Can I afford private high school?

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EmeraldRoth
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Can I afford private high school?

Post by EmeraldRoth » Wed Jul 18, 2018 3:41 pm

Can I afford private school? (Grades 9-12)

My husband and I make $200,000 a year together and after taxes it’s roughly $135,000 (city taxes are quite high in SF). We have no debt or mortgage and own our property outright. We pay $30,000 a year in maintenance. Combined retirement savings is $500,000 and we have saved $65,000 so far for college but my husband’s parents have an account for my son that will cover the cost of any college. The private high school we would like to send our son is $40,000 a year. Do we have enough?
Last edited by EmeraldRoth on Wed Jul 18, 2018 4:12 pm, edited 3 times in total.

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cheese_breath
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Re: Can I afford private school?

Post by cheese_breath » Wed Jul 18, 2018 4:07 pm

EmeraldRoth wrote:
Wed Jul 18, 2018 3:41 pm
... my husband’s parents have an account for my son that will cover the cost of any college. The school we would like to send our son is $40,000 a year. Do we have enough?
I guess you do if you use your husband's parent's account.
The surest way to know the future is when it becomes the past.

livesoft
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Re: Can I afford private school?

Post by livesoft » Wed Jul 18, 2018 4:09 pm

For college, yes. For before college K-12, no. Maybe 11-12 though.
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Rupert
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Re: Can I afford private school?

Post by Rupert » Wed Jul 18, 2018 4:14 pm

Just high school? So four years? You can probably swing it for four years if you use the $65,000, cease discretionary saving, and slash your other expenses. I suppose you could also take equity out of your home to pay for it. Keep in mind that tuition will go up every year, and "tuition" typically doesn't include fees, which can be quite substantial. Not to mention the ceaseless fundraisers that you will be expected to participate in/contribute to. And all the ceaseless trips/experiences that wealthier kids at the school will be participating in that your kid won't be able to participate in.

runner540
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Re: Can I afford private high school?

Post by runner540 » Wed Jul 18, 2018 4:22 pm

So your annual budget will be:
$135k
-$40k private school
-$30k maintenance on house (yikes!!)
-$ X for food, insurance, transportation, utilities, etc.
-$Y for savings
= ??

If you can swing everything while continung to save at appropriate levels, then maybe this is your big "splurge".
Also, I know Cali is high tax, but are you getting any tax advantaged savings?

JoeRetire
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Re: Can I afford private high school?

Post by JoeRetire » Wed Jul 18, 2018 4:23 pm

EmeraldRoth wrote:
Wed Jul 18, 2018 3:41 pm
Can I afford private school? (Grades 9-12)

My husband and I make $200,000 a year together and after taxes it’s roughly $135,000 (city taxes are quite high in SF). We have no debt or mortgage and own our property outright. We pay $30,000 a year in maintenance. Combined retirement savings is $500,000 and we have saved $65,000 so far for college but my husband’s parents have an account for my son that will cover the cost of any college. The private high school we would like to send our son is $40,000 a year. Do we have enough?
I assume you have $65,000 saved so far in a 529 account (which can be used to pay tuition at a private high school these days). Obviously, that won't cover $40,000/year for 4 years.

Maybe you could afford to cash-flow the rest? No way to know if you can afford it without knowing all of your expenses.

psteinx
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Re: Can I afford private high school?

Post by psteinx » Wed Jul 18, 2018 4:30 pm

1) $30K just for maintenance of a house is REALLY high, unless the house is a large mansion or the like (which I assume it is not). Is this really a year-in, year-out expense, or just a year or two of abnormally high costs as you rehab something?

2) Only 1 kid? If he has younger (or older) sibs, that's a significant consideration...

3) Even with 1 kid, $40K/year is a lot for high school. Could you afford it? Yeah, probably. But is it really a good use of your money, versus sending him to a public school? Hard to say. Be aware that just because the test scores at a given private high school may be pretty high, that doesn't mean that that private HS teaches the students there that much better than the comparable public. There is likely to be a significant selection effect in the kids (and the parents who send them), for such a school...
Last edited by psteinx on Wed Jul 18, 2018 4:37 pm, edited 1 time in total.

