Ok, here is a test for you. A simulation of sorts.
The room is really cold. Even with the central heat on, the room is just bone chilling cold. Too cold.
What should you do to warm up?
A few years ago I would have turned up the heat. More recently I would have grabbed a space heater and turned that on while congratulating myself on my clever money saving efficiency of only heating the area I was using. Go me!
I have since learned of a different paying for private school power tool: passive money generators. Today, instead of using something active (like a heater) I first try to use something passive, like a down blanket. Or another later of clothing.
This simple technique has hundreds of applications, some of which we will cover on this site. The general principal is what I want you to take away. A blanket has no moving parts and no ongoing costs to use. It cost the same in the closet as on your lap. A heater has an instant meter of costs – not to mention the environmental costs. Change your mind set and you will find these little adjustments add up quickly and provide passive instant savings to help you pay for private school.
To get your mind right simply consider what your grandmother or great grandmother would have done in a similar situation. Would she have cranked up the heat on a winter day or would she have
opened the blinds to benefit from solar gain? Would left overs have been put in the garbage or would soup have been a meal the following day?
Ask yourself what would grandma do to super charge your cash flows, build your own resilience and reduce your impact on the environment and help pay the tuition. You child isn’t the only one getting an education.
One advantage of sending your child to private school is that much of your income goes along with them. As a result it limits the other available choices because you have much less discretionary income.
Fretting over a grand tour of Europe? Fret no more! You aren’t going!
This extreme financial constraints limit your choices and the resulting simplification actually leads to longer term happiness. It is known as the paradox of choice.
Have you always wanted to simplify your life? Now you can! And what better way than the assurance of a monthly tuition bill. To be clear this isn’t about poverty – this is about voluntary simplicity. It is an interesting side effect we have noticed over years of sending the kiddo to a private school.
Read more about it in this outstanding book The Paradox of Choice (you are going to have a lot of time on your hands).
Oh, and for the trip? Easy, you are either staying home or going camping. Pick one.
Every 26 seconds a child drops out of a public school in America
In many of our nation’s largest cities dropout rates exceed 50%
America is lagging behind more than a dozen other nations in math and literacy.
These are astounding numbers.
Their proposed solution is to introduce choice via charter schools and her appointment is a clear support of that philosophy in the public education system.
I have no idea if a voucher approach will work but I suspect (acknowledging I am the least qualified person in the world to talk about this) that a sudden switch to a voucher approach will leave areas where no education options are available.
The result would be similar to food deserts. These have occurred in cities with big box grocers understandably focusing on higher income areas. The under served areas are left with few if little options and lose access to fresh produce.
I hope a new national approach results in improved academic achievement for all students but urge caution.
Slow and careful changes with an exploratory approach may make sense here. For example, can the power of the internet remove geographic barriers to educational access? How can they assure that there isn’t a generational gap for specialty programs such as special needs programs, programs focused on the arts, STEM and vocational studies while they experiment approaches?
We will watch this closely from the lens that every child deserves to use their time in school to have the opportunity to grow to their full potential and be an active part of the broader community.
There seems to be a built in mechanism in most of us to want the best of everything. What is the best car at the best price? Where is the best place to live? Reports are written and millions in advertising spent to help you get the best. And given that you earn enough income to consider private school you are probably (over) trained to analyze, sort, prioritize and select the optimal solution as part of your work life.
Stop trying to optimize at home. To pay for private school, for many of us, this is the route we take. Sure, measure, but often second, third or fourth place is just fine. Indeed, you don’t even need the best private school – just a school that fits for your child. And that may be your local charter or public school.
Add the phrase “good enough” to your lexicon and your life will get a lot simpler and you can focus your resources on the things that matter most to your family.
There is a very subtle multiplier effect which is essentially a tax free income booster that can help you pay for a private school tuition. Here is how it works.
In November my wife was looking for a tree to plant on our very (very) small yard as a screen for a nearby street. The tree had to be fairly small given the constraints of said small yard.
She happened upon one that was ascetically pleasing with a maximum height and width of 30 feet by 30 feet. Measured from the location of where we would place it with a yard stick (it’s a small yard) at full size the tree will expand 15 feet each way. Perfect!
Method Tip 1: Avoid having to earn as much income on the purchase by purchasing a lower cost item.
The ten foot tall tree, while ideal in form and habit, was half bereft of leaves with a bit of a Charlie Brown Christmas Tree look going on. The tree was originally $120 but was marked down to $30. A sale!
Enter step one of the multiplier effect. She saved $90 dollars on the original purchase.
That saved amount removed the need to earn that extra $90. Let’s assume a 40% cumulative, federal, state, sales taxes and mystery fees on the income. That extra $90 would have cost $126 in earned income to cover. Whew!
To restate- that is $126 in earnings we didn’t have to make to actually end up with the $90 extra we would have needed for the full price of the tree.
Method Tip 2: When making a purchase, have it solve multiple problems at once.
My mother told me that her grandmother had a purpose for every plant around the farmhouse, in addition to looking nice.
In our case we were looking for a small tree that provides a summer screen from the nearby street but still looks good and drops leaves in the winter for additional sunlight in the colder months. This works for both screening and sound attenuation in the winter as it is quite dense with branches.
What else could it do for us?
In our case the tree selected is a Granny Smith apple tree! It should produce about $20 bucks of
organic apples every year (ok, more like $50 but I want to be conservative here to make a point).
What about having to pick the extra apples that we won’t eat, giving bags of them to neighbors, family, coworkers and the local food pantry and then still having to pick busted ones off the ground? What a hassle right? Sure, but we have arranged our lives such that we get regular physical activity with this sort of money saving effort all year long. Annual gym memberships were cancelled long ago but we will only count the month of apple picking and leaf raking mayhem here for another $50 saved.
And for the grand finale, our nearby park has crab apple trees. These can be used to cross pollinate Granny Smith apple trees (they self-pollinate but word in the fields is that a nearby pollinator will help with yields). That is a second $30 tree we didn’t have to buy (nor had space for) because we selected a compatible tree for our neighborhood.
Total economic impact
The first year we saved $90 on the tree and $30 on a second tree we didn’t need to purchase. The tree (fairly big already) should produce apples about three years hence and provide the shade to assist with house cooling.
Lets look at the numbers using the Granny Smith multiplier method.
Year 1: $120 saved
Year 3 on: $50 saved on gym membership, $20 on apple costs and $5 on AC costs for an annual savings of $75.
Ten year economic output: $645
And remember this is all tax free after the initial $30 we spent. That is a money tree that offers $60+ annually in savings, builds community as we gift organic apples, screens the street and provides a beautiful tree to look at. Plus it is pretty cool to have an apple tree.
Let’s assume my conservative numbers are *still* too high and it only saves us half that, or $30 a month.
Fine. An investment with a yield will take a hit of 15% on the income so I would need $34.5 in monthly income ($414 annually) to produce that same value.
A typical safe stocks yield 3%. We would need a stock portfolio with a market value of $13,800 to produce that same income. And to purchase that stock we would have had to earn $20,010 in gross income to purchase that investment.
Oh, and the yield on the Granny Smith Apple Tree is $30 a year or 100% of its original purchase price, annually.
We just trounced the stock market and avoided having to earn an additional $20,000. Thanks Granny Smith!
Don’t overdo it
The multi-purpose mindset does have its limits. Spending an extra $10,000 on a fancy pick-em-up-truck because you might need to haul a jumbo pack of toilet paper someday is just a slow way to lose money. Just think about it first and run the numbers is all I am saying.
Get into the multi-purpose mindset. You can do this.