While college tuition is a common financial planning line item amongst my clients, I also find myself having more and more conversations about private elementary and secondary education. Tune in this week as Matt Robison and I discuss what goes into choosing a private school vs public education. Spoiler alert: it’s not just a budget analysis!
Public vs. Private
- Location: Where you live is likely a deciding factor when choosing whether public or private schools are the right choice for your family
- Location: How far are you willing to drive?
- Location: How will your choice affect the relationships you’ve built in your community?
- Where will the tuition money come from?
- Should you use a 529 for early education?
Maybe your child needs more than the public school has to offer in the form of greater challenges or additional resources. Perhaps social and emotional factors weigh in on your decision to choose private over public schools. There are so many factors to consider and Matt and I understand that first-hand. Listen Up to hear more.
Welcome to real financial planning broadcast on WKXL available wherever you get your podcasts. I'm Matt Robison joined by Mike Morton, the host of the recently redubbed financial life planning podcast, Mike, branding awareness seminar 101. Should we rename this segment on radio to align with your podcast?Mike:
Oh, since marketing is pretty much at the bottom of my resume in all respects, I have no idea how to answer that question.Matt:
Yeah. Reminds me of say anything. I don't want to market anything that's bought or manufactured. I don't want to manufacture anything. That's anyway, I don't like marketing, either. All right.Mike:
I love marketing. I'm just terrible at it. I've had to try to learn over the years and still terrible. So anybody that's got some good tips on anything you see, myself or Matt doing in terms of social media, branding, and marketing, please send them my way.Matt:
Yeah or do it yourself. But you know what, if you liked this show, and you want to market it, why don't you subscribe, and maybe throw us a poem? Because we're not good at this. We're good at other things. This isn't one of them. All right, Mike, we got kind of a, it's a topic that I think people will relate to. But it's also personal for me and for both of us. So we recently did a show on how to teach your kids about finance. And now, you know, we're going to do another episode here that relates to parents and parents of kids who are in K through 12. Disclaimer, look, we want everyone to listen to all of our shows. But if you've reached this point, and this doesn't apply to you, maybe now's a good time to take the dog for a walk.Mike:
They’re already on a walk. They're like, Oh, no, I didn’t download anything else. This is it.Matt:
What else am I gonna listen to? Well, I do the dishes. So the answer is, first of all, have your kids do the dishes. Second of all, how to make the decision about public versus private school. Mike, what do you have in mind? You're the one who teed this up?Mike:
Yeah, it's a question. Of course, we get a lot around. First of all, the college planning kids growing up like, hey, do I save for college, how to save or smart ways of saving for college thinking about education costs? We've talked about that in the past. I'm sure we'll bring it up again in the future. And then this one came up too, which is, hey, what about K through 12? Not the college costs. What about kindergarten through 12th grade public versus private school? And if I'm considering private school, how do we go ahead and pay for that? What is smart ways of potentially paying for that and thinking about it in general? And so I thought this is a good question for the two of us to talk through the different ways of thinking about public versus private schools, and how to consider any smart strategies around saving, budgeting and paying for those expenses.Matt:
So I think it would make sense for us to tackle it in exactly the order that you just laid it out. Because first and foremost, per the name of your recently rechristened podcast. This is a life decision. It's a financial decision afterwards. Now, obviously, I can hear people screaming in the background, that's a financial decision, if you can afford it, right like that, that does come first and foremost. So let's agree that if you're fortunate enough to be in the position where there's even a decision you can make, it is first and foremost, a kind of a values and a lifestyle and a what's important to you life decision.Mike:
