Our public school district is in serious dire straits, so I’ve been thinking about life five years from now. While I feel reasonably confident our current elementary school will be okay, in five years, our oldest will be heading into sixth grade and off to a middle school. The problem is that I’m finding it difficult to find a really desirable public middle school. I’ve had my eye on the Sherman Oaks Center for Enriched Studies, which has a great academic reputation and goes from fourth through twelfth grade, but it’s incredibly difficult to get into. Even if I did everything possible to maximize priority magnet points, our odds of getting in will still be slim because of the lottery system.
So we would really like to have private school on the table as an option in five years. But that will require money, and a lot of it.
At the beginning of the year, I said that I wouldn’t have any financial resolutions for this year and that I just wanted to get used to living on one income. But we seem to have done that, and I couldn’t help taking a closer look at our mortgage, which is our only remaining debt.
Ever since we became otherwise debt-free in 2009, I’ve toyed with the idea of paying off the mortgage. We pay a little extra every month, but only enough to accelerate the payoff by a couple of years. But. We could pay off the mortgage in five years if we save aggressively.
Unfortunately, it’s hard to predict the future. Is it better to pay off the mortgage and free up the mortgage payment in our cash flow in five years? Or would we be better off saving the money and having a huge cash cushion that we can use to pay for tuition?
I don’t think there’s a right answer, at least not at the moment when there are so many unknowns, like how much tuition would be. My projected calculations show that if tuition at the top schools continues to rise at the same rate it has been, it’s going to be in the neighborhood of $40,000 per year at the most expensive schools. I’m not sure we would opt for a school like that, even assuming we got in, because it’s so expensive. But even a moderately priced school is going to be around $20,000 per year, and we’ll have to pay twice that for two kids for five years (and then there’s college).
So for now, we’re going to play it safe. It’ll be like last year, when we were aggressively saving so I could quit my job, only we’ll be saving for five years instead of one now. I’ve got a spreadsheet set up to track our progress, just as I did last year. And just like last year, we’ll have to be diligent about doing all of the things I recommend in the Ways to Make & Save Money series. My goal last year was ambitious but we did it – hopefully, we can do it again!