How We Made $100/Hour Working at the YMCA
By: Christopher Pascale
Hacking tuition allows you to save thousands, which is cash you don’t have to earn, so you don’t get taxed. This concept of everyday saving came up repeatedly in the work of Dr. Thomas Stanley, who wrote The Millionaire Next Door, and other great books that I highly recommend.
Real examples from my own life include:
- Paying half price for a $10,000 pre-k/daycare program
- Getting a scholarship for my oldest to go to science camp
- Setting my kids up to have no tuition costs in college
- My wife and I using the GI Bill and military tuition assistance to go from college freshman to MBAs
- A merit based scholarship for myself
- Sending my daughter on a year-long foreign exchange for only $6,000
Throughout the examples, I’ll also discuss other possible savings opportunities, including FAFSA for students who are not dependents of their parents.
Free or Discounted Pre-K
For my 4th daughter (and my wife’s sanity) a full-day pre-k was the best option. The problem was that the local YMCA’s program was $1,000/month. While inquiring further about the program, the person who runs the daycare said there was an opening for part-time help, and that the tuition would be half-off for employees.
My wife was hired at $9.00/hour for 16 hours/week, which would be enough to pay for the program while giving her ample time to focus on completing graduate school.
Then, 1 month later, an updated budget called for reducing the daycare employees’ hours. As my wife was put on for 4 hours/week instead of 16, she resigned so that another employee could have the hours.
Before she did, though, she paid the full balance of $5,000 on our JetBlue Points Card.
Net result: She made about $100/hour working at the YMCA, and the $5,000 we saved in tuition costs were about $7,000 we didn’t have to work to earn.
Science Camp Scholarship
In 2015, I sent my oldest daughter to a sleepaway science camp run by an Ivy League school.
Tuition was $800/week, and she went for 1 week. While applying, I inquired about scholarships, and there were ones specifically for low-income families. My 2014 taxes had not yet been filed, and my 2013 taxable income (I have $44,000 in untaxed income) was well below the limit. As the only family who applied for the scholarship, we were the happy recipients of it.
If the savings wasn’t nice enough, we had a happy surprise to find that 4 girls from her school were also going the very same week. They stayed in the same cabin, and our families are good friends today.
Another Camp Hack you can look into is driving the day camp bus for pick-up and drop-off if you are available. Not only can your kids go to camp for free, but you might find it very rewarding knowing that these kids are getting to and from camp safely.
What’s important to remember is that while there are many fine programs, the best ones don’t have to cost full-price, and they can even be free.
The Best College Is the Free One
One of my co-workers teaches at a middle-ranked, overpriced private university.
“I’d never send my kids there,” he told me, “but for free? It’s the only place I’ll send them.”
Tuition at this school is almost $50,000/year, which is completely ridiculous, especially if you’re studying something like accounting or nursing, where incomes are pretty much just what they are. It’s also ridiculous if you’re studying law, because this institution isn’t going to lead you to a huge salary out the gate – you’ll make the average, which is $64,000 where I live, the same as accountants and nurses.
Re-stating what my co-worker said, paying to go that school is stupid, but going for free makes it the very best school for his kids.
The only exception to the free is best rule is if you’re going to Oxford, Harvard, Yale, Princeton, West Point, Annapolis, or the Merchant Marine Academy. The latter three may not cost you up front, but your kids will pay with their service afterwards. These schools have a great deal to offer beyond normal courses, but the other schools don’t offer much beyond what you take from them, so if you’re choosing between paying $250,000 for a bachelor’s at one or $0.00 for the same bachelor’s at another, the choice should be clear by about a quarter-million dollars.
I’m currently an adjunct professor at a community college. My kids have been prepped since they were young that they will be taking courses there, and now that I’m teaching, tuition will be free.
The cost of an associate’s degree, with all the fees, is currently $10,000, so the math looks like this:
Number of Children x Tuition
4 x $10,000
To teach one course right now for 4 hours a week, I earn about $4,800 per semester. I have the same schedule this coming semester. Using these numbers, if I keep teaching for the next 15 years, I’ll earn taxable income of $144,000 while having the added benefit of non-taxable tuition savings of $40,000.
