Private school -- what portion of income are people spending?

[Anonymous]

Anonymous wrote:I think the problem is that people aren't answering the question, the question was what proportion of income are people spending... People are treating this like the money forum, but the OP specifically didn't ask that.

People who could have helpfully answered have run away from the thread.

The $90k of private school tuition for our two kids is about 2-5% of gross income, depending on the year.

[Anonymous]

Anonymous wrote:OP here. I didn’t mean for this to become a critique of our spending decisions, but that’s on me for including our budget info. Now that it has, though, just want to be clear that our savings isn’t only the $70k I put in a later post. I just forgot to include that $70k in my original post detailing our savings, which also includes $250-300k in 401k (depending on the market), $200k in stock and alternative investments, and $600k in home equity. Is that still pitiful? My spouse and I both went to grad school and are 31 and 36, so haven’t even been in our careers that long. Considering our income was around $450k until a few years ago and we came from a high cost of living area, I don’t know what we could have done differently to save more.

Ultimately I understand we have to decide what we’re comfortable with and weigh other non-financial factors, but to bring it back to the reason for my post, it’s helpful to get context from other people on the cost.

Of course it isn’t pitiful, but I would prioritize yourselves before shoveling money into private school. You have the opportunity to be financially secure and private school is going to slow that down significantly. Save save save and then private school.

[Anonymous]

Tuition for 2 kids clocks in right around $85000, not counting other contributions to the school during the year (Annual Fund for example). Gross income varies a bit but on the low end that would make the tuition about 5-6% of our gross income.

[Anonymous]

4 kids. HS only for private. Depending how many kids were in school at the same time, it was 20-25% gross income.

We are older and have always saved. Single income household for a decade when kids were younger.

3rd kid is a Senior in HS. Worth every penny, to us.

If it’s important to you, you make adjustments as needed.

[Anonymous]

HHI 2.5 mil.

2 kids tuition-$ 90k

So after taxes it’s about 7 percent of our post tax income. So we really don’t even notice it.

[Anonymous]

Sending my public school kid to boarding school next year. 529 plan is fully funded for college. Boarding school will cost 10% of our HHI for the next 5 years (8-12 grade). Boarding school needed for his sport as we’ve reached the limits of training he can get here. We’re older and our HHNW is about $6m.

[Anonymous]

OP here again. Thanks for all of the financial advice. Even if unsolicited, it’s interesting. Last year was our first full year making our current income and we saved about $150k - before that income was almost half and a few years before that closer to $250-300k because my spouse worked on starting a business for 2 years and made zero during that time. So everything we saved was for retirement and a house. It looks like many people in our current income bracket have been making more money for longer than us, and have significantly higher savings. This explains why so many of our peers don’t seem hesitant about private school tuition. Point is well taken that spending the next few years saving instead of paying tuition would be wise.

To the question about biglaw partnership, yes one of us is a senior associate in biglaw up for partner in 1-2 years. Prospects appear to be very good according to partners in practice and firm managing partner, but of course there are no guarantees. Income would increase materially if that happened, but practice isn’t the most profitable at the firm, so it still wouldn’t be sky high (and never will be).

[Anonymous]

You can afford it - you just have to decide and the non-financial factors will indicate how important it is and then you can prioritize.

But, as parent of kid who also did some public school, don't rule out that for a few years which is good for many reasons and also saves money during the younger years when you can build more wealth.

[Anonymous]

Each child is less than 5% on income for tuiton. So not a lot.

[Anonymous]

Anonymous wrote:Also, letting go of your nanny at K is easier said than done. If you have demanding jobs and you like your house to be neat and your life to be organized and relaxing, you’re going to want to keep the nanny on if the nanny is willing. That’s what we did.

This is absolutely true. I needed after-school help for many years after K because music lessons, sports practices, etc. all started well before either my husband or I could get home (and I only work part time). So you will actually need after-school help and good cleaning people. Gets easier once they are in high school.

As an aside to all of this, and definitely unsolicited, think about what big law life means. Someone mentioned golden handcuffs - this is definitely an issue. People put themselves in the position to not be able to get out even if they are miserable. Clearly this is not the case for everyone and many people are very happy in big law. We opted out of it pretty early (I was never interested - I am a public interest attorney) because we saw its impact on many other family members and friends. Instead, my husband opted for a more niche practice area with more moderate sized firms (~300 attorneys?) that has done very well and given us a ton of flexibility. He's had time to coach sports teams when the kids were younger, able to watch almost all of their games in middle and high school (our youngest is now in high school), attend all school events and we've been able to travel often without him having to work throughout the vacation. Yes, we made some financial trade-offs but we are very comfortable. As to schooling, we figured it was easier to go from public to private rather than private to public (although some do this too). One stayed in public and the other switched to private. We just did what was best for each kid. That's just my two cents - feel free to ignore it!

Lastly, ignore the poster(s) calling your savings pathetic. I would hate for someone to judge my financial decisions in my 30's. With nine years of post-secondary schooling (and a .
year off between grad and law school) I was pretty close to 30 when I finally finished. My finances were not something I would have wanted to be examined publicly at that point! But we worked hard and are happy with where we've landed.

[Anonymous]

About 3% per kid off gross.

[Anonymous]

1.1m gross income and 132k tuition for three kids. We notice the checks but don’t really sweat the cost. This country definitely needs higher taxes on the wealthy!

[Anonymous]

Op, people on this forum are all obsessed with savings. People who only have $5M net worth at age 40 wonder why they aren’t doing better.

We have 4 kids in private school and tuition this year was $170K. HHI is low seven figures, so this is a significant chunk of our income. DH recently made partner, however, and his firm is sort-of lockstep, so we expect income to go up. We still save a lot of money, since lifestyle is fairly modest other than private school and a large house (we have 4 kids!). As DH’s income goes up, we put all the money into savings.

If you are both in big law and do private school you will continue to need a nanny - there are a lot of days off and vacation in private school and you can’t cobble together childcare with aftercare alone unless you have family who can help out regularly.

For us, private school is more than worth it. We started our oldest two in public and moved them both in early elementary- we are in the Whitman district. But the added value from private school is worth the money. Frankly, education is a huge value for us so why would we not spend money on it if we can (which still being responsible)? I will also add that while I don’t think the private school calendar and social culture is great for households with two working parents, there is much better communication from the admin and teachers so I feel much more knowledgeable about how my kids are doing.

[Anonymous]

Another big law family here - we got rid of our full time nanny when our youngest started K and hired her back about 1.5 years later when she was looking for a different job. You will not be able to survive with two working parents in private school without full time care. They have too many half days, days off, etc. Our spring break is something like 8 days off of school, and that is just spring break.

[Anonymous]

OP, you could also move from a nanny to an au pair when kids get older. That could bring some savings.