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Making big purchases with savings before tuition starts
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justforfun87




 
 
    
 

Post Tue, Nov 10 2015, 1:13 am
I hear the sentiment shared a lot and am curious of your thoughts. Personally for us we bought a house recently with the intention that it would be too much financially once we had tuition to pay for. Do you think it is wrong to make big purchases like a new car a year or two before you are expected to start paying tuition for multiple kids? I feel bad that there is that mentality but truth is if there are any savings, I have heard they will be all wiped clean. People being told to wipe out their retirement accounts. If you forsee that you may need to replace two cars in the coming year would you be more inclined to buy newer cars now rather than later.
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May




 
 
    
 

Post Tue, Nov 10 2015, 1:20 am
I don't know - by us if there are savings they take into account whether or not you own a home. If you don't own yet they fagin you your savings a lot quicker. They also don't like it if you own several fancy cars or the like and then cry poverty for a scholarship, so it goes both ways.
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amother
Ruby


 

Post Tue, Nov 10 2015, 7:08 am
Certainly when it comes to house, it's a good idea and actually helpful to the school. Owning a home (assuming it's one you can afford, not that you threw everything into something huge and ridiculous) provides a lot of financial security. That security will allow you to keep up with your payments better than if you didn't own and had continually rising rent, moving costs from time to time etc. We are also doing the same- using our savings to buy now, even something not entirely ideal, so that savings won't end up getting drained on tuition.
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amother
Ruby


 

Post Tue, Nov 10 2015, 7:09 am
Certainly when it comes to house, it's a good idea and actually helpful to the school. Owning a home (assuming it's one you can afford, not that you threw everything into something huge and ridiculous) provides a lot of financial security. That security will allow you to keep up with your payments better than if you didn't own and had continually rising rent, moving costs from time to time etc. We are also doing the same- using our savings to buy now, even something not entirely ideal, so that savings won't end up getting drained on tuition.
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33055




 
 
    
 

Post Tue, Nov 10 2015, 8:16 am
Those who own big houses and have high mortgage payments pay less tuition than those that don't all other things being equal at the school I send to. This leads parents who are aware of the system to purchase as large a house as they can using up their disposable income. The school is not as kind to those that have fancy cars and fancy vacations.

It makes sense from the parents' point of view because the house goes up in value while cars are a depreciating asset. The family may not get back the higher mortgage payments (because of interest) but in a sense the school is subsidizing those payments.
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elisheva25




 
 
    
 

Post Tue, Nov 10 2015, 9:50 am
I think it's a very smart idea, especially if you mean buying a house !!!
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The Happy Wife




 
 
    
 

Post Tue, Nov 10 2015, 11:04 am
I think it's kind of disgusting to deliberately spend your savings and make yourselves deliberately unable to afford tuition.
Should you not buy a house because you made need the down payment money for tuition later? Well, I think buying a house (in some place where housing is not outrageous) is reasonable. But buying the biggest most expensive house you can to avoid paying tuition is kind of icky.
And buying a car is not a good investment. If you're talking about taking 20-30k out of savings and buying a brand new car to lock up your money I think it's pretty rotten.
I think people should try to make prudent financial choices and then try their best to pay tuition.
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mha3484




 
 
    
 

Post Tue, Nov 10 2015, 11:17 am
I have a slightly different but similar attitude to happy wife. I have nothing against someone buying a home with their savings but I get a bit rankled when people lock themselves into a large mortgage and than go to the school and say ooops I need a break.

Where I live there is a mix of condos, town houses, houses and mansions. I think a lot of people feel that they are entitled to a house but maybe a condo or townhouse is all they can afford on their salary and with the tuition they need to pay. But no I have to have a house with all that comes with it is the attitude I see so often.

To get a tad personal, I have a small amount of money invested that can be used as a down payment but if I buy a house my current housing budget will go up as well as other related bills like utilities and that cuts into tuition. I would feel really bad going to my kids school and saying oops please give me scholarship because we are low income but want to live like my neighbor who earns twice as much as me. We have looked extensively into buying what is called a two flat here for the income as well. If we buy it will be a condo or townhouse because I cant get behind buying something above my means and asking my friends and community to effectively subsidize it.

Rant over and if I was offensive please forgive me its just something I feel very strongly about.
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amother
Jetblack


 

Post Tue, Nov 10 2015, 2:04 pm
How do schools look at a gift? A family member gave away their car to us. We needed one and they had an extra so it was practically free. (Give me 100 bucks and it is yours type of deal. FOR A CAR). It happens to be a fancier car but we didn't care about that- we were glad to not have car payments and the car was needed because of commute (no public transit to where DH works...).
Yes it's a used BMW/Lexus/ Mercedes Benz type but if it was a honda we would be good with that. It was offered so we obviously took it and a used car would be more expensive. We might need help with tuition (no vacations, we don't own a home, and I am unemployed but seeking work).
And this relative isn't going to offer to pay tuition. I know schools often say, "if they paid for x, ask for help with tuition". But not frum and don't understand the concept. Public school is good enough...

