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Couple with $3m home feel stretched by mortgage and school fees
A couple earning $180,000 a year feel financially stretched despite owning a home worth about $3 million and having $100,000 in savings. Money educator Vanessa Stoykov says this reflects the difference between wealth tied up in a home and cash available for bills, and suggests assessing whether the strain is temporary or the commitments are unaffordable.
The couple owe $700,000 on their mortgage and pay about $50,000 a year for their sons’ private school fees, even after scholarships. With three years of school remaining, fees could total around $150,000 if they do not rise. Stoykov advises mapping income after tax against essential spending, deciding how much of the offset account to preserve as a buffer, and reconsidering whether the school fees still fit their priorities; once they end, the freed-up money could rebuild savings or reduce the mortgage.
In short
- A $3 million home does not mean cash is readily available.
- School fees take nearly 28% of the couple’s gross income.
- A three-year budget review could clarify whether to adjust plans.
Steelman: both sides, in good faith
The strongest fair case each way — we don't pick a winner.
The case for
The couple may reasonably see the school fees as a worthwhile investment in their sons’ education and want to honour a commitment that has only three years left. Their home equity and savings suggest substantial assets, while the current pressure may be temporary; a clear budget and use of the mortgage offset could help them manage the remaining fees without giving up priorities they value.
The case against
A high-value home does not provide much help with bills unless the couple borrow against it or sell, and their income is already committed to a large mortgage and substantial fees. Continuing could leave too little accessible savings for emergencies or other needs, so they may reasonably decide that private schooling no longer fits their finances and redirect the money towards a stronger buffer or lower debt.
Explained simply
A home’s market value is not the same as money its owners can readily spend. A household can have substantial wealth on paper but still face pressure on its monthly budget if much of that wealth is tied up in property.
Mortgage repayments and school fees are regular commitments that compete with other household costs and saving. Private school fees can continue for years, so families may weigh them against their income, savings and other priorities.
An offset account links savings to a mortgage and can reduce the interest charged, while keeping money accessible. Looking at income after tax alongside essential costs can help show whether a squeeze is temporary or whether commitments need to change.
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Originally published by Daily Mail as “We own a $3million home and have $100,000 in savings. So why do we still feel one pay cheque away from disaster? VANESSA STOYKOV”.