qualify for the scholarships provisions under tax law. This is where, if the money is used for education, it is taxed lightly.

Australian Scholarships Group is a non-profit organisation that has a range of programs to assist with primary, secondary and post-secondary education and training costs.

The Lifeplan Education Investment Fund is provided by Lifeplan Funds Management, which is owned by Australian Unity.

It allows investors to choose from 16 investment options, including those that invest in a single asset class, such as Australian shares, and in balanced options, which spread the money between asset classes. It also qualifies under the scholarships provisions.

Experts agree that time is the most important aspect of any savings program. Starting a saving plan as soon as a child is born gives 10 years before the money is needed to pay for a private secondary school education.

That allows the earnings from the investment plenty of time to compound. It is also a suitable amount of time to invest in shares as there is time to ride out the inevitable sharemarket setbacks.

Some managed funds invest in shares, but they can have high investment management fees.

An alternative is an index fund called an exchange traded fund (ETF). They are listed on the Australian sharemarket and units in them are bought and sold just like shares.

They have very low costs and track the domestic sharemarket as well as sharemarkets overseas.

To minimise tax, any investment would be put in the name of the lowest-earning parent.

Mackay says parents must think carefully about which school their children will attend and remember that financial stress is a leading cause of relationship breakdown.

She says she knows people who rent or move to areas with good public schools that usually have selective streams.

Twitter: @jcollett_money