Adding to this, I’ll qualify for a NY State Teachers defined benefit pension, which I discuss at length in the linked piece on pension hacking.
Now that we’ve covered how much we can save as parents, it’s time to put some cash into our kids’ pockets.
F.I.R.E. Side FAFSA
For those going FI very young, you might have no income, and can, therefore, legitimately qualify for FAFSA. I haven’t dived too deeply into how to do this because it’s so far outside my own plans, but one way to do this would be to have all of your money in your home and a retirement account while taking little taxable income. It’s not something I’ll be doing, but it can be done. For more info on assets from the FAFSA side, click here.
Another is to have your grown child live independently of you. For my kids, as mentioned in “Kids on F.I.R.E.,” they’ll not only be working and filing tax returns through their teen years, but they’ll also do a year of service away from home in a program like AmeriCorps, which will allow them to legally file as being independent of us since they won’t be living in our home.
I’m not an expert on this subject, and don’t work in the student aid office, but as a young adult living on my own, both my wife and I qualified for FAFSA, which figured into our income each semester. Based on what I’m seeing from the financial aid site, this won’t matter while my kids get a 2-year degree (since tuition will be free), but could be extremely helpful while wrapping up a bachelor’s.
And this matters because my incomes (plural) will be too high to qualify.
Another option is to do what my wife and I did: join the military and get the GI Bill. I don’t recommend it to everyone, but for those who have used it, the benefits have been significant, from ongoing tax-free income to being able to buy homes (plural) with no money down through VA loans, and even getting into Ivy League schools.
GI Bill: No Debt & an Ivy League Education
Colleges are hungry for students who have money. For those who think cash isn’t enticing to institutions of higher learning, you are mistaken. Add to this the dynamic people who go from the battlefield to the classroom, and it’s no surprise that since 2008 Columbia has been actively seeking veterans. In fact, 10-15% of their incoming freshman have served. For some perspective, 7.3% of all Americans have served at some point, but more than 10% of freshman at Columbia are going from a base to their campus.
As the piece in The New York Times notes, veterans looking to go to Columbia have done more than most of the privileged 18-year-olds applying. While little William Chesterfield IV can’t stress enough how many lives he saved by holding the other half of a plywood board during his week building part of a shack in Panama, USMC Sgt. Angel Rodriguez almost forgot to mention that he was an unofficial liaison between the staff officers and those seeking refugee status in Afghanistan, a position he attained by taking the time to learn conversational Pashto in his spare moments between day and nighttime raids of villages that were being harassed by terrorist forces.
Many don’t believe military vets are going to Ivy League schools, or, if they are, that they must have been star students who just so happened to be patriotic. To dispel this notion, I’ll discuss the academic careers of a good friend of mine, and my wife.
Dylan Hayden is a Navy veteran. Following an academic career that wasn’t good enough to get an ROTC scholarship, he graduated with a BS from SUNY New Paltz and enlisted as a linguist. Following 6 years of active service he was accepted into the University of Pennsylvania where he earned an MPA. Currently, he is an analyst for HUD while getting a PhD at the University of Baltimore, where he is conducting original research into issues that severely affect housing in Maryland and West Virginia.
Dylan was fortunate enough to have parents who paid for his bachelor’s degree. But he took care of his MPA from UPenn with the GI Bill, which is also what’s paying for his PhD. Additionally, he has an associate’s from the Defense Language Institute, where he learned Arabic and Pashto.
My wife only attended high school up until 9th grade, and then later got a GED so she could enlist in the Air Force Reserves. Later, she went active duty Army. Prior to leaving school, her formal education was severely fractured by homeschooling (which was no-schooling), leaving significant holes in basic academic knowledge that most Americans can take for granted. While in the Air Force Reserves she began taking remedial courses to get herself college-ready with Writing 80 instead of ENG101, and Math 60 instead of Algebra. She soon began taking courses for credit, earning an AA from Central Texas College in 2010, and then a BS from Upper Iowa University in 2012 (schools chosen because they were the ones on the base where she was stationed).
