Good financial management helps ensure your child’s private education
Having your children benefit from private education is an excellent gift. Smaller private or private religious schools have smaller classrooms, allowing teachers to give each child more time. However, an education in a private school is more expensive, which may make it difficult to find the necessary money. Good financial management can help make it less difficult for them to stay in a private school.
Understand the cost
At the start of the school year or before enrolling your child, talk with school staff to make sure you understand the total cost. This figure will vary from school to school, as well as by location, and a secondary school will cost more than a primary school.
On average, money geek said, a private K-12 school will cost about $12,350 per year. Additionally, you will need to think about fees, electronics, books, transportation, lunches, school and sports uniforms, lab equipment, etc.
Find out about financial aid
Some schools can help low- and middle-income families with tuition. Experian mentions that some schools do. Also, having more than one child in a private school will often qualify for a discount. You may need to apply for the aid every year. Often a monthly payment plan can be worked out – or working as an assistant – in some way – at school can also help keep costs down.
Scholarships may also be available for students who need them. Several third-party organizations, religious communities, and even some employers may offer scholarships for K-12 students. Ask the school secretary if any of them are available.
Determine your budget
After knowing the cost, review your current budget to make sure you are bringing enough money to afford it. Often both spouses have to work to pay for their children’s private education.
You will likely need to exercise careful financial management to ensure that your children can spend 12 years or more in private school. These schools may also offer kindergarten through 4th and 5th grade to help children prepare for first grade.
At the same time, you don’t want to sacrifice having enough cash on hand for an emergency fund and a little for a vacation or two during the year. It is necessary to have some extra money for emergencies, because one of the spouses may become unable to work in the event of an accident or health problem.
When reviewing your budget, look for additional items you could live without. The list could include eating out often, regularly buying expensive specialty coffees, paying for lunches at work, magazine subscriptions, gym memberships, too many trips to the store, and the best cable TV services. (a simpler plan may suffice), etc.
Repay existing debt
As soon as you can, you want to pay off your debt. As long as you’re paying interest on your debt, that means less money to use for other things.
You might want to use the snowball method to help you reduce your debt. It means paying off any debt you have. Then add that same money to regular payments on your larger debt or debt with the highest interest.
If you have a lot of credit card debt, you might want to put it all on a new credit card that allows balance transfers. Many new credit cards give you 12 to 18 months of no or low interest, allowing you to reduce your debt faster, as long as you don’t charge anything else on your old cards. Once your debt is paid off or reduced, you will have more money to give your children the quality education they need.
Consider college savings plans
Two savings plans have educational benefits – the Coverdell and 529 plans. Neither plan offers deductions on your federal taxes, but you can deduct them on state taxes in some states, if you live in this state.
The bank rate mentions that all interest earned on the 529 account is tax exempt when using the money for education expenses. You pay no capital gains tax and you can withdraw up to $10,000 for your education. The plans allow you to invest in high yielding assets, giving you much more interest than a standard bank account.
These savings plans have a downside: you have to use the money for education. Finance.Yahoo says this means that if a child decides not to go to school or dies, the money is blocked in the account. You can, however, use it for the education of another child or even use it for yourself, if there is no alternative.
A Coverdell Education Savings Account is another option for paying for a child’s education. It is more restrictive than a 529 plan and only allows you to contribute up to $2,000 per year. Also, if you make more than $110,000 a year, you can’t use it at all.
Funds can also be used for K-12
529 plans aren’t just for college; you can also use them to pay for primary and secondary education. As of 2019, funds from a 529 plan can also help pay off student loans. In addition, you can withdraw money from one account to pay for the education of several children.
Start saving early
If money is pretty tight, you also want to give yourself some time to start saving money for your child’s education.
Loans are available
If necessary, you may need to take out a loan to pay tuition fees. Some lenders have special loans available for private schools with lower interest rates. You can also take out a personal loan, but it will have higher interest rates.
Public Education Savings Accounts (CES)
Another option for getting help with tuition is an ESA, which is not the same as the Coverdell ESA. MoneyCrashers states that when a child is taken out of public school, the money for that child’s education is placed in a savings account. Sometimes this money can be withdrawn by parents for education. They usually receive a prepaid debit card for this.
An ESA differs from a voucher because you can use it for more than just tuition, like e-learning, tutoring, and even homeschooling in some places.
There are several ways to find the money you need for your child’s private education. Good financial management can make this possible, as well as taking advantage of available resources to reduce your costs, if they are available.
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