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.

Frugality is a quality of life compounding machine

 

By Julius SchorzmanOwn work, CC BY-SA 2.0, Link

In my grubby little hands I am holding a wonderful 12 ounce bag of dark roasted Starbucks Café Verona coffee. This powerhouse of anti-oxidants and wakey-ness  is sustainably farmed and all of the Starbucks employees get educational benefits and health insurance. So this is the good stuff.

 

A look at the coffee numbers

Each cup of coffee we brew at home takes 2 ounces of the delightfully aromatic Starbucks grounds. And in 12 ounces there are 72 US teaspoons so that means we get 36 cups of coffee from a bag of grounds.

This bag costs us $8.59, or 26 cents a cup. A year of home brew will costs a whopping $96 dollars. For two people that is $191 bucks. We use half and half for an additional $2.29 a week or $119 a year. Total coffee expense is around $310 a year.

That same drink is a very reasonable $1.85 made by a hard working barista. For two people over a year that would be $1,317.

Wow, a savings of $1317-$310 or $1007 over a year.

Right?

Wrong!

A second look at the numbers

This is what is so counter intuitive about frugality. Frugality itself is a compounding machine. It took me years to notice it and first I shrugged it off as improbable if not impossible.

What is missing here are the secondary and tertiary by side effects.

The first is the actual financial savings.

Lets take a look.

It takes me less than a minute to scoop the coffee, add the water and push the button.

The drive, wait and drive back to our local Starbucks is 20 minutes.

While waiting for the coffee I usually make breakfast. Nothing better to do as I have plenty of time. But with a 20 minute commitment to pick up coffee in the morning I simply don’t have time to cook and I will add another $15 in breakfast vittles. Another $3750 in  annual expenses to add to the total.

And we aren’t done yet. It is a mere 4 miles to our local Starbucks and back. Sweet! Or is it? The federal government estimated cost of 51 cents per mile in car operating costs. Add another $2.04 to the cost or $532 bucks a year to the total.

  • Coffee savings – $1000
  • Breakfast -$3000
  • Car – $500

 

This results in a grand total  (and I rounded down a  lot here) of $4500 in expenses annually. That home brew actually saves you $45,000 over ten years.

The second benefit is even better. The quality of life effect is what keeps so many already financial independent people to stick with their frugal ways.

Once you have bought a coffee maker, got into the habit of buying ground coffee and then learned to operate the dang thing the actual process is easier than going to get coffee. And there is never a line.

Self taught barrista super powers

This means, after you become a coffee brewing expert, you will have a choice.

Choice 1: Stand in your kitchen drooling with one eye open until the coffee is ready about a minute or two later.

Choice 2: *Or* you can throw on some clothes, find your keys and shoes, rush out, feel the cold rain go down the back of your neck, fight for parking, wait in line and then zoom back home to reverse the process.

If both choices are available which would you choose? Yes the coffee isn’t quite a yummy as the store made stuff but your overall quality of life is so much better.

This is the power of frugality and of doing just some of the steps yourself.

The skeptics among you will note you don’t go to Starbucks 356 days a year and certainly don’t scoff down scones.  I don’t want you to believe me. I want you to try it out for a month and make your own assessment.

This is just a single example. You can find a lot more ways to pay for private school that are much bigger such as avoiding Black Friday, saving $3000 in a single weekend, or using the Granny Smith cash multiplier method.

 

An ode to Peapod

First up, this is an unsolicited article. No one is paying, pushing or promoting me to write this piece.

Here is my typical grocery shopping experience;

Grocery shopping experience diagram -multiple ways to waste
Grocery shopping experience diagram -multiple ways to waste

I will admit, I am very impressed with people who can clip coupons, keep a price book and then find everything on their list, in exactly the right size, in a massive store with an average and ever changing 47,000 items in the store. I have tried many times and repeatedly failed at doing so.

We kept seeing a Peapod truck at the neighbor’s house each week. We quietly snickered and thought even though they are super frugal on everything else they had a hidden weakness.

My interest was piqued so we tried an experiment with this online grocery thing. We intentionally keep detailed records so it was easy to load a Peapod cart online and compare to last weeks grocery expenses.

Oh man was it easy to find stuff. They have a search engine! And it was certainly educational. For example, the two red peppers I buy each and every week have gone up from 50 cents in the summer to almost $4 in the winter.  Green peppers will do just fine and only cost a buck.

That kind of real-time-pricing-feedback adds up – in our case to $50 less than we normally spend (that would be $2,400 a year). So we went crazy and got the Peapod meal kits (all the ingredients in a box). And it was *still* $20 cheaper and we will waste less food as a result. Hmm.

A few months in we found we saved about $300 a month on groceries. And this probably points more to my ineffectiveness as a shopper and my susceptibility to “buy it now while supplies last” sales. Know thyself.

If you end up trying this or a similar service I would love to know how it works out for you – or if it doesn’t. And if you are inclined to do so please use my Peapod referral link and hook me up with free (Green) Bell Peppers for an upcoming stir fry. Woot!

Wait for it. Wait for it. Steady. Steady…..Now!

When paying for tuition for years on end I found that be willing to wait can be an ally.

We are going camping soon and usually it’s a school thing (includes tents). But this outing is a separate tent and we needed some gear.

Reviews of the low end tents revealed they are ok unless it gets windy or rainy. A wet tent would not be good for little (or big) people so we wanted to upgrade. Car camping tents can become really expensive quickly. And each night not in a hotel sort of pays for itself.

