(Me, on the far left, circa 1980)
In this podcast, I talk about “Affording a Catholic Education for your Kids.” I coach many families who send their kids to Catholic or private schools – or want to – but the cost can be burdensome. Stay tuned because what you will hear today, will give you tips on how your family can afford a Catholic education for your kids, if that’s something that’s important to you.
I’ve encountered some money gurus who summarily dismiss Catholic or private grade school and high school as being a complete waste of money. As someone who attended Catholic schools for 11 years, I would have to politely disagree. Here’s why: as a parent, if you feel that a Catholic or private education is important to you and your family, then it’s not a waste of money. For some people, it’s important that their children learn the traditions of their religion and have moral teachings woven into their education. I am NOT making a judgment call that Catholic or private schools are superior to public schools. It may depend on which part of the country you live in. Based on my limited perspective, I know that my education prepared me very well for college and for life. So, you want to send your kids to Catholic or private school, or maybe you already are, but it’s having a negative impact on your financial health. How can you make it work?
Tips for Affording a Catholic Education
- First, realize that you will probably have to rearrange your priorities in your spending plan, also known as a budget. If your family doesn’t have a written spending plan, that is priority #1. If you don’t know what you’re spending, you can’t make an educated decision on what to cut back on. Here are some common places where you can reduce spending to free up money for tuition: Entertainment, Vacations, Clothing, Groceries/ Dining Out, Kids Activities and Sports.
- If you have a high amount of consumer debt, you may need to spend a year or two paying it off, so that you can afford Catholic or private school tuition. Look, it’s not going to negatively impact your kids if you choose to put them in public school for a year or two while you hammer on your debt. I went to a public grade school for 4th It wasn’t a money decision on my parents’ part. They didn’t care for the Catholic school in the town we had moved to in Pennsylvania. One year of public school didn’t negative affect my education. We had relocated to the Cincinnati area by the time I started 5th grade and I was back to Catholic school.
- Another area where you can cut expenses is with the cars you drive. By choosing to drive your vehicles for several years after they are paid in full and buying less expensive cars, you can free up a good chunk of money for tuition. Years ago when I was looking to replace my Toyota, I starting shopping around. I found that I could get a comparable model from Kia or Hyundai and save 25-30% over another Toyota or Honda. I’ve since paid cash for two Hyundai Sonatas. The first one I drove for 10 years. My current car is almost 3 years old and looks brand new. Look, if you’ve got kids, they are going to put wear and tear on your vehicles anyway, so don’t overspend on them.
- Are you currently receiving a tax refund of several thousand dollars? Meet with your tax professional and adjust your withholdings so your refund is as small as possible. This way, you can receive that money in your paycheck and use it for your Catholic school tuition.
- Did you know that you can use money in your Educational Savings Account (ESA) for private or Catholic school tuition? With middle America paying 25 to 30% in income taxes, this could save you several thousand dollars a year. Make a contribution to your child’s ESA, take the deduction on your taxes, then use the dollars in your ESA to pay your grade school or high school tuition. Consult with your CPA or investment professional to see if this is an option for you. The amounts that you can contribute change and income limitations may apply.
- Ask your relatives to help contribute. Many grandparents, aunts, and uncles are happy to help with kids’ tuition. Rather than buying lavish gifts for kids, especially when their really young and can’t appreciate it, ask relatives to just purchase a small gift and contribute the extra money to an Educational Savings Account. They may even be eligible for a tax deduction!
- Check with your local Catholic or private school to see if they offer a work study program. At my high school, they offered a limited number of these work-for-tuition programs. The girls would spend an hour or two after school helping to clean classrooms in exchange for reduced tuition.
- Your family may be eligible for reduced tuition based on your household income. If you qualify, this can make affording a Catholic education much easier, especially if you have multiple kids in school.
- I also know of people who specifically sought employment with the Catholic or private schools they wanted to send their children to. Many schools offer free or reduced tuition to their employees’ kids.
So, now we need to talk about the white elephant in the room. How do you know if you CAN’T afford to send your kids to private or Catholic school? If you are using debt to finance your child’s grade school or high school education, that is a big red flag. It doesn’t matter if you’re financing their tuition with credit cards, a home equity line of credit, or a 401k loan. It’s all bad news. If you are draining your emergency savings or your retirement accounts to finance your kids’ private or Catholic schooling, that’s a problem. If you are damaging your family’s financial health by using debt or draining necessary savings, you are risking bankruptcy for a discretionary expense.
A Catholic or private education is a WANT, not a need. If you want to send your children to a private school and you can reasonably afford it by rearranging your spending priorities then by all means, go for it. However, if you can’t afford it, there is no shame in sending your kids to public school. I know sometimes there can be pressure from parents or other family members to continue the tradition of Catholic schooling. However, your first priority has to be preserving the financial health of your family. God’s not going to be mad at you if you can’t swing the expense to send your kids to the same Catholic grade school your parents sent you to.
I’d love to know your thoughts on the subject! If you are currently sending your kids to private or Catholic schools, tell me what areas you’re cutting back on so you can invest in your children’s education. Do you have any additional tips for affording a Catholic education?
Thank you for listening to this episode of Financial Lifeguard on Duty. I invite you to join me for a coaching session either in-person or by phone. You can schedule your coaching appointment HERE. Also, be sure to grab a copy of my new book, “Money is Emotional: Prevent Your Heart from Hijacking Your Wallet,” which is available on Amazon. I look forward to talking with you next time. Until then, have a great week!