Reply to Budgeting for Private School -- Convince my spouse

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[quote=Anonymous]I would need to know more specifically how much you have already saved and are currently saving for retirement. If you are saving 15% of gross annual income a year and have $1M or so in investments, you might be alright. If you have a 15 year old (9th grader) plus a 12 year old (6th grader) and a kid at least 6 years younger that that, I'm going to assume you are in your early to mid-40's. That means you aren't young, but you also aren't terribly old. Money is a tool and you should spend it how you want to. Everyone has their priorities.

Your take home pay is $240,480 and you said you are maxing out two 401(k) plans which is $37,000. With an effective state/income/payroll tax rate of 33%, that means you are grossing $370k or thereabouts. Since you are budgeting that $5k for private school now, you can use that to cash flow college as well. If your kids go to state schools, that could be enough to get them through undergrad without loans.

The problem is that 15% of $370k gross income, which is the minimum you should be putting aside for retirement is $55,400, so your $37,000 in savings is not enough. Now you said your DH has a pension so that could fill the gap if the pension is well-funded and certain. You will need to look at your retirement plans closely to determine how to proceed. If you have solid retirement savings already, the pension is in good shape, and maybe some family money coming at some point, I think you can make it work.

Then the question becomes is this how you want to spend most of your money for the next 18 or so years until the youngest is through college? It will mean no extravagant travel, no fancy summer camps, limited test prep enrichment, longer working years, probably a leaner retirement, etc. If those are tradeoffs that matter for private school, then I don't think you will be destitute or anything. I can tell you as a 48 year old that I was all about working until I was 70 until my DH developed some health conditions and I learned that a genetic form of blindness affects most females in my family...you want a back up plan that you are comfortable with. My DH has quit and I would like to enjoy my 60s while I hopefully still have vision.

Good luck, you're going to be ok either way. It's a question of your priorities...[/quote]

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