The courses at Central Texas and Upper Iowa University were covered by the Army’s tuition assistance program. Since retiring from the Army, she’s used her GI Bill to explore a multitude of graduate programs. On May 10, 2018, she took the last final exam for her MBA from St. Joseph’s College, which USNews ranks well above much more well-known and prestigious schools like FIT, John Jay, St. John’s, and even the SUNY and CUNY schools.
I cannot stress enough that I am not saying to join the military. In fact, I am a regular contributor to a website called iHateTheUSMC.com, which, as you can imagine, gets a lot of visitors because they google that exact phrase. While there are some incredible benefits to joining, like the GI Bill and pensions, you are guaranteeing yourself a period of time (even if you retire) of poverty-level wages. You’re also risking the physical and mental health of yourself and your family.
Merit Based Scholarship
In 2015, my GI Bill ran out. However, I still had a semester left to complete my MBA, and could not have applied for a needs-based scholarship because my income was too high.
In doing some research, I found that the school I went to offers a Leadership Award to 1 student every year. The award comes with a $5,000 scholarship.
I applied and received it. Along with the tax-free tuition money, I made valuable contacts at the alumni banquet that led to me being the keynote speaker at an event in 2017.
A Year Abroad for Only $6,000
My oldest daughter spent her 10th grade year in Australia. This was possible because she was sponsored through our local Rotary Club.
If you think we are crazy to send a minor abroad, you are not alone. While thousands of kids do this (we hosted a young lady from Thailand, who was sponsored by her local Rotary Club), it is a tiny minority. Many feel more comfortable with the idea that the kids wait until they are in college. But there are huge differences to consider.
Aside from cost – Forbes reports college study abroad prices to be $32,000 – the major difference between sending a minor abroad in high school and a college-age adult is that my daughter was hosted by families who had background checks, and she was supervised by another adult in charge of all the exchange kids in the local region. Also, she had to write monthly reports, and attend monthly meetings. Lastly, as a minor, she was more protected legally than as an adult. Lastly, even at 16, we were able to opt for her to fly as an unaccompanied minor, meaning that airline employees had a legal obligation to ensure her safety and well-being. This was a great help when she had a very short layover in a very large airport.
On a final note, it’s hard to take any argument against sending a 16-17 year old abroad to live with background-checked families when it’s so celebrated to drop off 17-18 year olds at a dorm full of a thousand horny, drunken teenagers.
The Cost: Prior to her trip, we went to monthly meetings for a year. She had to get a passport, be interviewed at the Australian Embassy for visa consideration, and we bought plane tickets. Her host family picked her up at the airport and were then responsible for feeding and sheltering her, so there were minimal food expenses, and no lodging costs. We also paid for her to go on a trip to The Outback with the other 30 exchange students in her area.
In the end, the entire trip cost us about $6,000, and she spent $1,000 of her own money. This is compared to the Forbes reported $32,000 for college students to go abroad.
Money you save is money you don’t have to earn, which is money for which you pay no taxes.
The scholarship for 1 week of science camp saved me $800 in cash outflow, and also from having to earn $1,100.
The five grand my wife saved by getting a job at the YMCA was about $7,000 we didn’t have to make, and created a net benefit that translated to her earning about $100/hour for the month she worked there.
When my kids go to college, they’ll be eligible to file for FAFSA for themselves to get the money, and I’ll save up to $40,000 on tuition because I will be teaching there. If I get a job at a 4-year institution (or if they do – like The Mad Fientist did), the savings might be more like $400,000.
This article is just the tip of an incredibly large iceberg. There is nothing stopping us from finding our way into tuition-free situations. Schools are hiring all the time, and not just professors, but admin staff, recruiters, hospital aides and janitors.
Knowing this, I still have a 529 plan, but if we can manage to hack our way through all of these kids’ tuitions, then perhaps those funds will continue to grow for my grandchildren. Or I may just have to liquidate the account and buy something more valuable with the money, dealing with whatever tax consequences there may be.
Christopher Pascale is an author, accountant and adjunct professor from Long Island. He is the former CFO of Portfolios with Purpose. His finance writing has been featured on the AIPCA’s “Tax Matters” page, WealthyJoe.com, and others. He is also the author of a book of poetry, and collection of true stories due to be released in 2019