Rupert
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Re: Can I afford private high school?

Post by Rupert » Wed Jul 18, 2018 4:33 pm

I was curious about the $30K house maintenance too. What does that figure include? Insurance and all utility payments? Yard maintenance? Seems you could create some substantial savings there.

EmeraldRoth
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Re: Can I afford private high school?

Post by EmeraldRoth » Wed Jul 18, 2018 4:38 pm

psteinx wrote:
Wed Jul 18, 2018 4:30 pm
1) $30K just for maintenance of a house is REALLY high, unless the house is the Biltmore or the like (which I assume it is not). Is this really a year-in, year-out expense, or just a year or two of abnormally high costs as you rehab something?

2) Only 1 kid? If he has younger (or older) sibs, that's a significant consideration...

3) Even with 1 kid, $40K/year is a lot for high school. Could you afford it? Yeah, probably. But is it really a good use of your money, versus sending him to a public school? Hard to say. Be aware that just because the test scores at a given private high school may be pretty high, that doesn't mean that that private HS teaches the students there that much better than the comparable public. There is likely to be a significant selection effect in the kids (and the parents who send them), for such a school...
Yes, 30k is quite a lot of maintenance but we live in a luxury co-op (we’ve dealt with it for the past 15 years) and that includes property tax. It is a necessary cost unless we were to move. I only have one kid which is why we are even considering a private school. Public schools in SF are sub par unless you go to specialized but we are past that deadline.

EmeraldRoth
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Re: Can I afford private high school?

Post by EmeraldRoth » Wed Jul 18, 2018 4:41 pm

Rupert wrote:
Wed Jul 18, 2018 4:33 pm
I was curious about the $30K house maintenance too. What does that figure include? Insurance and all utility payments? Yard maintenance? Seems you could create some substantial savings there.
The 30k includes property tax, heating, doormen and superintendent services.

bearwithbear
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Re: Can I afford private high school?

Post by bearwithbear » Wed Jul 18, 2018 4:44 pm

Just not enough information.
How old are you and your husband?
How long have you been making these salaries?
How safe are your jobs?
Any pensions?
What is the value of your house?
How much do you need to live on?

I don’t have a bias against spending the money but can’t answer your question without more information.
Bear

EmeraldRoth
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Re: Can I afford private high school?

Post by EmeraldRoth » Wed Jul 18, 2018 4:48 pm

bearwithbear wrote:
Wed Jul 18, 2018 4:44 pm
Just not enough information.
How old are you and your husband?
How long have you been making these salaries?
How safe are your jobs?
Any pensions?
What is the value of your house?
How much do you need to live on?

I don’t have a bias against spending the money but can’t answer your question without more information.
Bear
My husband is 55 and I’m 50. We’ve been making these salaries for about 20 years and our jobs are fairly secure (you can never be sure). I have a substanstial pension on top of a Trust that I will receive when I am 65 or (God forbid) my parent’s pass. We estimate that our home is around $1.2M considering the comps. I’ll have to check living expenses as I haven’t really counted them.

EmeraldRoth
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Re: Can I afford private high school?

Post by EmeraldRoth » Wed Jul 18, 2018 4:50 pm

runner540 wrote:
Wed Jul 18, 2018 4:22 pm
So your annual budget will be:
$135k
-$40k private school
-$30k maintenance on house (yikes!!)
-$ X for food, insurance, transportation, utilities, etc.
-$Y for savings
= ??

If you can swing everything while continung to save at appropriate levels, then maybe this is your big "splurge".
Also, I know Cali is high tax, but are you getting any tax advantaged savings?
Part of my $500,000 in savings is apart of a 401k and the $65,000 is in a 529.

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TomatoTomahto
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Re: Can I afford private high school?

Post by TomatoTomahto » Wed Jul 18, 2018 5:21 pm

For what it’s worth, we have spent a lot of money on education. Not once have we thought it was wasted, and our public school system was one of the best in the country.

You can afford it, and if you think the school is really better than the public, just pull the trigger, especially since college seems to be accounted for already.

soccerrules
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Re: Can I afford private school?

