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

Dear Vanessa,

My husband and I earn $180,000 a year between us, but lately I feel like we’re drowning financially.

Our two teenage sons attend a private school. Both have 50 per cent scholarships, yet we still pay around $50,000 a year in fees.

Our home is worth about $3million, with a $700,000 mortgage. We have $100,000 in an offset account earmarked for the remaining three years of school fees.

On paper, we should be comfortable. In reality, the mortgage, school fees and everyday living costs leave us feeling as though there is never enough money. I worry about what happens if one of us loses a job or an unexpected bill arrives.

Everyone around us seems to earn $300,000 or more. I know we’re fortunate, but I’m beginning to wonder whether we’ve overstretched ourselves.

Should we just hang on for another three years until the boys finish school, or are we living beyond our means?

Asset Rich, Cash Poor

Dear Asset Rich, Cash Poor,

There’s something fascinating happening around the world right now. People who once considered themselves comfortably wealthy are looking at their bank accounts and wondering where all their money has gone.

You own a $3million home, have around $2.3million in equity and earn $180,000 a year. Yet you feel financially trapped.

Being wealthy and having money available to spend are two different things.

Your home might be worth $3million, but unless you sell, downsize or borrow against it, that wealth won’t pay the grocery bills.

Your school fees alone consume almost 28 per cent of your gross household income.

That’s before income tax, mortgage repayments, groceries, insurance or utilities.

It’s an enormous commitment, particularly when the income you take home is considerably less than the headline figure. That’s why I encourage people to focus less on salary and more on what remains after essential expenses.

Are you living beyond your means, or going through an exceptionally expensive stage of life? There’s a difference.

Three years of school fees means roughly $150,000 still to pay, assuming fees don’t rise. You’ve saved $100,000 towards that.

Rather than panic, treat the next 36 months as a financial project.

Calculate your after-tax income and monthly spending. Can you meet your commitments without taking on debt or draining your emergency savings?

Your offset account reduces mortgage interest while giving you a buffer for unexpected costs.

Spend it on school fees and you lose some of both benefits.

With teenagers and a mortgage, that buffer matters. Decide how much you need in reserve if something goes wrong. An offset account isn’t just money waiting to be spent; it can give you valuable flexibility when life changes.

Now for the elephant in the room: private school.

Education is personal. Families make sacrifices to give their children opportunities they value.

Your boys have scholarships, they’re settled and only three years remain.

But if you weren’t already committed to these fees, would you make the same decision today?

Sometimes we keep spending because we’ve already invested so much, rather than asking whether the decision still works.

Changing schools isn’t automatically the answer. Being honest about the trade-offs is.

Those families earning $300,000 may have huge mortgages, family help, inheritances or debts you know nothing about.

Comparing your reality with someone else’s apparent lifestyle is a game nobody wins.

And what happens when the school fees finish?

That $50,000 annual expense could become a chance to rebuild savings, pay down your mortgage and strengthen your retirement position.

My advice is to map out the next three years together. Look at what’s coming in, what’s going out and what you can realistically afford. You can also use my free Find a Financial Adviser service here and get professional advice.

You may find you’re overstretched and need to change course. Or this may simply be the most expensive three years of your family’s financial life.

All the best,

Vanessa

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