What we wanted it the glorious 6 persons REI Base camp tent. Ventilated awesomeness. With a footprint and tax it comes in a very reasonable $500. However, we aren’t reasonable. We are paying for private school. So I kept an eye out for a week, and then weeks, and then months. Prices would vary but even on Ebay the used ones were going $300+ something. They must be great tents. We spent weeks looking for one to rent from numerous places (check out lowegear.com if you camp).

Didn’t work out. We really wanted that one. But we have since learned it can be productive to be ok with second place. REI (who we like to support because of their fantastic educational programs and supporting community and the natural environment) had a two week only sale in the spring – 25% off on goods upon check out.

They only had one tent for sale with that would comfortably fit us – a Big Agnes. The reputable brand had a model with good, but somewhat mixed reviews. It was presumably on the way out for improved models so it was 25% off. After further reading I realized it wasn’t selling because bad reviews were being posted about that actually referenced a previous model. So this was an excellent tent and more than we needed for basic car camping and was small enough to serve for other trips as well.

Curious, I put the tent in the basket and saw and additional 25% off. This sucker, new, we being dumped because of mistaken reviews (or REI needed to clear inventory, or both).

It was cheaper to buy this tent new than rent the exact same model. By being patient, and flexible we were able to get an excellent tent for a price that didn’t bust our budget.

Big Agnes Tent

Not a camper? It is low cost adventure option. The long weekend we have planned would have been $600 in hotel costs alone – it is much less money to camp for this particular outing.

 

The simple life

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.

 

Mountains in Italia
By Marco Bonomo – https://unsplash.com/photos/Sa7787z58VQ/, CC0, Link

Five scholarships for the 2017

Did you know financial aid and scholarships are available to help pay for private school tuition?

Income and frugality will be your core mechanism but financial aide can help.  Here are five scholarship sources  to get you thinking about it.

  1.  Your child’s school. Most private schools have financial aid and requests are typically assessed by an independent review board. You won’t know unless look into it.
  2.  The Louisiana School Choice program  had a number of rebates, tax deductions and school choice options. Research programs in your state and keep an eye out – this might expand with the new administrations education appointment.  Georgia has already handed out $117 million in tax credits in 2017.
  3. Or how about an academic achievement scholarship?
  4. Or maybe the better chance scholarship or the Jack Kent Cooke young scholars program is the scholarship for you.
  5. Not enough? Here are 50 more private school scholarship options.

While saving money  will be the driver a small scholarship can certainly help. Feel guilty about applying? Don’t – this isn’t for you.

Be ok with second place

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.

 

 Lt. j.g. Aaron Lanzel takes second place at the Armed Forces Cross Country Championship with a time of 39:32. Source: Wiki Commons
Lt. j.g. Aaron Lanzel takes second place at the Armed Forces Cross Country Championship with a time of 39:32. Source: Wiki Commons

The Granny Smith cash multiplier method

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.

US Currency - Source Wiki Commons
US Currency – Source Wiki Commons

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

caption2
By No machine-readable author provided. Fievet assumed (based on copyright claims). – No machine-readable source provided. Own work assumed (based on copyright claims)., Public Domain, Link

organic apples every year (ok, more like $50 but I want to be conservative here to make a point).

And we placed it on the west side of the house to shade (and cool the air) going into the AC and near the house.

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.

How to save $3000 in a single weekend

This weekend we had quite the coup on the financial front. In short, we saved $3000 in a single weekend. The largest portion of these savings is very counter intuitive. Specifically, it is something we *didn’t* do that resulted in the savings.

Our sidewalk has sunk  down into the ground quite a bit and we need it back here on earth. To do this we were considering hiring a contractor to repair and replace our entire front sidewalk.

Grassy Slate Sidewalk - Source: Wiki Commons
Grassy Slate Sidewalk – Source: Wiki Commons

We diligently obtained lots of quotes – some as high as $8000 and one  contractor quoted us is a good deal at $2000. And the contractor seems excellent. And the firm is made up of U.S.  military service veterans.  So, heroes.

And then we paused.

We are all correctly hardwired to an action for bias. But to pay for school means to prioritize spending in a most singular way. And that often means *not* taking action. After some thought we decided to pass. $2000 saved immediately. There are lots of other much lower cost options available to us. The alternatives aren’t as quick, or as fancy looking, as a new slate sidewalk. But a $40 slate patch serves a more important purpose.

Many people say this and I can’t stress it enough; The most effective way to save money is to not spend it.

It is not the 2 for 1 deals, coupons or thrift stores that get it done. Those are indeed effective tools – but only after not spending is considered as the first choice.

The saving super power of not doing anything is often forgotten. It goes against our bias towards action.

And it is sacrifice. That is what is required to pay the tuition for someone else. Embrace it. The lower cost solution still meets the need and makes room for something more valuable. It also has the benefit of keeping us from getting a little too proud or having the neighbors get envious of a brand new slate sidewalk. Instead they will see a nice and neat, but uninspiring, repair job.

So that is the first $2000.

The remaining $1000 was saved on a train trip using an Amtrak rewards card. We had enough points to take a required family trip for free. Score! This is what most of us will get excited about. Goods and services for free! Points! Free travel!

I want to reiterate that this isn’t where the magic happens. It happens on the cracked and aged (but still serviceable) sidewalk staying that way. Boring, simple and requiring no action. Embrace the self-restraint and acknowledge that it is difficult to do. The children aren’t the only ones who get an education from a private school.

Do nothing - Source Wiki Commons
Do nothing – Source Wiki Commons

$3000 saved in 2 days, most of it through pausing and then… doing nothing.

Are you sure you can’t afford  to pay for private school?