Private Schools (home, vs, title)

[DawgPark]

Originally Posted by LovelySummer

Please let me in on this Dave Ramsey strategy for fast mortgage payoff.

Dave has his debt reduction strategies on his website.

But for us, paying off our house in 9-10 years was part of a bigger strategy, that yes, included private Christian school education for our children because that is a #1 priority for us. No new couch, granite countertops, trips to Europe/Hawaii, expensive restaurants for us because we don't care about those things.

How we did it and our entire strategy would take hours to post, but the bottom line is:

Buy less house than you can afford . . . if you could afford $2k/mth . . . don't go over $1500/mth
Pay 20% down in cash - never pay PMI
Go 15-yr mortgage at most - 30-yr mortgage on 200k will cost you 600k if you don't pay early
Take the additional $500/mth listed above and make extra principal payments starting on 1st payment
Study your amortization, ie monthly breakdown of P/I - CRUCIAL!!

and the most important part . . . that NOBODY in 2014 America wants to do . . .

SACRIFICE your spending today to prepare for your future.

There's much more to the story, and I'm sure some of the resident know-it-alls will criticize aspects of this, but the bottom line is buy less than you can afford, spend less than you make, and be fanatical about getting out of debt.

[LovelySummer]

Not following. What is the relevance of a financial planner relative to the questions posed on the thread re how to pay for their kid's education? Also, actually credit cards can be used very smartly in some cases. For example, some people will use a credit card to make a couple of payments, then pay it off when they get the money, get cash back and also rack of miles for the airline through the use of the card. Smart. Especially if you have one of those cards with zero percent interest for the first 15 months or so. We don't follow this approach but for a thinking person, credit cards can be used very smartly.

Originally Posted by deacongirl

I would think that paying for private school on a credit card would be strongly discourage by any financial planner.

[LovelySummer]

Mom working full-time while taking care of the kids, helping with homework and cooking and cleaning while Dad works is the American way. Didn't you know? If you didn't, ask a Mom. Any Mom. Women do quite a lot in this country.... And it has nothing to do with whether their kids are in private school. I bet you the same cousins that went to the public schools saw their Mom doing all of the above too. It's really not fair to women. It really has nothing to do with private school. What the country needs is a revolution in Men doing all the cooking and cleaning and still working full-time. Don't you guys want to start a revolution?

All the women's movement really did was add MORE WORK on top of what women were already doing in the home.... After the movement, they could bring home the bacon AND fry it up in the pan, and clean the pan after the bacon was finished cooking...and they did...and still do.

Originally Posted by Larry X

My wife would have had a way better childhood if her parents didn't decide to send her and her two siblings to private school. Because of that, her dad worked 6-7 days a week, and never spent quality time with the family because he was always at work or sleep. Her mother worked full time too and basically had to take care of the kids herself, help them with homework, cook, clean, etc. This caused stress and strife in their relationship. Now all three are grown, only one graduated from college, and the other two (including my wife) are college dropouts making very little money. Funny thing is, her cousins went to one of the worst public schools in America and they are more successful, graduated college with masters degrees and have good jobs.
So OP if you cannot comfortably pay for private, I recommend don't do it, just move somewhere with good public schools.

[LovelySummer]

Very cool. We are doing all of this too. I actually LIKE paying less for something than it is worth too. I'm twisted like that. LOL. Now tell me about studying the P/I schedule. What do we need to do? Is there a risk that money is not being allocated properly??? Thanks for your help. We've never studied the amortization schedule.

Originally Posted by DawgPark

Dave has his debt reduction strategies on his website.

But for us, paying off our house in 9-10 years was part of a bigger strategy, that yes, included private Christian school education for our children because that is a #1 priority for us. No new couch, granite countertops, trips to Europe/Hawaii, expensive restaurants for us because we don't care about those things.

How we did it and our entire strategy would take hours to post, but the bottom line is:

Buy less house than you can afford . . . if you could afford $2k/mth . . . don't go over $1500/mth
Pay 20% down in cash - never pay PMI
Go 15-yr mortgage at most - 30-yr mortgage on 200k will cost you 600k if you don't pay early
Take the additional $500/mth listed above and make extra principal payments starting on 1st payment
Study your amortization, ie monthly breakdown of P/I - CRUCIAL!!

and the most important part . . . that NOBODY in 2014 America wants to do . . .

SACRIFICE your spending today to prepare for your future.

There's much more to the story, and I'm sure some of the resident know-it-alls will criticize aspects of this, but the bottom line is buy less than you can afford, spend less than you make, and be fanatical about getting out of debt.

[DawgPark]

Originally Posted by LovelySummer

Now tell me about studying the P/I schedule. What do we need to do? Is there a risk that money is not being allocated properly??? Thanks for your help. We've never studied the amortization schedule.

