Paying for private school

Tips and tricks for sending your child to private school

Build the Catherdral

For over half a century Trappist monk Justo Gallego has been building a cathedral in Spain. Led by his calling and with no formal training his effort has resulted in incredible results

Justo Gallego. Source: wikipedia

Justo Gallego. Source: wikipedias been a slow and steady building up of something beautiful. He expects no return on investment and, while accepting help, he has to be the driving force behind it, day after day, month after month, year after year.

I love this story. We as parents all of us are doing the same for our children. One way we do this is to match our

child’s needs to the appropriate school. And if you are at this site, you have selected, or are considering, a private school as one possible option.

Justo might be a little bit crazy. And many of us have  heard that we are nuts for wasting money on private school tuition. But wouldn’t it be nice to create something beautiful  for someone else?– In this case a series of experiences, lessons and morale frameworks for your children and the broader community.

You can do this. We can help.

 

Stock of the month – Kraft Heinz

As you get in the habit of avoiding expenses as a  way to pay for tuition occasionally you might have some spare money not already given an assignment. This  ultra rare event of extra dollars should be put to work. Usually you will want to put this into a super charged savings accelerator as those items have the highest yield and no competition.

One other option is to stuff the money into a stock to produce a tiny stream of income to help out. This month Kraft Heinz looks like a good candidate.

Lowest Price In Years

This company is trading at a 52 week low and is majority owned by a partnership (Berkshire Hathaway and 3G) with the stated purpose of reducing waste and using the savings to improve the business.  Reducing waste will certainly make the firm more competitive and at this price, while not super low, does provide some protection from the downside.

Given their long history it’s a safe bet that Heinz Ketchup  and Grey Poupon Mustard will still be showing up in households and restaurants well into the future in their current form. And the rising middle class in emerging countries might be a way to increase their sales over the coming decades. Either way, you get a 3% dividend yield from a repeat business that has been around for a long time.  I would prefer the price to be 60 (a forward 2021 PE of 10 for you stock pickers out there) but suspect we might not get that chance. I have determined, for me, that a quotation of in the 60’s is close enough and a good deal. Heinz Ketchup – on sale for a limited time!

Pricing Power

This delightfully boring company is right up our alley with low risk, not a lot of excitement and cash sent home every 12 weeks.

Moreover, the company has what’s called pricing power which adds extra protection. Essentially, if you are at the store and see two brands of ketchup – Heinz and Paying for Private School Excellent Experimental Ketchup you will probably go for the Heinz even if it’s 50 cents more. Why take the risk on such a small price difference?  That is pricing power.

And yet that small price difference over millions of bottles and packets of ketchup adds up and lets Heinz further improve operations and reinforce their image as a go-to shelf item.

Look Around First

Some caulk around a leaky window or perhaps a tree planted before the spring thaw takes hold might be a better move. With that said, if you have some spare cash and are in the market for boring but safe stream of income, Kraft Heinz might be worth a second look.

Be Your Own General Store

Want to save money for tuition? One way to do so is to be like your grandmother and be your own general store and service center.

Make your Own Mixes

For example,  you can make your own bleach based cleaning spray with bleach, water and laundry detergent. We did it this morning and instructions are available online. You can do it too. Just be sure to use a laundry detergent for the soap portion of it so you don’t create a toxic cloud.

The mix is 1 to 10 of bleach to water. Here is the mix we prepared this morning:

  • 3 ounces of bleach
  • 1 teaspoon of power laundry detergent
  • Top of the 32 ounce spray clean bottle we already had
Bleach bottles

Bleach Bottles by WolfmannOwn work, CC BY-SA 4.0, Link

This is 2 cents a bottle as opposed to $4.99 a bottle in the store.

I saved almost $5 bucks?

Or did I? Let’s check the math.

 

 

 

 

Amount Saved = $5

Put That Creation To Use!

I immediately put this spray to use in a clean wipe of and disinfection of the bathroom surfaces. The total process took less than 20 minutes.

Less is More

And acting as your own general store is a real quality of life booster. All we need is bleach, laundry detergent and water and one spray bottle. There is no reason to visit a big box store to stock up on sprays and fill our stuff our closet with various cleaning solutions. Time saved. Plus our frugal house is also less cluttered which lowers the stress levels.