Post by soccerrules » Wed Jul 18, 2018 5:23 pm

Rupert wrote:
Wed Jul 18, 2018 4:14 pm
Keep in mind that tuition will go up every year, and "tuition" typically doesn't include fees, which can be quite substantial. Not to mention the ceaseless fundraisers that you will be expected to participate in/contribute to. And all the ceaseless trips/experiences that wealthier kids at the school will be participating in that your kid won't be able to participate in.
+1
there may be a building fee for new families as well
Don't let your outflow exceed your income or your upkeep will be your downfall.

EmeraldRoth
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Re: Can I afford private high school?

Post by EmeraldRoth » Wed Jul 18, 2018 5:32 pm

TomatoTomahto wrote:
Wed Jul 18, 2018 5:21 pm
For what it’s worth, we have spent a lot of money on education. Not once have we thought it was wasted, and our public school system was one of the best in the country.

You can afford it, and if you think the school is really better than the public, just pull the trigger, especially since college seems to be accounted for already.
If you don’t mind me asking, how much have you spent on your child’s education and what was your available income?

thomase
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Re: Can I afford private high school?

Post by thomase » Wed Jul 18, 2018 5:41 pm

Can your child attend Lowell high school? I grew up in SF and attended, it's a great school. $40K sounds like a lot for high school, that exceeds what I'm paying for my kid at UCLA.

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TomatoTomahto
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Re: Can I afford private high school?

Post by TomatoTomahto » Wed Jul 18, 2018 5:50 pm

EmeraldRoth wrote:
Wed Jul 18, 2018 5:32 pm
TomatoTomahto wrote:
Wed Jul 18, 2018 5:21 pm
For what it’s worth, we have spent a lot of money on education. Not once have we thought it was wasted, and our public school system was one of the best in the country.

You can afford it, and if you think the school is really better than the public, just pull the trigger, especially since college seems to be accounted for already.
If you don’t mind me asking, how much have you spent on your child’s education and what was your available income?
Private school 7 years for one (middle and HS) and 4 years for the other (HS). I don’t remember precisely what tuition was, but it was around $40k per child per school year.

College was full pay Yale for 4 years and (so far) 2 years full pay at Skidmore.

My wife’s income was considerable throughout, although the cost was “felt” the first years. Her income climbed substantially during the decade in question.

EmeraldRoth
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Re: Can I afford private high school?

Post by EmeraldRoth » Wed Jul 18, 2018 6:19 pm

thomase wrote:
Wed Jul 18, 2018 5:41 pm
Can your child attend Lowell high school? I grew up in SF and attended, it's a great school. $40K sounds like a lot for high school, that exceeds what I'm paying for my kid at UCLA.
I’ve heard great things but sadly the deadline has passed.

runner540
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Re: Can I afford private high school?

Post by runner540 » Wed Jul 18, 2018 11:06 pm

EmeraldRoth wrote:
Wed Jul 18, 2018 4:50 pm
runner540 wrote:
Wed Jul 18, 2018 4:22 pm
So your annual budget will be:
$135k
-$40k private school
-$30k maintenance on house (yikes!!)
-$ X for food, insurance, transportation, utilities, etc.
-$Y for savings
= ??

If you can swing everything while continung to save at appropriate levels, then maybe this is your big "splurge".
Also, I know Cali is high tax, but are you getting any tax advantaged savings?
Part of my $500,000 in savings is apart of a 401k and the $65,000 is in a 529.
My question is related to (i) whether any of your current income is going into those plans, and (ii) whether you would be able to save any money while paying for private school. It would save you a lot on taxes. If you think your retirement is already covered/secure with the $500k, the trust and your pension, then it's not that bad to take 4 years off from saving, but if you still need to save, I would say you should really consider whether private school is a need versus your retirement. And you need to know what your monthly and annual expenses are.

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bottlecap
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Re: Can I afford private high school?

Post by bottlecap » Thu Jul 19, 2018 1:01 am

It seems like you can do it as long as you have a trust fund to use for school and/or fall back on when you retire.

Given your incomes for the past twenty years, the amount saved, your location, and the amount of your fixed expenses, I’m guessing that it would be very difficult to live on less than $65k a year in your situation. That sounds tough to do for four years.

JT

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