Sending your children to private school can mean making some big sacrifices.
Lauren Greutman and her husband moved to a smaller home so they could afford to send their three children to a private religious school.
“We have definitely had to sacrifice things,” said Greutman, 33, who lives in New York. “We are putting less money into retirement and we don’t do many vacations. We don’t do a lot of extracurricular activities either.”
But for the family, it’s worth it. The children enjoy a “smaller class size, and teachers are given more flexibility to teach the way they want,” Greutman said. “The decision to send our kids to a private school was easy.”
Private education is a pricey choice. In the US, the average private school tuition is approximately $9,195 per year, according to PrivateSchoolReview.com. In cities such as New York, tuition can be higher than $30,000 per year. In the UK, parents pay a whopping £12,345 ($19,942) per year on average, according to a study from Lloyds Bank. In Australia, the national metropolitan average to educate your child at a private school through to the final year is AUD$458,995 ($406,376), according to the Australian Scholarships Group.
But if it’s a move you are considering, here’s what you need to know — and do — to prepare.
What it will take: You must be able to take on a significant expense for multiple years without compromising your other financial goals, such as retirement.
How long you need to prepare: Private school is a massive expense, so the sooner you start planning, the better. In addition to saving as much and as early as possible, you may have to get your child on the wait list as soon as he or she is born for some exclusive institutions.
“It is not uncommon for schools to want some form of financial commitment, such as an acceptance deposit, from parents two years before starting school,” said Sarah Lord, managing director of Killik Chartered Financial Planners in the UK.
Do it now: Take an honest look at your finances. Private school is a long-term commitment. You should be certain it’s an expense you can manage for the foreseeable future.
“I’ve had people come in with multiple goals — vacation home plus private school — and after I’ve done the analysis, they often have to decide which goal is more important,” said Thomas Fisher, a financial planner with Fisher Financial Strategies in Massachusetts in the US.