Cash Flow Private Schools

Mac in Dallas is in Baby Step 2, and he wants to know at what point private school tuition comes into play. He wants to send his kids to a private Christian school.

QUESTION: Mac in Dallas is in Baby Step 2, and he wants to know at what point private school tuition comes into play. He wants to send his kids to a private Christian school. Dave says it should happen when you can cash flow it in your budget, and it should be a reasonable ratio to Mac’s income.

ANSWER: You need to be able to cash flow them in your budget. That means that it needs to be a reasonable ratio to your income. I just think that if it shocks you percentage-wise when you look at it, then you need to think about it. I’ve talked to single moms making $30,000 who want to spend $12,000 a year on tuition. Obviously, that’s what’s known as ludicrous. You teach the Bible at home and put your kid in a school. On the other hand, if you’re making $100,000 and you spend $12,000, it starts to be pretty reasonable, doesn’t it?

You’re talking about 25% of your income going to this. And it’s really hard to cost justify that in terms of their future success versus what you’ve spent. There’s just no correlation. Yes, I’m with you on the value system issue if you want them in a Christ-centered situation. You’ve got to think it through. There are lots of different levels of expense in Christian school and lots of different levels of academia—quality of academics, in other words.

You’re spending as much as college for a third grader. You can go to the University of Texas for what you’re spending. That’s what you’ve got to think about from a cost-benefit analysis. That one stings me a little. It’s not a deal breaker if it’s something you guys pray about. It’s your money if you want to do it. That’s fine. But it’s about all you can do. You don’t really want to go any more than that.

I have lots of friends that do this stuff. They spend unbelievable dollars on schools. The weird thing is they spend all of that and then send them to a state college. I never understood that part. It’s totally inconsistent. We go through all of this Christian-based education and then dump them in a state school. What’s the point? I guess they’re ready then maybe. I don’t know.

I’m okay either way. As long as your family is not being damaged and you’re not giving up the future of X, Y, and Z, so to speak, all in the name of this one instance. What you’ve got to be careful of is that you don’t obsess over the academics or the value system thing to the point that the money becomes unreasonable. People kind of lose their minds on this issue as much as anything I run into.