If you have school age children, investing in your children’s education is one of the wisest investments you can make. There is no greater investment for your children’s future than education. However, education is also one of the most expensive decisions you can make. There are seven reasons why physicians spend tens of thousands of dollars a year to send their children to private schools despite the high costs.
In today’s world of increasing college education costs, is the cost of private school for your children worth the investment? Like most financial decisions, the answer is, it depends. Let’s look at two young physician families with three children at home.
Our first family is the Tutelage family. The Tutelage family is a few years out of residency. They recently purchased a house and are still paying down their medical school debt, now about $150,000 combined. They have three school-aged children, ages nine, seven and five. Mrs. Tutelage went to a private religious school and would like the same experience for their children. The Tutelage family firmly believes in investing in a good education and make many sacrifices to send their children to the best private school in the city. Luckily they don’t live in New York City and the private school in town is a bargain at around $20,000 per year per child.
Despite private education for their children costing over $60,000 per year, the Tutelage family continues to prioritize their children’s education over other luxuries. With a combined income of $320,000, The $5,000 / month they have to save just for school is a considerable outlay, almost 30% of their take-home earnings each month.
Can a school really be worth 30% of your take-home income each month? For the majority of Americans, the choice of public vs. private doesn’t even enter the equation because they cannot afford the tuition. The question for us today is, are physicians in that group?