Holly smokes… I just realized that I’m not done with my budget! After feeling much better about my net worth yesterday, I had this unexpected conversation with my wife. This is when I realized that my oldest son is 7… yeah I knew that already, but this also means that in five years, he’s hitting high school.
And high school means one thing for me: it means private school! The conversation I had with my wife was around the price of private schools in our area. We are pretty lucky since we have three options:
– International school (pretty much same cost as public school but you need great grades to be accepted)
– $3,500/year private school &
– $5,000/year private school
This is when I realized that I didn’t have a penny saved for that. Kudos to me, my kids will have 30K each to finance their university. But what happens before that!?!? Darn! And I can’t use theRESPfor high school… this is when I start thinking that I need a funding strategy…and fast! Because “goods news” like this doesn’t come alone, I also realized that I had a few other expenses to take care of in the upcoming years…
As I just mentioned, this is definitely the biggest expense I’ll have to plan for this in the near future. The cheapest option is the international school but I don’t know if my children will want this or be qualified to go there. So I’ll have to budget for the second best option; the $3,500/year school. I’m not going to actually go see both private schools right now since management can change a lot in the next five years and I’ll decide at that time which school is best for my kids. In the meantime, I need to find money! Here’s what I need:
3 kids x 5 years at private schools x $3,500 = $52,500!
Fortunately, I need that over a period of the next 15 years :-D. But my main problem is exactly in 7 years when both my oldest son and my daughter will be at private school. At best, I’ll need 7K per year. At worst, it will be 12K! But let’s keep the 3,5K option for now. Just to keep a smile on my face for a few more years!
I’ve calculated that if I start now to invest $200 per month, I’ll have roughly $13,000 in five years. If I keep the same budget of $200 per month, this makes $2,400 available for private school. If the cost is $3,500, this means that I only have to withdraw $1,100 per year from my school fund. This will last for 2 years and then, I’ll have to withdraw $4,600 ($7,000 for two kids – $2,400 that is already budgeted). According to these calculations, when my oldest son will finish private school, my school fund should be at $0 and I might have to dip into my pocket for the last year. Then, I only have one kid remaining in private school. When my daughter will finish, we will have a 1 year break before my youngest starts.
So technically, I would need to start this $200/month fund ASAP if I don’t want to be in the deep in five years! Hmmm… this smells like a 2013 goal!
Are you willing to make such a sacrifice for your children? Do you plan on private school? I’m curious to know what you think about that.
No… I don’t expect to buy a new car shortly. In fact, I hope not to have to buy one in the next 5 years. At that time, my Tribute loan will be paid off and I could sell my RX-8 and get another car loan. It sucks but I don’t think that my old sports car will be in good shape after 200,000+ km and 11 years under its hood. The goal is to have only one car payment at the time. In 3 years, my Tribute will be 6 years old and should have about 100,000 km. That means it will be good for another 5 years… just enough time for me to finish paying off my second car. Ugh… I really don’t like where this is going.
Is there any way I can save on car payments or am I stuck with this stupid logic of always having a car payment in my budget??? I need your help for this one!
Starting next year, I’ll have to repaint a few areas of my house. The house was built in 2005 and nothing has been done inside since then. It definitely needs to be refreshed. Then, I have another problem; I only have 3 bedrooms on the second floor but I have 3 kids. My toddler will eventually share a bedroom with my daughter but it’s not optimal (due to the fact that they are a boy and a girl and there is a 3 ½ year difference!).
I’m not quite sure where I’ll be heading with these expenses as well… it kinda sucks actually! I think I’m going to delay the renovations in my basement for a year or two in order to put a few bucks aside and not have to remortgage my house to renovate and create more bedrooms. Now I get why people are constantly refinancing their mortgage to meet their needs. This sounds like a great budgeting challenge to be able to afford any lifestyle changes in your house with your own pay check.
Fortunately, I’m expecting to grow my income significantly in the next five years. This is still my best bet to cover all my expenses…
How do you do it? Am I missing something here??
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