Paying for private school

Tips and tricks for sending your child to private school

Tag: paying for college (page 1 of 3)

Do you want a $20,000 raise? Learn to use your kitchen table as a financial power tool.

My table saves us money. You can have one too. Chairs are optional but encouraged.

Here is how you use a table to save money; if you eat out at a restaurant get it to go and eat at the table you have at home. That will save you 15-20% on the tip. Ideally you should eat at home most of the time but if you don’t this simple technique saves time and money.

Paying for Private School French Country Kitchen

Paying for Private School French Country Kitchen

Tips add up

Let’s take a look at the numbers. Assume you tip 20% and eat out as a family, three times a week for a total expense of $150 a week. 20% of that cost – or $30 dollars – is spent on the tip. Skip that and in a month you will save $120 while eating the exact same food. In a year that is $1,440 not spent. And you don’t have to wait for the check.

In ten years you will have saved $14,440 in expenses which would have cost over $20,000 in income before taxes to pay for during that time. All that from  thinking differently about your kitchen table.

Keep at it!

Keep reading to collect ten of these money saving techniques and suddenly paying for private school might not seem as daunting.

Public school teacher sends child to private school

A public school teacher  wrote an article for The Atlantic on Why I’m a Public-School Teacher but a Private-School Parent

Public school teacher perspective

This was written by person who has 40 years experience working within the system;

“ …I’m not trying to be combative, but I do find it ironic that many people who argue against private schools work in the private sector. For 20 years, I have deliberately invested my life in teaching public-school kids, coaching them, and advocating for the ones who don’t have the same support that other kids have. In fact, I chose to teach in a public high school precisely because I pitied the children who felt forced to be at school, who felt trapped like I did when I was their age. I spend my own time and money advising clubs, tutoring those who struggle with English, helping students apply for college, and, sometimes, feeding kids who aren’t sure if they’re going to have dinner. On a daily basis, even as I’m surrounded by a million competing interests and distractions, I work hard to make their compulsory experience something for which they would volunteer….I am, however, concerned about the general culture at public schools—at least at the ones I’ve seen—of disengagement and compulsory learning. So when it comes to my daughter, I opt to invest a little more—to ensure she’s immersed in a community where it’s acceptable, and even admirable, to show natural enthusiasm for knowledge. I trust this particular private school, one that was created by like-minded parents, will best set her up for success.”[1]

Old School House Sign - Source: Wiki Commons

Old School House Sign – Source: Wiki Commons

Choose what makes sense for your family

The point here is not to bash on public schools. It is about choice. Choosing to send your child to a school that matches your value system. This may be a public school. And it may be a private school. And there is nothing wrong with either choice despite what others may tell you.

[1] http://www.theatlantic.com/education/archive/2015/03/why-im-a-public-school-teacher-but-a-private-school-parent/386797/

Occasionally, when other parents find we send our child to private school, they discuss their thought process for their own children.

Wait and see

For the few that consider private school as a possible path, a recurring theme  I have heard for those that can afford it is that they will wait to see if the child has potential to justify the expenses.

Old School House Sign - Source: Wiki Commons

Old School House Sign – Source: Wiki Commons

And I get that one wouldn’t want to waste money but I struggle with their wait-and-see viewpoint.

Who should go?

Shouldn’t all children be educated to their potential, even if it is not ‘success’  by conventional  standards? Indeed, isn’t a struggling child the ideal case for a private education and most likely to see beneft?

If it makes sense for your situation, move now to develop that potential and make it inevitable.

Tell your children they are a more worthwhile investment and more important than a supersized house.

Villa Haas Mansion - Source: Wiki Commons

Villa Haas Mansion – Source: Wiki Commons

Free your mind

Wait, are you saying I just need to  do things differently, do some basic stuff for yourself  and avoid some junk and then I can send my kids to private school, retire early or donate stacks of cash to worthy causes?

That is right.

Why isn’t everyone doing this? Isn’t it going to be hard? I mean, after all if it was easy everyone would be doing this sort of thing, right?

