S/O Tuition, Savings, Buying a house

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Forum -> Household Management -> Finances

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amother

Wed, May 08 2024, 6:52 am

We are in this situation and I keep on wondering what the proper (mentchlich and Ehrlich) path is.

We don't have parents who are giving anything towards a down payment. We know that, always knew that so from the beginning, we carefully saved every extra penny.
By the time our first was in school, we had accumulated maybe 30k in savings. Not enough for a down payment at that time but good progress. We never were looking for big fancy houses or anything.

But then we started paying tuition. And everyone says not to ask for breaks if we have savings. And then things happened and we ended up taking from the savings for life.
If we couldn't afford tuition, we'd be told to dip into savings. People who got their down payment given and therefore bought, were house poor with no savings weren't told to sell their house to cover tuition.

And now, here we are. A dozen years later. Still haven't bought but by now our savings are so depleted that we can't. Rents are rising. We can't put away for savings because we're trying to survive.

Were we wrong? Was the schools wrong? Should we have bought a house we can't afford and therefore can't pay tuition?
I don't know any answers.
Id love to hear other's thoughts.

amother

Cornsilk

Wed, May 08 2024, 7:01 am

My children’s school takes all this into account when deciding on scholarship amounts. We tell them honestly what we have, and they are reasonable about determining how much we should pay.
I do not believe my children’s school would expect you to take anything from your 30k down payment fund to pay tuition.

amother

Wallflower

Wed, May 08 2024, 7:01 am

Married 10 years and in the same boat.
Neither my parents nor inlaws can give us a penny towards down payment.
I'm terrified of renting forever.
And no, I do not have high standards for a house. A small simple 3 bedroom house is perfectly fine. But even that is astronomical nowadays.
Definitely seems like homeowners get a lot more compassion from tuition committees

amother

Seashell

Wed, May 08 2024, 7:02 am

I didn't read through the whole other thread but personally I don't think that people should have to dip into savings that are already there to pay for tuition unless your savings are very high and what you'll be taking out won't be completely depleting it over the course of this child's years in school.

amother

Cherry

Wed, May 08 2024, 7:04 am

Married almost 14 years bh. We pay full tuition, don't own a home, parents not helping with a home. At least we're not in debt bh bh...

amother

Wed, May 08 2024, 7:05 am

amother Wallflower wrote:

I see this also.
Tuition committees tend to see homeowner and mortgages as absolute. It's very rare for a homeowner to be called out for their expensive mortgage, or to be told to downgrade.
It's very common as a renter to be told to downgrade to something smaller, cheaper, further away to make up the rest of my tuition.

amother

Silver

Wed, May 08 2024, 7:14 am

Just a word of advice, saving up for something specific is not the same thing as "having money in savings". Something to remember for the rest of your life. The money you were saving for a down payment is money that is "already spent" as it's earmarked for some other necessity. Spending it on tuition is like spending the money that's earmarked for food each week on tuition. It's no different except that you have to amass the down payment slowly so it sits in your bank for a little bit of time.

Again I'm talking about necessities not luxuries. If you were to tell me that your "savings" was earmarked for buying a private jet I would say that's money that should go to a necessity that's not currently being paid for - in this case tuition.

If you have two necessities that need to be paid for and you can negotiate price on one of them, of course you should negotiate the price! (The same way when you do iyH buy a house, you're going to negotiate price). Some prices are more negotiable than others. Food prices - non negotiable. Tuition - negotiable. Housing - somewhat negotiable. But one necessity should not take precedence over another.

My heart goes out to you. And I wish a you a lot of Hatzlacha in rebuilding your "savings" for the down payment.

(PS I'm not sure why you think homeowners come out ahead. I bought my house years ago when prices were cheap, also without any help from parents, and still have a mortgage that I struggle to pay each month. And most people I know are in the same boat).

amother

Gold

Wed, May 08 2024, 7:15 am

We looked at it as a down payment, not as savings. Currently house poor and in debt from medical and other stuff and bought before things were as astronomical but if defined as savings rather than down payment-it definitely was questioned. I hope for your sake-something pops up or rates finally go down…

amother

Wed, May 08 2024, 7:19 am

amother Silver wrote:

Just a word of advice, saving up for something specific is not the same thing as "having money in savings". Something to remember for the rest of your life. The money you were saving for a down payment is money that is "already spent" as it's earmarked for some other necessity. Spending it on tuition is like spending the money that's earmarked for food each week on tuition. It's no different except that you have to amass the down payment slowly so it sits in your bank for a little bit of time.