Will the school understand?
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HonesttoGod




 
 
    
 

Post Tue, Nov 10 2015, 3:01 pm
I wouldn't deliberately take away from tuition. That is not right nor fair.
HOWEVER if the choice was either buy a house now and then be cheap and scrimp and save up again for the next couple years to be able to afford tuition and everything else, or be "rich" per se in a rental and pay tution, be comfortable, but not own a house for the next 10-20 years, I would choose the former.
A house is an asset. If something goes really bad I would at least have something to sell.
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amother
Aubergine


 

Post Tue, Nov 10 2015, 4:48 pm
We made a choice when we bought our house not to buy the biggest house we could afford. We knew tuition would soon be piling up and we bought accordingly. 18 years later BH we have managed to pay full tuitions for all our kids Bli ayin hara. But our house needs a lot of work! I feel that because we made such a huge effort ro always meer our tuition obligations we were blessed with kids who give us tons of nachas. I'm not saying people shouldn't get tuition breaks. But please make it a priority.
My husband and I make good $ and people are surprised when they see our house sometimes. They would expect it to be way nicer. But it's a roof over our heads and we have what we need and I'm so glad we did it this way. Even though our frum broker thought we were nuts at the time when we stuck to the lower budget!
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33055




 
 
    
 

Post Tue, Nov 10 2015, 6:36 pm
amother wrote:
How do schools look at a gift? A family member gave away their car to us. We needed one and they had an extra so it was practically free. (Give me 100 bucks and it is yours type of deal. FOR A CAR). It happens to be a fancier car but we didn't care about that- we were glad to not have car payments and the car was needed because of commute (no public transit to where DH works...).
Yes it's a used BMW/Lexus/ Mercedes Benz type but if it was a honda we would be good with that. It was offered so we obviously took it and a used car would be more expensive. We might need help with tuition (no vacations, we don't own a home, and I am unemployed but seeking work).
And this relative isn't going to offer to pay tuition. I know schools often say, "if they paid for x, ask for help with tuition". But not frum and don't understand the concept. Public school is good enough...

Will the school understand?


The schools will scrutinize a luxury name car more. If the car is not worth much on the open market be sure to note that on your application.

Many people will get gifts of vacations or camp or braces rather than cash. Some schools are not reasonable even though the recipient can't use the money for tuition.
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causemommysaid




 
 
    
 

Post Tue, Nov 10 2015, 6:41 pm
I say go for it. buy that house and minivan. You're never going to get the chance again
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amother
Aqua


 

Post Tue, Nov 10 2015, 7:00 pm
Just out of curiosity, how does the school know how much you have in a savings account?
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amother
Jetblack


 

Post Tue, Nov 10 2015, 7:23 pm
Squishy wrote:
The schools will scrutinize a luxury name car more. If the car is not worth much on the open market be sure to note that on your application.

Many people will get gifts of vacations or camp or braces rather than cash. Some schools are not reasonable even though the recipient can't use the money for tuition.


I know it's a luxury car. We never would have bought it. These family members won't help with tuitions. It's not like they take us to Israel or Europe. They wouldn't have bought us a car. But there was a spare in their garage and they needed the space back. So I should note it is like 10 years old? (Bought before DH and I married!).

I understand that some people use gifts to get around income requirements for government benefits or tuitions. And that's what the schools are looking to get around. But sometimes family won't help with tuition and aren't trying to get around "income caps". So what should I do?
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33055




 
 
    
 

Post Tue, Nov 10 2015, 7:32 pm
amother wrote:
I know it's a luxury car. We never would have bought it. These family members won't help with tuitions. It's not like they take us to Israel or Europe. They wouldn't have bought us a car. But there was a spare in their garage and they needed the space back. So I should note it is like 10 years old? (Bought before DH and I married!).

I understand that some people use gifts to get around income requirements for government benefits or tuitions. And that's what the schools are looking to get around. But sometimes family won't help with tuition and aren't trying to get around "income caps". So what should I do?


The first point is the car may not be a valuable car. It may be worth a great less than you think. It is worth even less as a trade in. It will get extra scrutiny because of its name. Your relative could have made garage room by selling it. I know someone who recently gave away a BMW because the trade in value was only $1000 and they rather look like a big shot.

You should note the lowest sales value. Check Kelly Blue Book for pricing.

Your story is common. Many relatives will not pay for tuition but will pay for other things as noted above. You can explain on the form that you received a one time gift of a running car which is worth X.
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amother
Jetblack


 

Post Tue, Nov 10 2015, 7:56 pm
Squishy wrote:
The first point is the car may not be a valuable car. It may be worth a great less than you think. It is worth even less as a trade in. It will get extra scrutiny because of its name. Your relative could have made garage room by selling it. I know someone who recently gave away a BMW because the trade in value was only $1000 and they rather look like a big shot.

You should note the lowest sales value. Check Kelly Blue Book for pricing.

Your story is common. Many relatives will not pay for tuition but will pay for other things as noted above. You can explain on the form that you received a one time gift of a running car which is worth X.


Thanks for your advice. It will get scrutiny but it wasnt given to get around tuition boards. So thanks for helping me out!
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33055




 
 
    
 

Post Tue, Nov 10 2015, 8:04 pm
amother wrote:
Thanks for your advice. It will get scrutiny but it wasnt given to get around tuition boards. So thanks for helping me out!


A lot of times these gifts aren't given to get around the board. Grandparents might give a vacation because they want to see the DGC. The parents have no say and can't take a cash alternative. You need to get across to the board that you never received control of the money to purchase an alternative.
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May




 
 
    
 

Post Tue, Nov 10 2015, 9:11 pm
amother wrote:
Just out of curiosity, how does the school know how much you have in a savings account?


Because when you apply for a
scholarship they ask you a lot of questions - amongst them, how much money do you have in savings.
Regarding the car, they don't just ask for the makes and models of your car, but also the year and how much you owe on it. It's all taken into account - I don't think a ten year old car that you aren't making payments on will hinder you that much., If your other details make you eligible, you'll probably still be eligible.
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amother
Cerulean


 

Post Wed, Nov 11 2015, 12:27 am
Just wondering, are such intrusive questions common in Brooklyn our just oot?
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