Indeed, if you have those basic ingredients on hand it’s faster and cheaper to do it yourself than calling a cleaning services and then having to do your own this-place-is-a-mess pre-cleaning before paying for $40 professional cleaning service.

Amount Saved =$45

This in turn means I won’t suck down an entire $5 pint of ice cream in a stress induced fit. Instead I will get some gentle exercise and sense of control by being able to do this myself.

Amount Saved = $50

That combination of gentle exercise, avoiding the stress (and ice cream) and having a sense of control will delay a cardiovascular event by a few years, at least, the way I see it. And that is another $20,000 not spent on rehabilitation.

Amount Saved =$20,050

The Benefits Combine and Compound

Ok that health scare bit was a bit tongue and cheek. The point here is that doing stuff your self has benefits beyond the few dollars saved for tuition expenses. Being frugal won’t delay health issues. Or will it?

What isn’t intuitive at first and what I want you to learn is how the benefits compound beyond a few extra bucks.

Some basic home chemistry very well might increase your physical, mental and financial well-being. At the very least it will save you $5 bucks and result in clean bathrooms.

Seven Helpful Links For Private School Parents

Here are some helpful links to sites that provide guidance on how to  pay for private school.

  1. Budgets are sexy! (An entertaining how-to on financial management)
  2.  A Guide for Parents as They Look to Finance a Private School Education
  3. Can Middle-Class Parents Afford Private Schools For Their Kids?
  4. DC School Hub (Washington DC area resources for parents – find something like this in your area)
  5. Budgeting for private school (from an open and sincere parent)
  6. Attended private school – loved it.
  7. Attended private school – and didn’t love it (be open to many viewpoints before deciding what is best for your particular situation)
Old School House Sign - Source: Wiki Commons

Old School House Sign – Source: Wiki Commons

A Stitch in Time Saves Nine …Hundred Dollars

I am a fan of LL. Bean’s washable wool dress pants  as I wear fancy pants to my office job.

LL Bean is known for durable easy care high quality items. Their dress pants are a mix of wool and polyester which results in torrent of financial savings for the office dweller like me. Recently, a relatively new pair had the hem come undone and flapping in the breeze.

Think Before You Toss ‘Em

LL Bean Washable Wool Pants.

LL Bean Washable Wool Pants.

Normally I would have tossed it in the Goodwill bag and gotten a new one. More on that in a minute. First, a little more about these productive pants.

Their secret super power is that you can wash and hang them and they come out looking great without a trip to the dry cleaner. They can be more expensive up front, but as you have already learned sometimes it make sense to pay more up front.

The Savings

Let’s take a closer look at the numbers.

 

LL Bean Washable Wool Dry Clean Only Pants
Cost of pants $119 $119
Dry cleaning cost per wash 0 $5
Water cost per year $4 0
Number of times worn over 3 years 156 156
Gas cost of driving back and forth 0 1
Dryer costs 0 (we hang these on a dryer rack) 0
Hassle factor Low High
Total cost $124 $899
Cost per wear 80 cents $5.76

 

What? And that is just for one pair of pants. Assuming you wear dress pants 5 days a week the fancy drying clean only pants will cost you $4495 over 3 years. And this is before you consider shirts.

Surprisingly, we have found that doing this ourselves saves time as well. There is no driving and parking needed. And there is rarely a line at our drying rack.

$5000. And time saved. And it is better for the environment.

Back to the unfurling pants. My wife took up the hobby of sowing. She took one look at the unfolded hem on my near new pants and a moment later had them back in order. No need to ditch them.

Another $119 saved that can be added to the $5000 to use for tuition costs.

You can do this.

 

The Way to Wealth is Through Saw Dust

Problem: You need more storage

We needed more storage in the living room for stuff that had been piling up on the floor.  Ikea offers a number of credenzas but the size we wanted was about $500, before taxes. And I wanted something made of solid wood since we would be looking at it a lot and I find they are much easier to repair.

Solution: Used furniture 

Craiglist to the rescue! After many weeks of checking we found  a Modern Skovby Danish Teak piece.  Apparently these are normally thousands of dollars new and approaching $1000 used.   The one near us was being unloaded for $200.

There was a catch -the owner noted it was being sold for such a low price because it had some bad water stains.

No problem. I read that one could often iron them right out! This thing would be as good as new in no time!

