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Do You Worry About Paying for High School or College?
Every year at this time our neighbourhood is filled with lawn signs congratulating students for graduating from elementary, middle, or high school. For graduates, it’s an emotional time of year, particularly for teenagers who leave schools where they were accustomed to routines and embark on a new stage in their life - whether that be high school, college, or perhaps a different path altogether. For our family, we are celebrating our oldest daughter’s graduation from 8th grade. For those graduates considering private high school, it can be challenging for faxxfxmilies to pay for high school and then college.
In today’s educational world, there are more high school options than ever with choices such as performing arts schools, private schools, and the local public high school. Most parents begin conversations with their children as early as 6th or 7th grade about the different types of schools, costs, size, distance away from home, and whether any aid/scholarships are available.
Our search process was no different than other families. Similar to many long-term goals, our process began with saving enough money to provide us with options should our daughter decide on a private school. We opened a brokerage account, funded it with cash and purchased a Certificate of Deposit (CD) that would mature and coincide with the payment of her first tuition payment. We then followed suit and made similar investments to fund her future tuition payments. This type of strategy is called asset/liability matching. We purchased an asset (CD) that would fund a liability (tuition). This investment strategy, coupled with designating a specific “bucket” or investment account for the goal, contributed to our successful saving story. Another alternative way to fund private K-12 school, is a 529 Plan. This law went into effect in 2018 and allows parents to withdraw up to $10,000/year to fund for private K-12 schools.
Whether you are saving for private high school or another goal, it’s important to start early, be patient and consistent. Please reach out to us if you have any questions about saving for your goals.