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  • Writer's pictureJohn J. Diak, CFP®

Investing in Your Child's Future: Exploring Your Options for Your Child’s K-12 Education


Investing in Your Child's Future: Exploring Your Options for Your Child’s K-12 Education

Every parent dreams of providing their child with an exceptional education, and although not all K-12 educational systems are equal, there are many excellent opportunities to explore. The question is, would you prefer your child attend public school, undertake the duty of homeschooling, or pay out-of-pocket for private or boarding school education?


Every option has unique costs, benefits, pitfalls, and opportunities, making it challenging for any parent trying to identify the most appropriate choice. Finding a path that fits your child's best interests, your family's goals, and your financial situation is invaluable. So it's up to you as a parent to do the research to make a confident, educated choice.


Here’s what you’ll want to consider.


Potential Hidden Costs of a Tuition-Free Public Education


Living in a high-ranking school district can be a dream for parents considering a public education for their children. However, the benefits of living in such a location frequently come with a significant financial commitment.


One of the primary factors contributing to the high cost of living in a good public school district is real estate. These sought-after areas often boast top schools, safe neighborhoods, and a desirable community. Consequently, demand for housing in these areas rises, driving up home prices. Families seeking a place in popular districts should anticipate higher down payments, mortgage payments, and property taxes. It's crucial to evaluate your budget and long-term financial plans before committing to purchasing a house in such a district.


Remember, higher taxes are used to fund local public schools, positioning them to have the necessary resources and facilities to deliver quality education. Property taxes vary depending on the location, so factor them into the overall cost of living in a high-ranking school district. Before making a decision, research and compare property tax rates in different districts to gauge the potential impact on your finances.


Even though public schools don't charge tuition, additional costs may include textbooks, school supplies, technology fees, extracurricular activities such as clubs and sports, field trips, and uniforms. It's necessary to plan your budget for these costs and consider them when calculating the financial commitment of living in a sought-after public school district.


Considerations for Independent Homeschooling


In recent years, many more families have turned to homeschooling as an alternate choice for their children’s education. While homeschooling offers many benefits, it's important to balance the pros and cons, including its financial implications, before embarking on this educational path.


A significant consideration in homeschooling is the cost of curriculum and related materials. Unlike traditional public or private schools, where textbooks and materials are usually provided, homeschooling parents are responsible for sourcing their own. The expense of purchasing books, workbooks, educational software, and other items can add up quickly, especially as students enter higher grade levels. Additionally, subjects like science may require lab equipment and supplies, adding to the total cost.


Access to research libraries and online databases is another factor homeschooling families should consider in their budget. While public libraries can be an excellent resource, some subjects may require access to more extensive research materials, which may involve subscription fees or membership costs.


In many cases, one parent takes on the primary responsibility for homeschooling, which may require reducing or eliminating their employment outside the home. This can pose financial challenges for families accustomed to being dual-income households.


Don’t forget to factor in the quality of education that can be delivered when considering homeschooling. Homeschooling requires a dedicated and capable teaching parent who can effectively deliver lessons and provide individualized instruction. Consider the parent’s teaching skills and ability to create a structured and engaging learning environment. You’ll also want to evaluate whether homeschooling aligns with your child's future career goals. Some college programs may require specific classes or experiences that may be more challenging to obtain through homeschooling alone.


Seek advice and insights from experienced homeschooling families who can provide valuable perspectives and guidance. They can offer their experiences, advice, and cost-cutting ideas to assist you in navigating the financial aspects of homeschooling.


Investing in a Private K-12 Education


Private schools have long been considered a desirable choice for parents seeking an alternative to public education. These institutions often offer advanced educational opportunities and smaller class sizes, fostering individual attention and academic excellence. But before committing to a private school, be sure to research the financial implications and weigh the benefits and drawbacks.


One of the primary factors to consider is the cost of tuition and fees. Since they do not rely on government funding, private schools operate on tuition payments, which means parents bear the full cost of their child's education. Fees can vary significantly depending on the school's reputation, location, and facilities.