Theory of the mind (or mind control for beginners)

There is an answer to these questions and it is called theory of the mind. This super power like ability enables you to mirror the experiences of someone else simply by watching them or hearing their story.

And throughout history this has been very useful. You can watch someone knit a few times and start to mimic them. Or you can hear a vivid story of an adventure over the hills and forever remember to avoid the cove of three trees. It’s like you are there – because, in your mind, you are there!

Fantasy Island

This also makes entertainment, well, so entertaining. You can follow your favorite team all season and when they win the championship you will share in their jubilee and say “we” won even though the team doesn’t know you exist. Or you

can escape into a fantasy land where you easily relate to and experience emotions of the hero Hobbit. And there are often valuable morale lessons in these fictional tales and they can provide much needed perspective but it comes with a steep price.

It’s Fake (News)

And, it is worth noting, it is all fake. You aren’t doing any of it. Sure, going on a wild adventure in a movie or book is a wonderful experience. But it is fake. And doing the dull but profitable job of keeping accurate records is downright boring in comparison.

 

The matrix is an illusory world

The way to fix this is to free your brain up. Specifically, force yourself to turn off the video and close the book. Sit still.  Wait a bit until you get bored. Then, think about what tiny super easy thing you can do that can improves your situation. Then do it. Repeat.

Stop watching fictional people live out their fictional lives while yours slips away. Go for a walk in your boring old neighborhood. A real walk.

G Ruga Coral Maple Tree Photo

Coral Maple Tree

As you step outside and see the soft glow of the people watching their programmed lives you will soon realize you have almost no competition, few are interested in easy, unexciting, but highly profitable tasks. You have already won by simply unplugging. Everyone is busy consuming visual symbols to stimulate their brains electrical impulses.

Now you know better.

Welcome to the real world. Let’s get to work.

Hard work and self-restraint

Paying for a private school is really challenging. And while there are many mental frameworks that help one in particular is required as the basis for the rest; industry and frugality. That is a fancy phrase for the combination of hard work and self-restraint.

This is not a new concept. Benjamin Franklin wrote the following Advice to a Young Tradesman on July 21st, 1748;

“It depends chiefly on two Words, Industry and Frugality; i.e. Waste neither Time nor Money, but make the best Use of both.”4

I urge you to read the full text. What isn’t often stated is how satisfying it is to get stuff done. Checking stuff off the list! Saving tens and sometimes hundreds of dollars in the process! And redirecting those dollars to someone else’s benefit.  “Work is love made visible“. ― Kahlil Gibran

It is ok to not be the best

I am probably the least handy person on the planet. To pay the tuition we regularly apply both industry and frugality.  It started with raking the leaves instead of paying someone to do it. And, slowly, ever so slowly, and with the help of lots of YouTube videos, we added more stuff to the we-do-that list. Last year, I carefully replaced the bathroom faucet. And someone heard I was doing the work myself.

caption2

By JanekpfeiferOwn work, CC BY-SA 3.0, Link

They were quite impressed. My chest puffed out a little further (for about a minute) and it occurred to me it is kind of fun being able to get stuff done. It is even more fun to understand how something was installed so when a problem invariable occurs you can usually understand what is going on and when to call for help – and when to simply tighten a bolt.

There is dignity in work

It is very easy to be a consumer. To wait in lines for stuff and services. To pay for private school (or home school) you are going to have to change you mindset from consumer to producer. It is quite satisfying. I have repeatedly noticed that the few wealthy people I know tend to like to do stuff themselves. It is not for the money. There is dignity in work. Do stuff yourself, however small, instead of standing around watching others do it for you. It’s a lot more fun (well, when you are done) even if you have to do the same job three times in a row to get it right.

Read the Money Mustache article introducing and explaining the Consumer Habit Loop versus The Mustachian Habit Loop. And then read it again. It will take a while to sink in but it a key framework in enabling you to pay for your children education while simultaneously enjoying a more satisfying life.

Roll up your sleeves. Get your hands dirty*.

You can do this.

