Can we afford $45k/year private for 2 kids? Stats included

[Anonymous]

Anonymous wrote:

Anonymous wrote:No way! Move to an area with good public schools.

There is no such thing unfortunately.

Where do you live that there isn’t at least a decent elementary school district? I’m sensing troll.

Elementary is 12 years of schooling for 2 kids * 50k = 600k of savings alone.

Never heard of a single city in America without at least one suburb with good schools.

[Anonymous]

Anonymous wrote:frankly your after tax brokerage and cash savings is very low for your income level. With mortgage and tuition to gobble up 180k per year you better be in your knees praying each night for those RSUs to pan out. because without that and your extravagant expenses you’re gonna look dead ass broke. Many people who have kids in private school have family money that are the safety net.

Not us. When we started private school for our kids (both with learning differences) 15 years ago, we had very little savings and DH pursued a career change and just started a new consulting job at $250K a year plus bonus. Very little in the 529. DH insisted on private school, and I was very apprehensive. We made sacrifices. We also live in a very "good school district."

We drove older cars and took cheap vacations, etc. etc. Fast forward, DH has done very well professionally and I am so glad we made the decision to go private based on what has happened in public schools in recent years. Oldest is in a top 20 college now and youngest is thriving in private HS. Salary and net worth have increased significantly so that now our tuition payments are basically a drop in the bucket. Our 529 is fully funded for both kids.

[Anonymous]

Yes. And the gains that your kids get from the befits of good schooling early on compound like money on the S&P. Mine all did private preK to 8th. Then 2 did private HS, one is at TJ, and the little one wants to go to TJ for HS. Give them trust and a great foundation, then give them the power to decide for themselves. Trust me, it pays off big time in HS and beyond.

BTW this is much more than a money decision. It's an actual parenting and philosophy decision. If it's just about the money, the answer is go public, no matter how much you make.

[Anonymous]

Anonymous wrote:

Anonymous wrote:OP, when does your stock vest? What is ratio of stock to cash bonus? How stable are your jobs/industries? Is one of you a doctor (and therefore has more job security)?

One person’s stock vests monthly, roughly $6-10k per month. The other person’s stock vests quarterly and is roughly $30-45k per quarter. Both stocks have done well hence the upper ranges. One bonus guaranteed at 18% of base. Both in tech, but different companies and industries within tech.

What have you been doing with the RSU before now? I wonder if you could steadily sell it (and invest appropriately but not be beholden to two stocks) and earmark it for “school” and move off the rest. So that in a downturn, you don’t feel pressure on how to fund school while maintaining your other costs and savings.

We are newly doing private HS and are in a different but similar position and that is part of how I am approaching it. But HS is only four years (but would not be good to pull out midway).

[Anonymous]

Anonymous wrote:

Anonymous wrote:frankly your after tax brokerage and cash savings is very low for your income level. With mortgage and tuition to gobble up 180k per year you better be in your knees praying each night for those RSUs to pan out. because without that and your extravagant expenses you’re gonna look dead ass broke. Many people who have kids in private school have family money that are the safety net.

Not us. When we started private school for our kids (both with learning differences) 15 years ago, we had very little savings and DH pursued a career change and just started a new consulting job at $250K a year plus bonus. Very little in the 529. DH insisted on private school, and I was very apprehensive. We made sacrifices. We also live in a very "good school district."

We drove older cars and took cheap vacations, etc. etc. Fast forward, DH has done very well professionally and I am so glad we made the decision to go private based on what has happened in public schools in recent years. Oldest is in a top 20 college now and youngest is thriving in private HS. Salary and net worth have increased significantly so that now our tuition payments are basically a drop in the bucket. Our 529 is fully funded for both kids.

Op here. This is very helpful to read, thank you. Thinking we will go for it.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:OP, when does your stock vest? What is ratio of stock to cash bonus? How stable are your jobs/industries? Is one of you a doctor (and therefore has more job security)?

One person’s stock vests monthly, roughly $6-10k per month. The other person’s stock vests quarterly and is roughly $30-45k per quarter. Both stocks have done well hence the upper ranges. One bonus guaranteed at 18% of base. Both in tech, but different companies and industries within tech.

What have you been doing with the RSU before now? I wonder if you could steadily sell it (and invest appropriately but not be beholden to two stocks) and earmark it for “school” and move off the rest. So that in a downturn, you don’t feel pressure on how to fund school while maintaining your other costs and savings.

We are newly doing private HS and are in a different but similar position and that is part of how I am approaching it. But HS is only four years (but would not be good to pull out midway).

The quarterly RSUs are only just starting to vest, we did not have them previously. I like your approach to sell them though and earmark specifically for school. Right now we are earmarking them for various savings vehicles in the future.