Water Stain City

My buddies and I went and picked it up.

Woah.

It had a lot of water stains. Some over a foot long. And blue paint. And dents and nicks and scratches galore. Luckily, I had planned for such a possibility and bought it with plan b in mind – sand blast it!

Danish Oil To the Rescue

This summer I picked up a $40 palm sander to learn how to use a palm sander and to refinish the back patio table which was weathered.

I  put on a breathing mask and went to town on this thing – lightly sanding and buffing this thing to get the old finish, water stains and paint off. Some areas required extra attention because of what appear to be teeth marks from dogs. Woof!

The starting point was dusty, dark and deeply stained furniture

The Progression

Here is a photo of one (of many) water stain on the bottom left corner.

Photo of one (of many) water stain

Photo of one (of many) water stain

Here it is after a light sanding.

 

Lightly sanded

Lightly sanded

 

And the restored surface after refinishing it.

 Tried and True Danish Oil to the Rescue.

Tried and True Danish Oil to the Rescue.

 

Please be aware that Danish Oil left in the open will light on fire with no sparks at all through a rapid oxidation process. This will start a major fire. Always put your used rags and brushes in water immediately after use.

Costs

And here is the same model, in rosewood instead of teak, for $2800. And the teak ones go for about $1000 although I found a good one for $685 before shipping costs. Again, these are used prices for these functional works of art.

The Way to Wealth is Through Saw Dust

When it was all said and done we have a refinished side board for about $300. Depending on how you count it we either saved $200 (compared to Ikea) or $1800 (for a comparable product) or more likely somewhere in between. Importantly we learned a new skill (the entire family pitched) in and had a lot of fun. And it was cheap enough if it didn’t work out it wasn’t a big deal. We could get two for the cost of a new economy item.

Of course you can do much better than this by getting low end furniture used. But this point is that one way to pay tuition expenses is through a cloud of saw dust. And this is of course, an analogy for actual hands on work.

Should I Raid My 529 to Pay for Private Elementary School?

About 529 Plans

 A 529 plan “is a tax-advantaged savings plan designed to encourage saving for future college costs.” [1]

New Tax Law Expands 529 Use

The recent tax overhaul bill expands parents funding options to pay for private elementary and high school tuition.

Specifically, the new bill enables one to dip into a 529 plan to pay for any private school [1] – not just colleges. For example, if you have a large stash of cash in a 529 saved for college but the realities are that your youngster is struggling at school  this might be worth exploring. After all, if college is at risk because of present challenges a private school might be able to help.

Should I Raid My 529?

Raiding college savings funds to pay for lower school tuition isn’t something to be done lightly. However, it is an option now and one being worth aware of if you are considering private school for your child.

Before doing so it is worth stepping back and considering three things.

  1.  First, carefully monitor and learn about your expenses for a month. Observe your actual expenses not what you think they should be in the future. Can you still save for college or pay for some colleges based on your current situation or with some viable adjustments? And what will happen if the tax law changes again in a few year? Will you still be able to pay?
  2.  Second, with our kids it is easy to panic. Get rationale. Can some less drastic changes at school or at home help with the issues? Are charter schools or other public schools (yes, you have to move) an option? What is the full spectrum of options – and which qualify as good enough?
  3.  And finally, after the the rational exploration in steps one and two (and some meditation), follow your heart. Specifically, what do think you  wish you had did 20 years from now?  Do that and make it work by being the grown up.

If your family determines that private school is for you and you are going to raid the 529 plans to make it happen, immediately become a reader of this blog (paying-for-private-school.com) and the many other excellent financial management blogs out there. We can help.

References

  1. “An Introduction to 529 Plans.” SEC Emblem. December 04, 2017. Accessed December 30, 2017. https://www.sec.gov/reportspubs/investor-publications/investorpubsintro529htm.html.
  2.  Hobbs, Tawnell D. “Losing Students, Private Schools Try to Change.” The Wall Street Journal. December 29, 2017. Accessed December 30, 2017. https://www.wsj.com/articles/losing-students-private-schools-try-to-change-1514557437.

What’s in Your Closet?

Like many of you I am an office drone and spend my days dressed in the knowledge worker uniform which include a  pairs of wool/polyester pants.