 

 

*Not really. I go through about 100 Raven Nitrile Power Free Gloves every six months. They enable me to do jobs that normally I would resist from the gross factor alone (this includes all cleaning, car and plumbing work).

 

 

The truth exposed

The truth about how to pay for private school isn’t very exciting. While good income, low costs, careful spending and regularly saying no to a myriad of worthy spending choices are important they aren’t “it”.

Voluntary Self-Sacrifice

Instead, they are signs of an underlying philosophy that is rare these days but common throughout history. And that is self-sacrifice.  In short, this is giving up something worthwhile for you so someone else can have something even more worthwhile.

This framework may seem familiar to you as it the basis or morality of most religions.

US Currency - Source Wiki Commons

US Currency – Source Wiki Commons

This beautiful concept has a stark reality. Rare vacations. Older cars and furniture. A higher thermostat in summer. A delayed retirement. Smaller living quarters.  On paper this sounds good but the reality is a bit different. For example, my old Subaru leaked gas fumes in the car when the temperatures dropped by 30 degrees (a clip as contracting too far). While not overwhelming it did result in the windows down in January and February.  Freezing winds, icy rain and strange looks penetrating even the fuzziest of ear muffs.*

Voluntary self-sacrifice is how family of limited means pays for private school.

This can make you all stronger

Madeyski Suffering -Source: Wiki Commons

Madeyski Suffering -Source: Wiki Commons

As an extra benefit, these hardships are part of the education process. They build toughness, humility, empathy, resilience and demonstrate to all the ability to focus as a family on higher goals. They teach you to be resourceful and solve difficult problems without simply purchasing your way out of every discomfort. It helps prevent a family with extra resources spoiling their child. By definition they will have less materials goods, entertainment and goods as a result.

A better quality of life

You will invariably become an environmentalist as well as produce more and consume less. You will make mistakes, adjust and move on. It might not work. But you will take the leap. Some will praise you but most will criticize you. Be ok with people being upset with you because they think you are wasting money or choice is seen as undermining the public school system. It is ok not to have every one agree with you. Indeed, it is desirable.

.* The Subaru was eventually replaced by a 10 year old Volvo station wagon – a low cost way to get a top IIHS safety rating on the cheap. The second week I had it the passenger window fell into the well. Forever open. Instead of rushing to the dealer I checked the weather (no rain for a week!) and after a lot of research and $19 later the window opens and closes again.  It’s not perfect, but it works.

Volvo Wagon - New to us!

Used Volvo Wagon – New to us!

 

 

Should I get a loan?

No, you should not get a loan to pay for private school elementary or high school.

A loan means you don’t have the money

A loan means you don’t have enough money to pay for the school. A loan means you would spend more than you have, every month. That is not sustainable for the long haul of tuition for private school which can go on for decades.

Debt has specific uses

caption2

By Sander van der Wel from Netherlands – Depressed, CC BY-SA 2.0, Link

Debt is appropriate for a business venture where you can reasonably expect to recoup it and then some – such as a highly employable four year college degree or a medical emergency. Or for a house where the deductible interest usually (depending on interest rates) makes the loan cost less than paying cash outright.

Everything else is a pants on fire debt emergency. Don’t add to it.

Here are your options

  • Cut expenses
  • Increase income
  • Choose a lower cost school
  • Choose a public school

What!

Public school?

Yup, public school is an excellent option. Seriously consider it. It is ok to not go to private school. It is not ok to destroy your family life and health in the pursuit of this singular goal.

Confront reality, and then adjust

Confront reality, whatever that may be – don’t put yourself in bondage and mortgage your future time just because you wished things were different.

Instead, you can send your kids to public school and pick up a  tutors and religious education on the side to augment the education. That is an acceptable and perfectly fine version of private education. So is home schooling. Remember the goal: an education for your child that results in a balanced, centered, inquisitive and knowledgeable adult with an internal morale compass. There are lots of paths to get to the end result without selling your future on this  one way of achieving your goals.

Half priced cars ! On sale now! And every day!

An introduction to mispricing

Use the economic concept of mispricing.  to reduce your costs and free up more money for tuition.