[Anonymous]

Anonymous wrote:Yes. And the gains that your kids get from the befits of good schooling early on compound like money on the S&P. Mine all did private preK to 8th. Then 2 did private HS, one is at TJ, and the little one wants to go to TJ for HS. Give them trust and a great foundation, then give them the power to decide for themselves. Trust me, it pays off big time in HS and beyond.

BTW this is much more than a money decision. It's an actual parenting and philosophy decision. If it's just about the money, the answer is go public, no matter how much you make.

Thank you for sharing this. Agreed it is a parenting decision, and we are grateful to have the income where it can actually be a decision point for us. When our first was born we never thought we would even have the option to consider schools like these.

[Anonymous]

Anonymous wrote:I know this question has been asked time and time again, but wondering if the wise folks of DCUM can give some thoughts on if we can comfortably afford private school for 2 kids, ages 4 & 1. We are considering private K-12 for both children at $45k/kid and wondering if we can make it work for the long haul with tuition increases etc.. Both of us work and are fairly young in our careers (early 30s), so we don't have a substantial nest egg to fall back on.

Our stats:
HHI $650k, this is recent and very heavily on stock RSUs. $380k is salary/guaranteed bonus and the remaining is stock
401k: $400k (max out, both have access to mega back door)
529s: $75k (planning to continue to fund $16k/year total)
HSA: $50k (put in max every year and do not use it)
After tax brokerage: $30k
Cash savings / emergency fund: $45k
Home equity is roughly $700k, have about $800k mortgage at 4%; $7.4k / month. No other debt.

Biggest concern is our liquidity and heavy reliance on stock which is volatile. Also concerned with signing up for tuition payments so early on, and needing to maintain high earning power for the next 2 decades.

Even if you could afford it, it would be a waste of money.
This is what I would do. Send kids to good public schools.
I would invest the $90k yearly. Do this instead: Open an account an invest the $90k. In 14 years, it would have grown to $2.6m. Wait 7 more years and you have $4m. Your kids will be 25 and 22.
Give it to them. That’s a rocket launch into life. It’s a much better value to them.

[Anonymous]

Anonymous wrote:Doesn’t sound smart to me. You want to spend $1.5m before you even get to college costs? Why? Invest that money and your kids will have higher assets and an easier life than what they would get from attending a private school for 12 years. I say this as a parent of older teens - it makes no difference. Really.

Why do you want their kids to mingle with poor kids in public schools?
They need to be surrounded by other rich people who will lift them up. This is priceless.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I know this question has been asked time and time again, but wondering if the wise folks of DCUM can give some thoughts on if we can comfortably afford private school for 2 kids, ages 4 & 1. We are considering private K-12 for both children at $45k/kid and wondering if we can make it work for the long haul with tuition increases etc.. Both of us work and are fairly young in our careers (early 30s), so we don't have a substantial nest egg to fall back on.

Our stats:
HHI $650k, this is recent and very heavily on stock RSUs. $380k is salary/guaranteed bonus and the remaining is stock
401k: $400k (max out, both have access to mega back door)
529s: $75k (planning to continue to fund $16k/year total)
HSA: $50k (put in max every year and do not use it)
After tax brokerage: $30k
Cash savings / emergency fund: $45k
Home equity is roughly $700k, have about $800k mortgage at 4%; $7.4k / month. No other debt.

Biggest concern is our liquidity and heavy reliance on stock which is volatile. Also concerned with signing up for tuition payments so early on, and needing to maintain high earning power for the next 2 decades.

You forgot to mention anything about your obvious reliance upon family money. This is the only explanation for your financial stats (aside from being a drug dealer). Since you’re still operating at the good graces of the mommy and daddy pocketbook, you should press forward with private school all the way. While public is an option for some, it takes a parent of high character and discipline to make that work; sounds to me like you’re the type that can only succeed when others do all the heavy lifting.

I did mention in a follow up that we received some down payment help due to an inheritance, but the rest of our savings are ours. Sorry this is so difficult for you to believe. How sad that you are the type who lashes out at others. You certainly don’t seem to be a parent of good character with your response.

Agree with you OP, this person’s posts are over the top and point to deep insecurities and jealousy.

[Anonymous]

Anonymous wrote:I know this question has been asked time and time again, but wondering if the wise folks of DCUM can give some thoughts on if we can comfortably afford private school for 2 kids, ages 4 & 1. We are considering private K-12 for both children at $45k/kid and wondering if we can make it work for the long haul with tuition increases etc.. Both of us work and are fairly young in our careers (early 30s), so we don't have a substantial nest egg to fall back on.