No, extra payments should always be allocated to principal. You shouldn't have to worry about that.

What I'm talking about is the amortization schedule of your mortgage. You can view this on bankrate.com or any site that has financial/mortgage calculators. Here's a hypothetical of why it's so important.

30 yr mortgage (hypothetical)
1st paym = 91% Interest + 9% Principal
360th paym = 9% Interest + 91% Principal

On a 15 yr, it's much different . . . something like 30% Principal from the 1st paym. Reason #200 why 30 yr mortgages are great for banks, but bad for consumers.

My 1st mortgage paym was ~ $1600. Per the statement . . . approx ~ $400 Taxes/Insur + $100 Principal + $1100 Interest. I paid $1600 and only increased my equity by $100. That stinks. Alot.

So, if you looked at my amortization schedule, it would show at the very beginning of that 30-yr note, I was paying about $1100 in interest and $100 in principal per month. So, I reasoned that if I paid an extra $500 on top of the $1600, then I would in essence knock 5 months off the total term of the loan = benefit #1.

Benefit #2 is you progress through your amortization schedule much faster. That $500 extra at the beginning of the loan took me to Month 6 on the amortization schedule instead of Month 2. The further you go into the amortization schedule, the higher your % of principal per payment and the lower % of interest.

[dblackga]

Originally Posted by LovelySummer

Very cool. We are doing all of this too. I actually LIKE paying less for something than it is worth too. I'm twisted like that. LOL. Now tell me about studying the P/I schedule. What do we need to do? Is there a risk that money is not being allocated properly??? Thanks for your help. We've never studied the amortization schedule.

"Paying less than what it's worth." I'm puzzled -- where in the post did it say "Pay less than what it's worth"? The entire post seemed aimed at choosing a scaled-back lifestyle, while at the same time carefully managing payments so that you pay the mortgage off early and don't have to continue paying interest for years and years. It's worth what it's worth -- how much you choose to pay for it over time is under your control.

The note about checking amortization tables -- I think they mean that, since they are paying extra towards principal, they need to keep a stringent eye on their payment record to insure that the lender properly credits the extra payments to principal and not to "advance payment of interest", "escrow", or other areas that make THEM money.

[LovelySummer]

It doesn't say that. I added that as an extra that I also enjoy.

Originally Posted by dblackga

"Paying less than what it's worth." I'm puzzled -- where in the post did it say "Pay less than what it's worth"? The entire post seemed aimed at choosing a scaled-back lifestyle, while at the same time carefully managing payments so that you pay the mortgage off early and don't have to continue paying interest for years and years. It's worth what it's worth -- how much you choose to pay for it over time is under your control.

The note about checking amortization tables -- I think they mean that, since they are paying extra towards principal, they need to keep a stringent eye on their payment record to insure that the lender properly credits the extra payments to principal and not to "advance payment of interest", "escrow", or other areas that make THEM money.

[Larry X]

Private school don't ganrauntee nothing but money out your pocket. Its up to parents to get their kids through high school and prepare them for college, not the school. Most people just wanna be able to say their kids go to private school. Kids in public schools fair just as well in college and in life, so I don't get the point of going to private school unless you're rich or famous.

[LovelySummer]

Every public school teacher I know with the means sends his/her kid to private school, Larry. Seriously. This fact starts to say something. It's not a guarantee of anything. No. However, they are trying to do their best for their children. For example, I think the teachers recognize the limitations when a kidnergartener is in a class of 22 and one teacher. When there are almost 30 elementary school students of any grade and one teacher. Those teachers talk about what they could do for students if they had just 12-18 students, or less for lower primary, which is what you see more of in private so it's just a matter of trying, that's all. No, nothing is guaranteed but if a parent has the means, he or she may want to try to give that smaller environmt to his or her child. There are many more differences. For example, in Fulton, the entire district cut almost all, if not all, of the music program at the elementary level about 4 or 5 years ago. Some parents want their children to have an opportunity to have music or art everyday and so it has been extremely disappointing what happened in Fulton. I'm not sure if visual arts made the cut or if it is largely gone to. Talking at the elementary school level here for music and art. These are just a couple of reasons, in response to your question and you are absolutely right that a child can be successful with a public education. I don't think anyone would dispute that. Start talking to some public school teachers about what they'd di with their children if they could and start asking why.

Originally Posted by Larry X

Private school don't ganrauntee nothing but money out your pocket. Its up to parents to get their kids through high school and prepare them for college, not the school. Most people just wanna be able to say their kids go to private school. Kids in public schools fair just as well in college and in life, so I don't get the point of going to private school unless you're rich or famous.

[Zanarkand A East]

If you want to raise a scholar-athlete, Marist all the way. Quality that's worth the price.