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Ask MP: Save to Pay Off Debt or Use for Special School Tuition?

Q: My son has been diagnosed with learning disorders. A special school could help him -- but it costs $7,000 a year. That's about what we have budgeted for savings and chipping away at our debt. Should we do it?

 

A: Trying to calculate competing priorities is never easy, especially when they involve your child. Here are some things to weigh, though:

SECURITY You need enough savings to cover life's curveballs-especially a crisis, like a job loss or illness. Your son could get by without private school for a while, but you can't afford to jeopardize your family's stability. If you don't have at least three to six months of living expenses in the bank, school might have to wait a bit while you save.

RETIREMENT Given the immediate needs your son has, it may feel selfish to put your retirement first, but it's important. While you can choose to borrow for his schooling, that option won't be there when it comes to covering your future.

THE COST OF DEBT If you pay for your son's school, how much longer will that keep you in debt, and is it likely to increase if you're living close to the edge? Use a debt calculator at Bankrate.com to see how much more you'd end up paying by prolonging your indebtedness. It may be that spending the $7,000 now will end up costing you much more.

TAXES And now for the good news: Some states offer tax credits for private-school tuition, including special-needs schools, at the elementary and high school levels. And depending on your child's disability, you may be able to write off the school as a medical expense, or be eligible for tuition reimbursement from your school district. Last, don't completely discount public schools: Some have resources that go untapped. Even if your son's local school doesn't have a program to help him, they may be able to hire a teacher's aide or enroll him in a program at another location.

MP Dunleavey, our financial expert, is the author of Money Can Buy Happiness and mom of a 3-year-old. Send her questions at momsquad@parenting.com.

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