Our stats:
HHI $650k, this is recent and very heavily on stock RSUs. $380k is salary/guaranteed bonus and the remaining is stock
401k: $400k (max out, both have access to mega back door)
529s: $75k (planning to continue to fund $16k/year total)
HSA: $50k (put in max every year and do not use it)
After tax brokerage: $30k
Cash savings / emergency fund: $45k
Home equity is roughly $700k, have about $800k mortgage at 4%; $7.4k / month. No other debt.

Biggest concern is our liquidity and heavy reliance on stock which is volatile. Also concerned with signing up for tuition payments so early on, and needing to maintain high earning power for the next 2 decades.

You lost me with “the wise folks of DCUM”. Lol

[Anonymous]

Anonymous wrote:I know this question has been asked time and time again, but wondering if the wise folks of DCUM can give some thoughts on if we can comfortably afford private school for 2 kids, ages 4 & 1. We are considering private K-12 for both children at $45k/kid and wondering if we can make it work for the long haul with tuition increases etc.. Both of us work and are fairly young in our careers (early 30s), so we don't have a substantial nest egg to fall back on.

Our stats:
HHI $650k, this is recent and very heavily on stock RSUs. $380k is salary/guaranteed bonus and the remaining is stock
401k: $400k (max out, both have access to mega back door)
529s: $75k (planning to continue to fund $16k/year total)
HSA: $50k (put in max every year and do not use it)
After tax brokerage: $30k
Cash savings / emergency fund: $45k
Home equity is roughly $700k, have about $800k mortgage at 4%; $7.4k / month. No other debt.

Biggest concern is our liquidity and heavy reliance on stock which is volatile. Also concerned with signing up for tuition payments so early on, and needing to maintain high earning power for the next 2 decades.

Really???
This post is a poorly disguised humble brag.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I know this question has been asked time and time again, but wondering if the wise folks of DCUM can give some thoughts on if we can comfortably afford private school for 2 kids, ages 4 & 1. We are considering private K-12 for both children at $45k/kid and wondering if we can make it work for the long haul with tuition increases etc.. Both of us work and are fairly young in our careers (early 30s), so we don't have a substantial nest egg to fall back on.

Our stats:
HHI $650k, this is recent and very heavily on stock RSUs. $380k is salary/guaranteed bonus and the remaining is stock
401k: $400k (max out, both have access to mega back door)
529s: $75k (planning to continue to fund $16k/year total)
HSA: $50k (put in max every year and do not use it)
After tax brokerage: $30k
Cash savings / emergency fund: $45k
Home equity is roughly $700k, have about $800k mortgage at 4%; $7.4k / month. No other debt.

Biggest concern is our liquidity and heavy reliance on stock which is volatile. Also concerned with signing up for tuition payments so early on, and needing to maintain high earning power for the next 2 decades.

Even if you could afford it, it would be a waste of money.
This is what I would do. Send kids to good public schools.
I would invest the $90k yearly. Do this instead: Open an account an invest the $90k. In 14 years, it would have grown to $2.6m. Wait 7 more years and you have $4m. Your kids will be 25 and 22.
Give it to them. That’s a rocket launch into life. It’s a much better value to them.

This

[Anonymous]

Anonymous wrote:

Anonymous wrote:Yes. And the gains that your kids get from the befits of good schooling early on compound like money on the S&P. Mine all did private preK to 8th. Then 2 did private HS, one is at TJ, and the little one wants to go to TJ for HS. Give them trust and a great foundation, then give them the power to decide for themselves. Trust me, it pays off big time in HS and beyond.

BTW this is much more than a money decision. It's an actual parenting and philosophy decision. If it's just about the money, the answer is go public, no matter how much you make.

Thank you for sharing this. Agreed it is a parenting decision, and we are grateful to have the income where it can actually be a decision point for us. When our first was born we never thought we would even have the option to consider schools like these.

My kids didn’t go to TJ. They went to the local publics, both went to top 20 colleges, and both went into high-paying professions and are doing extremely well.

[Anonymous]

Anonymous wrote:People who haven't been living at a higher income level and adjusted lifestyle are the perfect ones to invest in more for education. If you are planning to max out every saving vehicle and do mega backdoor Roth, you can afford the tuition. Cut some on just the two mega backdoor Roth and you can afford it.
It is also likely that you'd be fine retiring at your recent SES level rather than your updated one, so I think you are too worried.
That you were willing to put so much into your house earlier at what sounds like a much lower income, has ended up being good outcome wise, but could be seen as a riskier decision at the time than private school now. Changing schools if $$ is an issue is also a lot easier than unloading an expensive house in most markets too.

Without commenting on the particulars of OP's situation, this is exactly right.