The second life of pants

Here is a money saving tip someone showed me years ago. When the dress pants get a bit frayed and need to be replaced, keep them for the weekends. Or for painting a room in the house (once you send your kid to

cap2

private school you are going to be in-sourcing a lot of work you use to hire experts to do).

My favorite pair of pants last saw the inside of an office 5 years ago. And they have permanent black stains on them from when I refinished the driveway in them (two points added to the man card, thank you). But they are *really* comfortable.

Save time and money

What is amazing about this approach is what didn’t happen. I haven’t bought weekend pants, jeans, or pants to work in the yard over 5 years. That is a few hundred in expenses saved right there and less stuff going to the land fill. And it is better for the environment. And it is easier – I always know the pants that move to the weekend pile (I use a permanent marker to mark the inside tag so I don’t accidentally wear them to work) fit and it requires no shopping on my part.

Take a second look-but don’t over do it

The mind set of taking a second look at anything you are going to toss or recycle to see if it has a second life can turbo boost your cash flow over time and help pay for a private school tuition.

You just have to be careful to not save things that aren’t used. I only keep 3 pairs of former office attire in the weekend or yard work draw. The rest go off to be donated for a tax write off.

The pants progression

Here is appropriate life of a pair of dress pants:

  1. Dress pants for work (helps earn the income)
  2. Weekend pants (saves on buying a second pair)
  3. Donate to the thrift store (tax deduction)

 

 

Boundaries

Fancy terms are tossed around for those who reach some impressive goal. Will-power, strength, perseverance, forcefulness and might. Awesomeness!

Super Heros

These are good and make for excellent attributes of world leaders and super heroes.

Jedi Knights

What you need to save money is more along the lines of a monk (or Jedi knights); patience, flexibility, willingness to compromise, teamwork and collaboration.

Set Boundaries and Win

But above all you need boundaries. The ability to say no to others and yourself.

Boundaries are the super power of paying for private school.

Indeed, the best way to save money for a higher purpose is to not spend it on a million other valuable things. To resist the impulses bouncing around in your 3 lb. brain driving you to get this (I might need it), visit that (it would be a great experience) or eat those (I need the energy).

Become comfortable with not having the best of everythingGive your self permission to being disliked. You will find life much less stressful as a side benefit.

Get this Book

Get this book: Boundaries: When to Say Yes, How to Say No, to Take Control of Your Life – Slightly Imperfect.

Fair warning it has a slightly religious tilt (which I like).

Did you catch what just happened?

Wait A Minute

If you are new to this this whole frugality thing you probably thought “I need this now!”  and were tempted to click on the link to purchase it. Slow down. Go pick it up at the library or at least purchase a used copy.

Slow down. Let it stew. You didn’t know about it a minute ago. Meditate.

And while you are at the library or borrowing books from Amazon pick  up The Psychology of Persuasion so you know how to catch yourself next time someone presents their problem (I need to sell books)  as yours (you need to buy this book).

There you go – together we just saved $40 in under 60 seconds.

Was that so hard?

Better put an UGG on it

Consider UGG boots for the family as one of your four holiday gifts  (something to need, want, read and wear). They will be appreciated (or will be soon enough) and yield dividends.

Fight the cold

Winter floors can get really cold. Putting on socks – or even house shoes – is too much of a hassle. Cold feet lead to the heat creeping up. UGGs are slip on house boots that have wool in them. They keep your feat toasty warm. Wearing them on even a mild day can be uncomfortable because they are the perfect winter house shoe.

Be an environmentalist *and* save money

Don’t turn up the heat up to walk around the house. Put an UGG on it! We keep our house at 62 degrees Fahrenheit (16 Celsius) in the winter and everyone has a pair of UGGs.

With a onetime investment you are able to keep the heat down for years. This in turn enables us to increase our available cash for tuition payments.

Combined with a down blanket we lowered our heat from 72 degrees Fahrenheit (22 Celsius) at night to 62 degrees (16 Celsius) with no loss in comfort. Saving 3% on our bill for every degree we lower our heat means we dropped our bill by about thirty percent. And this applies for every month of the winter. Every year. On a $200 heating bill (it’s cold where we live) that is $60 bucks each month that can be sent to the school to pay for tuition. And it reduces are carbon emissions.

Keep going!

Your job is to find five of these kinds of savings. And then, once you have that done try to find more. To start off, turn down the heat and put an UGG on it.

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