In addition to tuition, private schools usually have additional expenses such as uniforms, textbooks, technology fees, extracurricular activities, and field trips. Costs quickly add up and should be factored into your overall budget. Inquire about all potential expenses when considering a private school to ensure you have a full picture of the financial commitment involved.


While private schools often offer a high-quality education, not all private schools are a good investment. Reputation alone should not be the sole basis for your decision. Take the time to research and evaluate the school's curriculum, teaching methods, academic achievements, and overall educational philosophy. Prioritize quality education over prestige, as the right school should provide a solid foundation for your child's future academic and personal success.


Researching various private school options and visiting campuses can provide valuable insights into each school's educational experience and atmosphere. Speak with current parents, teachers, and students to gain different perspectives and gather information about the school's strengths and weaknesses. Don't rely solely on promotional materials or enthusiastic alumni ambassadors; seek objective information to make an informed decision.


Financing Your Child's K-12 Education


Your child's K-12 education can be a sizable financial commitment. However, methods and solutions are available to help make it more manageable. When determining how to pay for your child's education, explore avenues that offer tax advantages, scholarships, or financial assistance, and avoid high-interest private loans.


A practical method for saving and paying for K-12 education is through 529 plans. These plans are not just for college savings; they can also be used to pay for K-12 private school tuition. One of the most notable perks of 529 plans is the tax advantages they provide. Contributions to these plans grow tax-free, and withdrawals for qualified educational expenses, including K-12 tuition, are also tax-free. Using a 529 plan can maximize your savings while reducing your tax burden.


Additionally, many private schools provide scholarships or financial assistance to help families mitigate the cost of tuition. Depending on the criteria set by the school, these programs can be need-based or merit-based. Always research and inquire about the scholarship and financial aid options available at the schools you're considering. It’s often possible to minimize the overall cost of your child's education and ease some financial stress by applying for these programs.


While exploring financing options, exercise caution when it comes to private loans. Private loans typically have high interest rates, which can dramatically raise the total cost invested. It's a good idea to look into other options for funding your child's education more sustainably rather than taking on debt that could strain your finances for years to come.


To provide your child with the best education possible, it's crucial to consider each option's costs, benefits, and financial implications. Whether you opt for a public school, homeschooling, or private K-12 education, understanding the financial commitment and aligning it with your family's goals is paramount. Remember to evaluate your ability to afford and prioritize your financial plans alongside the quality of education your child will receive. By conducting thorough research, seeking advice from professionals, such as Oatley & Diak, LLC, and exploring financial assistance options, you can make an informed decision that sets your child on the path to academic success while maintaining a sound financial footing for your family's future.


John J. Diak, CFP® is the Principal & Client Wealth Manager at Oatley & Diak, LLC in Parker, Colorado. He assists clients through many difficult lifestyle changes such as business downturns, retirement planning, divorce, the death of a spouse, and family estate issues among others. Oatley & Diak, LLC is a family-run registered investment advisory (RIA) firm that provides clients with investment management and financial planning services in a hands-on, intimate environment. Learn more about them at oatleydiak.com.


The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.


The article may contain references to specific 529 plans, investment options, or tax implications. However, it is important to note that the availability, terms, and conditions of 529 plans may vary by state, and tax laws are subject to change. Readers should review the official plan documents and consult with a tax advisor or state agency to understand the specific features, benefits, risks, and tax consequences associated with a particular 529 plan.


Investing in 529 plans involves risks, including the potential loss of principal. Past performance is not indicative of future results, and investment returns are not guaranteed. The article may discuss the benefits and potential advantages of 529 plans, but readers should be aware that any investment involves risk and should carefully consider their own investment objectives, risk tolerance, and time horizon before making any investment decisions.


This material was prepared by Crystal Marketing Solutions, LLC, and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate and is intended merely for educational purposes, not as advice.

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