Mispricing occurs where sellers out number interested buyers for a particular item and where the item is able to be repriced lower based on that demand imbalance.

The example usually comes up in relation to financial assets such as stocks, bonds, real estate and so on but applies to consumables as well.

An Example: Mispricing in the stock market

Charlie Munger executed this perfectly in the 2009 financial panic as described in an article in Bloomberg News.

“By diving into stocks amid the market panic of 2009, Munger reaped millions in paper profits for Daily Journal. The investment gains, applauded by Buffett at Berkshire Hathaway’s annual meeting in May, have helped triple Daily Journal’s own share price. While Munger’s specific picks remain a mystery, a bet on Wells Fargo probably fueled the gains, according to shareholders who have heard Munger, 89, discuss the investments at the company’s annual meetings. “Here’s a guy who’s in his mid-80s at the time, sitting around with cash at the Daily Journal for a decade, and all of a sudden hits the bottom perfect,” says Steve Check, an investment manager based in Costa Mesa, Calif., who has attended the publisher’s meetings since 2004.

The stock market profits were first disclosed in a May 2009 Daily Journal regulatory filing under the heading, “Liquidity and Capital Resources.” The section outlined how the publisher was sitting on about $9 million in gains after spending $15.5 million buying common shares over six months through March 31 of that year. The results kept getting better. By the end of September 2009, they had appreciated to almost $48 million.

[1]

The five steps to benefit from mispricing

To execute a mispricing purchase you first must recognize one and then be able to act on it. This requires a number of elements to be in play at the same time:

  1. Patience
  2. Cash
  3. Analysis
  4. Flexibility
  5. Willingness to purchase an unpopular item in scale

We use the mispricing approach for our own benefit on vehicle purchases.

Early on we were striving to get the “best” instead of “good enough”.

Flexibility

So we went with a popular vehicle at the time, a Toyota 4runner. These were popular and expensive and we used the only mispricing technique we knew about at the time which was flexibility. We purchased a new 4Runner from the left over trucks from the previous model year. The $45,000 vehicle only cost us $40,000. We didn’t get the color or exact features we wanted but we saved $5000. Woot! And that popularity was not unfounded. We had the car 14 years and it is still on the road today.

Product is Currently Unpopular

For the next vehicle we got a little better at finding mispricing. The SUV boom was well under way and hatchbacks were unpopular and considered no longer cool. When we actually looked at the features they delivered enough mass and safety features to be safe, better gas mileage and all the functions of a full size SUV (that we needed). They were simply unpopular compared to the monster truck models of the day.

We combined the unpopular feature with the late model technique and got a Subaru Forester for $20,000. This was half the cost of the previous car purchase. Woot! $20,000 saved! These cars have since become popular again as more and more folks figured out the many benefits of these mid sized sport utility vehicles so mispricing affect is largely gone (on this model).  We were in style again, at least for a while.

Cash, Analysis and Patience

For our most recent purchase we added analysis and patience to the mix and to further benefit from mispricing. Many cars are rated by reliability. And they if aren’t rated top tier for reliability they really suffer in the used car market. People don’t want to own something that wasn’t best for reliability when purchasing something used. But when you do the analysis a middle tier rated car is actually more reliable than cars of the past.

We saved $30,000

We combined flexibility, our reliability analysis and the unpopular status of middle tier to watch, wait for and eventually obtain a used Volvo wagon for $12,000 dollars with very low miles. Woot! $30,000 saved! The battle wagon doesn’t have a lot of advertisments 

 

In summary

The market (us buyers and sellers) occasionally misprices goods and servies and assigns artificially high prices to the best and artificially low prices to the runner ups. You can discover and use this mispricing if you conduct the analysis, are flexible, patient and willing to select something currently unpopular (not easy as it sounds) that meets your particular needs. Just do your homework to make sure it is actually mispriced and not low cost for a reason you care about.

What about you? Have you benefited from temporary mispricing conditions?