Again I'm talking about necessities not luxuries. If you were to tell me that your "savings" was earmarked for buying a private jet I would say that's money that should go to a necessity that's not currently being paid for - in this case tuition.

If you have two necessities that need to be paid for and you can negotiate price on one of them, of course you should negotiate the price! (The same way when you do iyH buy a house, you're going to negotiate price). Some prices are more negotiable than others. Good prices - non negotiable. Tuition - negotiable. Housing - somewhat negotiable. But one necessity should not take precedence over another.

My heart goes out to you. And I wish a you a lot of Hatzlacha in rebuilding your "savings" for the down payment.

(PS I'm not sure why you think homeowners come out ahead. I bought my house years ago when prices were cheap, also without any help from parents, and still have a mortgage that I struggle to pay each month. And most people I know are in the same boat).

You come out ahead because you own your house even if you struggle with the mortgage. I struggle with the rent.

And how many times were you told to rent out your house, move to a 2 bedroom apartment with 6 kids to pay full tuition?
Because I was told to downgrade to a smaller cheaper rental to cover full tuition.

And the school didn't care that my 30k was earmarked for a down payment. If it existed, no tuition breaks.

amother

Silver

Wed, May 08 2024, 7:22 am

Suggesting you move to a smaller house isn't any more reasonable than asking you to switch to a school that's willing to work with you. I would have chosen the latter.

amother

Silver

Wed, May 08 2024, 7:31 am

Just one more suggestion that might be helpful, everyone should ask their LOR but our rav holds that if you don't have money for tuition, you can use maaser money because it's going to support Torah. Again, check with your own rav, but that's what we were told when we couldn't come up with tuition.

amother

Slateblue

Wed, May 08 2024, 7:40 am

amother Seashell wrote:

But then what is considered high?
We have savings of 200k.
By scrimping and saving and living wayyy below our means. Some years saving 60% of our income, and we have been saving for close to a decade)
We live in Brooklyn where this will get us less than 20% on a million dollar house (if you account for closing costs etc) plus a huge mortgage, so we're still saving...
So should a school touch it because we need more?
We're just trying to get our of our dingy apt, which is why we haven't had proper living conditions till now - if they'll take it I may as well live in a normal rental for 3k+/ month, which I can technically afford on paper and isn't at all outrageous in Brooklyn.

(Obviously in talking about Brooklyn schools view, so moving out of town isn't the answer)

amother

Amaranthus

Wed, May 08 2024, 7:49 am

I work in a school accounting dept and we actually don't want to go after house savings, we WANT families to buy. If a family buys, it's basically a guarantee that they're staying in the long term. And assuming they're happy with our school, it means the younger siblings behind the current 1st grader. So if a family comes before the tuition committee, they're renting, they're trying to save for a house, we won't ask them to touch that, that would be incredibly short sighted. Better to let them have that break for 2 or 3 years and then they get the stability of homeownership and setting down roots, and now we have a family that will be with us for 20 something years who do pay in full. I know not all schools think this way, but we do and bh it has paid off most of the time.

amother

Daphne

Wed, May 08 2024, 8:52 am

My son's school just sent a letter about tuition breaks. They said they get people need to buy houses and cars, but there is a difference between buying a need and luxury. If they see people making big luxury additions (they get people need to make additions to accommodate large families in a small houses) or buying in the fancier parts of town or buying fancy cars, they may deny tuition breaks.

Hashem_Yaazor

Wed, May 08 2024, 2:05 pm

amother OP wrote:

I've sent to several schools that use a third party assessment company that does put into the algorithm what is fair amount for a specific expense and the rest is labeled as discretionary and doesn't get counted the same way as a valid expense.

amother

NeonOrange

Wed, May 08 2024, 2:36 pm

We bought a house we couldn’t really afford (nothing huge- just 3 bedrooms) because we knew if we didn’t do it before our kids started school, we never would- and the community we live in doesn’t have anything for rent except 1 and 2 bedroom apts.

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