FA for 200k HHI
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Anonymous
Very few privates don’t consider home equity. Please name a few besides: Stanford USC Occidental Bard College CalTech Harvard MIT Princeton Chicago Whitman |
Anonymous
No, I cannot due to schedules. The schools don’t provide a bus to her this year for her academy program due to THEIR scheduling. We had to obtain 2 parking passes just for this to work. Trust me, I was not thrilled with any of this. We live walking distance to all 3 of our neighborhood schools. The other “choice” was to make her drop the Academy program class that literally kept her alive during pandemic year. It would be nice if we could put that money into savings, but what is your child’s mental health and happiness worth to you? And again, the second stupid car payment wasn’t in the plan. We planned to keep the 2 paid off vehicles until the wheels fell off. Then the Toyota (yes, you read that right) died for no reason. Repairing it was too expensive, so we had to purchase another vehicle against our will because I need a vehicle to get where I need to go. I wish public transport was an option for any of this, but it is not-I looked. |
Anonymous
Many schools that count home equity cap it. Often 1 to 1.5 of income. If you have 100k in income. And 3 mm in request. It’s capped at 100-150k. And “taxed” as an asset at 5.6%. So your 3mm will cost you 5-8k a year in tuition. Not bad |
Anonymous
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OP here: We are a blended family that combined assets 5 years ago. As blended families go, we purchased a home and a lot of things that we needed to fill that home, repairs, emergencies etc- I'm currently dealing with a failed sump pump and flooded basement.
We've been spending A LOT just due to where we are in life and the juncture at which we met. In terms of equity, maybe 80-100k? We would like to save more $$, but it's very difficult at the moment and there isn't much wiggle room in terms of lifestyle. In 4 years we will be in a much better position debt to income ratio wise and will have more to cash-flow. Our 1st student will likely attend community college or a regional. Other parent has a healthy 529 and we can generally afford his options as he will likely be a commuter. Our 2nd student is where it gets tricky. They are very talented academically and will likely submit to Ivy's as target/reaches. They will be in the running for a lot of merit aid. We're more concerned about the price tag of their education because it's unknown if the other parent has anything to contribute and/or would participate. So in 4 years, we will have 1 in college at either a community college or regional university that is 70-100% paid for. And unknown on kid #2. |
Anonymous
OK, so I don't think it is as dire as it sounded originally, then. One kid is probably taken care of by the other parent based on what you are saying. Kid #2 can aim for Ivies if they wish, but also should apply to some schools where it is cheaper/they might get great merit aid. Start saving when you can into whatever vehicle works for you - 529, savings accounts, etc. Like you said, by that point, you hopefully will be in a better financial position. You can possibly cash flow some of it, have the kid take out some the loans they are eligible for and you can also do parent loans if needed. It isn't unheard of for parents to take on an extra job when both kids are out of house to help pay college. Do you have a financial advisor? They might be able to help walk you through some of this. My child just found out she is getting offered a spot at her "dream school" (her dreams don't involve Ivies-not even close) Of course, we have to take a look at what the financial offer is. I have a bad feeling it will wind up being too expensive and she will either wind up at one of our state schools or a private that is throwing a ton of money at her to make it even cheaper than the state school. I'm not going into debt when she has other more reasonable options. |
Anonymous
Thank you. This is great perspective. I didn't think about a second job, but you're right, I would have a lot more time and wouldn't mind it if it came down to avoiding predatory loans. I'm also not loan averse. Honestly, we do have a financial advisor but I feel so behind that I'm embarrassed to ask/ don't want to know the hard truth. I just want to be able to set expectations for student #2 before he throws himself into high school and starts setting his own expectations. |
Anonymous
Seriously, you never know - your second kid could win some huge scholarship and go basically free to an Ivy. But if they really are a great student, and you live in VA or MD, you can't go wrong with the flagships who might give merit. We stopped saving for a while when we hit some financial turbulence. Stuff happens. I think you are going to be OK, really. Don't be ashamed to ask your FA for advice on moving forward. That is what they are there for. |
Anonymous
They probably are using the IRAs as college savings. My sister thinks she's financially savvy and this is her strategy. Her DH will just be 59.5 when the first starts school. The problem is you can't save enough in IRAs, hence OP's problem. |
Anonymous
You should get some FA at Ivies if your kid gets in. Top LACs may also be generous. Work that NPC. Even schools that consider home equity often cap it (as a PP mentioned) or make it less consequential in their algorithm. Having 2 in school will also affect what you might get at these schools. We thought Smith would be expensive, but I was surprised by NPC figure. Work all the angles with merit schools and 3rd party scholarships and see what happens. If kid does get a decent deal at need-based school, wait a couple years to get a 2nd job, or it will negatively affect the aid. Also, calculate with just 1 student in college as well as 2, so you have a sense of cost once your first is no longer in school. |
Anonymous
| Not to beat a dead horse but I had no car in high school. Suburban MA where you could really use one. Got rides from parents and bummed off of friends. Was annoying as hell. Parents saved and sacrificed - never went on vacation except to grandparents- and paid for me to go to private high school and Duke with no FA on 100k HHI. It’s a matter of choices. |
Anonymous
Please stop with the car. That wasn’t op. And as the poster who talked about a car for my senior, we did not buy her one. She got a hand me down because she needed one in order to attend a FCPS academy program. They provided a bus the prior 2 years, but because her class was at the beginning of the day this year, FCPS does not provide an academy bus at that time. Me driving her back and forth would conflict with getting her younger sister to school and me getting to work. There is no one to ride share with and public transport isn’t possible. My husband bought himself a used vehicle over the summer, but then one of the other 2 vehicles we already had died. Unexpected 2nd car payment. It sucks, but such is life. $100k today would get you free tuition at lots of schools, so good for those folks. We make about double that, we ARE saving into retirement and 529s. We have made choices as best as we can. Life sometimes throws you curveballs. |