Yeah, yeah, that's exactly right. You know, I was surprised when looking at something that the number of schools that are out there, you know, catering and private schools that are out there over most 35,000 private schools, K through 12, across the country serving almost 6 million kids. So there's a lot of opportunity, a lot of thoughts, right, we all know, there's choices out there potential choices, depending on your situation, thinking about this. So it does come down to first of all what you said the values and also how your kids are doing schools, we both have had that experience. Kids are sometimes really enjoying their classes or classroom experience. And as parents, sometimes we're really enjoying oh my gosh, these teachers are great, the school systems really doing well. And then sometimes not so well. Jeez, my kids kind of struggling in this area, or the environment, or the teachers or the classroom or whatever it is struggling, maybe there's some other environments where they would thrive and do better. So I think that's always the first thing to consider, of course, is what's going to be best for your child. But also to those out there that it's in the context of your family, right? Of course, there's choices for your child, geez, is Arabic gonna be better here? I'll let you know in 35 years, you know. But you have to also put it in the context of your family environment. Jeez, what if the school that we think is really good for my child is an hour drive away each way? Maybe that's totally fine. You know, no problem. We can do that. But maybe it's easy. That's going to really stress out these other situations in our family, and then the stress, the everyday stress is not so good. It's not a positive. And so you always have to think about all of those trade offs. Are you ready to create your ideal lifestyle? Let's discover what's most important to you and design a plan to have more of that in your life. Go to meet Mike morton.com. All one word, meet Mike morton.com.Matt:
Here's where I'm going to personalize this a little bit. And I'm going to just disclaimer upfront, I'm going to share a little bit personally but also try to keep this a little bit elliptical because obviously I, first of all, my own personal life doesn't apply to everyone. So I'm sharing this by way of trying to at least give an illustration of how my wife and I try to approach this very much kind of aligned with the way you think about solving problems. So we recently faced this decision, we felt that for a number of reasons, the school environment in the public school that our three elementary school aged kids were in was not the best thing for them anymore. This was emotional. We live in the town where my wife grew up. Our kids attended the elementary school that my wife attended. And so this was like stabbing. This was like the Red Wedding. It was like we were stabbing a pregnant lady, it was terrible. It was really wrenching and we decided and I'm not just sugarcoating this, because we genuinely have friends and relationships at the existing school. We genuinely value a lot of what they were getting. It's not that we thought that the public schools were failing, per se. What it really all came down to was trying to ask ourselves the question, and I've quipped about this on the show before, what problem are we trying to solve here? I think that's the number one question that you can ask yourself, as you're going into a decision like this, it's so hard to think about it in terms of maybe the academic quality is better at the school or more, maybe the social environment is better, or gosh, it just seems like they get a lot of people at a college. So maybe that's good, because there are too many factors to make a rational choice. If you try and factor them all in. Did you know that there are 10,500 school districts in America, there is no unified approach to elementary school education in America. And there are so many different things going on, you could make a list of all of the factors that go into what isn't a school, and you could run pages and pages. And it just gets confusing, and it undermines your ability to make a choice. So we started with a question of for each of our kids individually, and then to some extent, collectively, what problem are we trying to solve for with each of them? And that's how we approached it. And long story short, we did end up making the change.Mike:
Yeah. Yeah, I love the way that you frame that. What are you trying to solve for? Because also in finance, right and we could I could give you a million examples. Yeah, you could do A, B or C, which is better? Again, I'll tell you in 5 or 10 or 20 years, which would have been better, but what are you trying to solve for? So especially think about it in your family, dynamic for your kids, the rest of your family, the parents, what are you trying to solve for? And what's your expectations? And then how do you measure success is great to think about as well, right? Coming out during the process or coming out one year, two year, five years? How are you measuring that success? So yeah, I appreciate you sharing that thought process.Matt:
Yeah, it's the measuring is awfully hard. But we did try to approach this. And this is the way I solve problems a lot in my life, maybe it's not a good way. Maybe this is one where viewers and listeners can weigh in and say, Matt, you're terrible at this, let me solve this problem for you. But I do try to simplify, because I find too many dynamics going on at once obscures my ability to make rational decisions. And so I try and treat it like a scientist, where you control for all the other variables, and you try and limit it to one, maybe two or three scientists would be one. So in this case, what we did was try to measure it academically. Are there gaps that were appearing for our kids? Would a new school environment help close those gaps? And the problem we're trying to solve for is will they learn at a pace that is appropriate for them? That is best for their overall education and that best prepares them for their future? And how do we evaluate that, but there are luckily standardized tests that are statewide in this and so will that'll be a wait and see. But there's also just our sense of being involved with the kids academics and seeing what they're working on. Is it wider in scope? Are they hitting the topics that they should across different subject matters? So that was the number one thing and then look there are other values that can come to bear when you're talking about you know, so for example, and then I'll stop belaboring our own situation, but there are some other things that you get out of school, there's a social experience. One thing that the public school does really well around us is it's incredibly socio-economically culturally and racially diverse. It is diverse in a different way. But I would say overall, less so at the new school, that's something that we really had to factor in, if they are going to make that change. How do we maintain that kind of diversity in their lives? That was something we talked about and thought about a lot, I'd say those were two of the biggest ones. And then, you know, the final thing was just their comfort level and sense of place. It's a big part of your overall personal development, your personality development, your peer group who you're around, do you feel that you're forming bonds with friends that, you know, get you and that's a huge part of going to school. So again, hard to measure objectively hard to evaluate.Mike:
But another factor then, let me throw out this because I love the way that you were thinking about that measurements for you and your family and kind of what was making sense for your kids. Let me give you another example. A personal example as well, one of my children also goes to different school, we had that choice, do we use the public school or some different school and our rationale, what we were looking for was more of that social dynamic piece. My child's very academically great, is chugging along just fine. But she had been homeschooled for a few years. And so we're looking for how do we get her more relationships working in teams and groups and the social environment of a school? What's going to be the right situation for her? Is it our local public school or some other kind of school? And that's what we're really looking at continuing her development? And so how do we measure that? How is she fitting into those groups teams? Is she creating great friendships with new people she hasn't met before? And how are those relationships coming along to grow that side of her growth outside of the academics? And so there's another example, again, trying to do the best for your child, and their growth overall, and also the best for your family. Because you mentioned, hey, are the kids really getting along? And they bring that back same as us. Are we enjoying our work? I talk about that a lot of clients are like, hey, I'm trying to get out of this job, can I change jobs? How much money do I need to make? Because I'm not enjoying my team. And if I'm not enjoying the team, and my boss, and then what I'm working on, I'm bringing that home, and it's stressing out the entire family. And the same is true for kids as well.Matt:
Yeah, I'll throw just two other things into the mix. First of all, I want to very much ratify the idea of this is a broader thing. As much as I was just pleading with people to simplify, I do think that you can't just boil this down to this school is more highly rated, or it seems like it places more people into the Ivy League schools, or whatever it is, that's not everything. And look, I had an odd experience myself growing up, I went to a New York City public school in the 1980s. Let me tell you, that was some grim stuff, it was not great. But there were some huge trade offs, I got a scholarship and I got into one of the snowiest private schools in America in New York City. And there were trade offs academically, it was a lot better. But let me tell you, I learned a lot more about the reality of the world in the public school. And when I got to the private school, it was segregated by class and race. I took the subway to school because that's what I could afford not the bus. And we took it to the end of the line. And our school was literally at the top of a big hill. Every morning, the rich kids, which also equated to the white kids would go up the hill in their Lexus's and beamers. And me and the other kids who took the subway who were predominantly black, would trudge up the hill. And I learned a lot about the way the world works that way. But these kinds of things, they matter. I think that really affected my development as a person. And so just very much cosign your idea that thinking about those kinds of dynamics really matters. And I also would not tell anyone to sleep on the logistics issue for your family and for the parents who brought up before but the schools an hour away, our new one isn't an hour away, but it's a half hour away, so an hour a day. Most days, I'm in the car, we thought a lot about like we want to keep our kids together in the same place. That bond is really important to them. So anyway, I don't want to go overboard with all of this. But those are the factors that went in for me. And I think all the things you raise are really important.Mike:
Yeah, for sure. All right. Well, look…Matt:
Let's see, can I suggest why don't we turn to the financial part of this because we buried that at the top you are after all a financial advisor. So what we said at the top was, let's assume for a second that this is even a financial choice for you. So now you've made the decision on a values based says that this is something you want to do. And now you're circling back to okay, but can we afford this? This was no easy question for us, either. You might actually look at our finances and say, oh my gosh, Matt, what the heck have you done? You're a moron. Oh, my God.Mike:
Get those kids out of there. You can't go to that school?Matt:
Oh, I can't believe you do. You've done this show with me for a couple years. Like if I were your client, you would fire me. Okay, how do you think about the financial size? What do you do?Mike:
Yeah, so obviously, there's a lot to weigh there. And we want to be smart about what we're doing. So one thing is, there's just going to be trade offs. If you have to pay more for a school or a situation, then you're gonna have to bring get that money from somewhere and pay it back somehow. So it means working a little bit harder, working a little bit longer taking a different kind of job. Those are just sort of obvious statements. But you really have to just wrestle with those and understand, okay, yeah, I'm willing to make that choice for me. And for my family, those trade offs, you know, nuts and bolts, there are loans you can get to help pay for these things. There's education loans, there's personal loans. So definitely make sure that you take a look at what is out there, and what's available, and weigh those trade offs of taking out a loan or doing it some other way. And then a question I get all the time that definitely want to bring up as the five to nines, because people have heard about that. And I do get this question like, should I use the 529 for K-12? Expenses? Or is it just for college expenses, or how to think about that. So remember that a 529 is a special account where you get tax benefits, for using it for education purposes, okay. But really, the tax benefits is the growth, alright, you get tax free growth. So any money you put into the five to nine, if you allow it to grow and expand, you invest it, and hopefully that you know, that does better in the future than that is tax free the growth, there's not necessarily a lot of benefits for just paying through K through 12, if you're not going to leave the money in there for a while and allow it to grow. Alright, so if you're sending your kids right now and you're like, should I use a five to nine? The answer is almost basically no. Because if you're not allowing it to grow, there's no real tax benefits. However, if you're in a state where you can get state tax deductions for five to nine contributions, then you can run your money through the five to nine, and get a little bit of tax savings. So in other words, here in the state of Massachusetts, we do get a tax break, it's a couple 100 bucks, potentially. So you could spend $10,000, through a 529 per kid. So you could put the money in the five to nine, let it sit there for a week, take it out and pay your school, and then take that off your taxes and maybe save a couple 100 bucks. And I can do that similar thing.Matt:
And I just scroll back in the podcast feed because we did a whole deep dive on 529’s and Mike, you went through all of these finer points, especially the decision about which state plan to use if you're going to have a five to nine, and what the differing tax benefits might be and whether there's any advantage to running your current expenses through those accounts. So I just commend that episode to people who are thinking about this. And obviously, they can always contact you for more information on that. What are we talking about? Ballpark wise, I know what I'm talking about, I'm not going to share that on the air. But what I'm talking about in terms of costs. And when you're talking to your clients, you know, how big a factor is that level of cost for a private elementary school?Mike:
Yeah, of course, this is one, it could just run the total gamut, right? Some schools you can get in a charter schools, other schools that cost you nothing, or maybe your district will pay to go to a certain school, right, maybe you have some special needs, or some other system where your school district will pay to go to some other school outside of the district. So that's great. Again, you want this to come down to a lot of personal, you've got to really look through the opportunities. I mentioned, education loans earlier, you got to look through those look at your school district, look at what's available to you, for you and your family and your child. When it comes to actual out of pocket costs. It could be anywhere from zero to 10s and 10s of 1000s of dollars per child. And so there is no there's nothing I can say on the air. It's like oh, it's about this amount, um, really could be all over the place. And then of course, just like colleges, they offer scholarships and deductions and all kinds of stuff so that the you know, even the sticker price, might not be what they end up charging you to go to the school. All that being said that at the end of the day, it's fairly a budgeting exercise. Hey, here's how much income we have. I like to spend this amount on on on my housing and my groceries and dining out. And I'd like to spend this amount on vacations, and I've got car loans. Oh yeah, and I've got private school. So you have this bucket of income, and you've got a bucket of expenses, and we got to make the ends meet because you also want to save for the future because maybe you don't want to work until the day you die and so you won't have some money available for spending later. So at the end, you've just got to budget, everything. So if you're making the decision, we're currently in public school not paying anything. And now I'm considering private school that obviously could really add to the expense side of the ledger, you've got to figure out where that money is going to come from now, or in the future.Matt:
And in terms of the value proposition, does that also factor in because for some people you're taking as part of that budgeting, exercise and implicit trade off, you're going to spend on education, you've actually made this point before in our five to nine episode, you're going to spend that money, you're either going to spend it now or later. And to some degree, your money's not infinite, you may be making a trade off between it could have more to spend later for college, or I could invest it a little bit more upfront. Now in an elementary school experience, or a high school experience that I think is higher quality or a better fit for my child, do you get into that with your clients? Is that a trade off that people have to make?Mike:
Yeah, no, I would say not usually I get into with my clients and those kinds of particulars, but usually people already have in their mind their values. That's why I don't have the discussion. Usually, it's the money side of things, the inputs and outputs, the income and expenses, and how are we going to do this and making smart decisions about that? Or what the trade offs are, they come to me and say, Mike, I really want to do this. But like, what does that mean? Does that mean I have to work forever? That's everybody's first question. Does this mean, I can never retire? What is it? What is it going to mean for me, but usually, people have the values, and quite honestly met. And I probably mentioned this in the five to nine, a lot of times, it just comes down to what you can afford, you know, and it's like people know that already. We talked about this in our last episode with the kids, do you think you're hiding anything like they don't know, they pretty much know a lot of stuff already.Matt:
Or watching it and soaking it all in the one decision that people can make just a lightning round thing at the end here is you could strategically decide to live someplace where you're really happy with elementary schools do you know people who do well…Mike:
That's one thing I wanted to bring up in this episode, Matt, if you're young parent tuning in, you already know this, but really paying attention to where you're living and the school districts, I found this out Matt once we were having kids. And it was like, oh, we have to like just look at the school districts you got to like suddenly tune into a whole other world that I had never paid attention to. So that's, you know, a lot of house prices. And we could go on and on. But basically, be aware that you do want to look at the school districts if education is a value that you have, and you really want to support your kids. And to that end, Matt, you know, the trade offs of income and expenses. If it's a value, you have to provide great support and education for your kids, then you're going to spend your money there and not in other areas. And that's perfectly fine. Whatever makes sense for you. And however you want to use your resources.Matt:
That's a great theme to end on here. Because it really is an individual choice about what's best for your kids in your family. No right or wrong answers there. But hopefully this has been helpful for people navigating this incredibly difficult choice. All right, Mike Morton.Mike:
Thanks. So thanks. Thanks for joining us on financial planning for entrepreneurs. If you liked what you heard, please subscribe to and rate the podcast on Apple, iTunes, Google Play Spotify, or wherever you get your podcasts. You can connect with me at LinkedIn for Morton financial advice.com. I'd love to get your feedback. If you have a comment or question, please email me at financial planning . Until next time, thanks for tuning in. This recording is for informational purposes only and should not be considered for investment advice or opinions expressed as our of the date of recording. Such opinions are subject to change. We do not guarantee the accuracy or completeness of the data presented here.