[1] https://www.bloomberg.com/news/articles/2013-07-25/berkshire-hathaways-charlie-munger-shows-a-golden-touch

Is it wrong to go to private school?

In a conversation with friends, they made the case that it is wrong for parents to not send their children to public schools.

Are they right?

It is wrong and elitist to send your child to private school?

The argument proposed has a similar stance to that of insurance or immunization – we all have to do it for the overall system to be effective.

Their line of thinking was this: the diversity of income, education and perspectives creates a better situation for all.

For example, the mechanic can provide both material support and assess the conditions of the shop class. The lawyer can monitor what is expected, and, if needed, use the legal system to ensure the children are getting the resources needed. Meanwhile the single parent who is working three jobs benefits from the extra set of eyes and benefiting from the diversity of the community. The worse the school district the better the benefit.

Public Domain, https://commons.wikimedia.org/w/index.php?curid=700891

High Court Bench – Source Wiki Commons

This is a compelling argument. So let’s take it further. If we seek to optimize this benefit it would make sense that we all live in public housing. Clearly, it is unethical to pick a house based on your preference. Surely a well heeled lawyer could do wonders to improve the community. And a police officer and their family would be a welcome presence to thwart malfeasance. Along this line of thinking if you are an involved parent you can make the most difference if you send your child to the *worst* possible school available. Certainly your child will suffer as a result because of the time it takes to reform a school but it is for the greater good. Right?

Similar arguments have been made for public transit and even employment sharing. And on paper it sounds good.

The role of self interest and competition

The observed reality is a bit different.

In a resource constrained environment a lawyer will understandably use their limited time to focus on the needs of *their* child which they understand best and have a prime interest in. Other children might lose attention as a result. After all, the squeaky wheel gets the grease. And that wheel might sue. And the police officer in a dangerous public housing project will want to protect *their* family. Why should they have to patrol their own neighborhood after a long overnight shift after already doing that somewhere else? Should they have to work for free after a long day? Isn’t that a shared responsibility of everyone in the neighborhood?

Instead, grade the schools

An alternate model is one where schools competes to serve the needs of all the attending children. Those that fail too many for too long shut down. Those that do well can grow their system and benefit from economies of scale. This free market approach does require regulation (and for education, lots of it) but in aggregate it is a pretty good system in other areas. That is today’s private school system.  And home schooling. And the public school charter school system.

Indeed, the reason we send our child to a private school has nothing to do with academics and everything to do with the school naturally working faith and reverence into each day. That is important to us. For others it might be a school with a world class music program.

We donate beyond the required tuition and will likely send money long after our child has graduated because we want to see the religious framework of that school continue. Many of the children attend for free based on economic need. And you should see the children who graduate. They are concerned about social justice, have a sense of right and wrong internalized and have the academic framework to be able to make a difference. And that is good for everyone.

 

 

Are you a bad person for sending your kid to private school?

A recent slate article proposed that if you send your kid to private school you are a bad person.

The thesis for this claim is that if every single child to public school they would improve.

No studies or data are presented to back this up.

And she might be right – but convince us!

Will putting more people into a bad system help? Maybe. But why didn’t it help from the previous generation? Or the one before that? Were those parents lazy? Didn’t they use their influence and connections to improve the education system? Is it better?

An alternate approach is creative destruction. In a system where bad actors (second rate phone companies, restaurants that get everyone sick) are allowed to fail and good actors (first rate phone companies, barf-free restaurants) are enabled to thrive, over time, the bias tends towards more good actors.

That is the private school system. A public school can be reformed but, until folks move away it can also continue to operate “as is”. Indeed, private schools put pressure on public schools to get better by their higher performance. I emotionally get the “we all need to go to public schools to improve it”. Then I think of the clogged roads and how teleworking is opting out and improves

caption2

Does more here help? Image attribution: CC BY-SA 2.5, Link

my circumstances and enables more of a scare resource (roads) to be more available to those who need it.

We can do better than sacrificing a child’s education in the hopes that doing so might improve the over all system. A better use of these energies is to educate the children who need it now and thereby raising the standard upon which all schools are evaluated.

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