Geo Arbitrage with Kids: School and Childcare Abroad

A family of four sending two children to a top-tier independent day school in the United States faces a tuition bill that the National Association of Independent Schools pegged at a median of $32,251 per child for the 2024–25 school year. Two kids, one school: north of $64,000 a year, before uniforms, fees, or a single extracurricular. That same family can put both children in an American-curriculum international school in Lisbon for roughly €30,000 to €48,000 combined — and in Mexico City, sometimes for less than half of what one US private seat costs.

This is the part of the geographic arbitrage pitch that gets skipped. Most coverage stops at rent and groceries. For households with school-age children, education and childcare are the line items that decide whether a move abroad actually clears — and they cut in directions the COL indices don’t capture.

Scope: this analysis covers families with children relocating abroad while retaining US-sourced remote income at the $150k+ level, comparing US childcare and private/independent school costs against international school and childcare costs in three representative destinations (Lisbon, Mexico City, Medellín). School and childcare figures reflect 2024–2026 published fee schedules and survey data; tax figures use IRS tax-year 2025 and 2026 amounts. International school tuition was originally quoted in euros and Mexican pesos and converted at mid-2026 exchange rates — currency movement alone can shift these comparisons by 10% or more, so treat dollar conversions as directional. Numbeo cost-of-living differentials are self-reported and used only as a directional reference, never as a sole citation for a cost claim. This is cost analysis, not tax, immigration, or financial advice; school availability, waitlists, and visa eligibility vary by family and are outside this model.

The numbers that decide the move

Education and childcare cost anchors — US baseline vs. abroad
Figure	Amount	Source & year
US median independent day-school tuition (K–12, per child)	$32,251	NAIS, 2024–25
US national average childcare price (per child)	$13,184	Child Care Aware of America, 2025
Lisbon American-curriculum international school (per child)	€15,000–€24,000	iSchool Advisor, 2026
Mexico City mid-tier international school (per child)	$5,000–$20,000	iSchool Advisor / ExpatSchoolGuide, 2026
Foreign earned income exclusion (per qualifying person)	$130,000 (2025) / $132,900 (2026)	IRS Rev. Proc. 2025-32

Sources: National Association of Independent Schools (2024–25); Child Care Aware of America, Child Care in America: 2025 Price & Supply; International School Advisor (2026); Internal Revenue Service, tax years 2025 and 2026.

What you’re actually escaping: the US cost stack

Start with the baseline most families underestimate. Child Care Aware of America reported the national average price of childcare reached $13,184 in 2025, up from $13,128 in 2024 — and that’s an average that masks brutal variation. In high-cost states, infant center care runs far higher: California’s median sat near $19,719, and New York’s full-time infant care has historically cleared $22,000. For a household with one infant and one toddler, $35,000 a year in childcare is not an outlier in a coastal metro.

School-age children shift the burden from childcare to tuition, but the dollar figures rarely shrink. The National Association of Independent Schools reported median tuition at independent day schools of $32,251 for K–12 in 2024–25, with private boarding schools averaging $71,715. Even stepping down from the independent tier, PrivateSchoolReview put the national average for K–12 private schools near $14,999 in 2025, and the Education Data Initiative cited roughly $12,790 across all private schools. The spread is the point: a New York or Connecticut family choosing private education is operating in a different price universe than a family in Nebraska, where average private tuition runs closer to $4,857.

For a dual-income household earning $150k+ in a high-cost metro, the combined education-plus-childcare load for two children can sit anywhere between $30,000 and $80,000 annually depending on age, school tier, and city. That range — not rent — is frequently the largest discretionary line item in the budget, and it’s the one geographic arbitrage targets most directly. Families running the broader math should anchor against the geo arbitrage guide for remote workers before isolating the schooling variable.

Lisbon: lower tuition, but not a free pass

Portugal has become the default European destination for US remote families, and the school math explains part of why. Published fee schedules for international schools in Greater Lisbon for the 2025–26 academic years show typical annual tuition ranging from roughly €10,500 to €26,700, according to reporting aggregated by iSchool Advisor and corroborated by Portugal Property’s 2025 survey, which cited a €6,000 to €25,000+ band depending on curriculum and grade.

The relevant comparison for a US family isn’t the bottom of that range — it’s the American-pattern schools offering US diplomas and AP courses, which iSchool Advisor placed at €15,000 to €24,000 per year per child in 2026. Carlucci American International School of Lisbon, one of the established options, published 2025–26 tuition from €11,716 up to €22,736. Run two children through American-curriculum seats and you’re looking at roughly €30,000 to €48,000 — about $33,000 to $52,000 at mid-2026 rates.

Set against a US independent-school baseline of $64,000+ for two children, that’s real savings. But the headline understates the friction. One-time enrolment fees in Lisbon commonly run €2,500 to €3,000 per child, schools review tuition annually with steady increases, and the cheaper bilingual Portuguese-English options (€7,500 to €14,000) trade English-medium instruction for language immersion that younger children absorb more easily than teenagers. A family relocating a 15-year-old mid-IB-programme has far less flexibility than one moving a six-year-old. The tax layer matters too: families weighing Portugal specifically should model the Portugal NHR tax regime for remote workers alongside school costs, and study a full New York to Lisbon net gain breakdown before committing.

Mexico City: the proximity play

For families who want the same hemisphere and a shorter flight home, Mexico City changes the arithmetic again. iSchool Advisor’s 2026 guidance put international school tuition across the city at roughly MXN 100,000 to MXN 400,000 — about USD $5,000 to $20,000 — with the most established American-curriculum schools and full IB-continuum institutions running MXN 200,000 to MXN 400,000 or more (USD $10,000 to $20,000+). A separate 2026 breakdown placed full IB Diploma years at premium schools between USD $28,000 and $37,500, and ExpatSchoolGuide cited secondary and IB years reaching $10,000 to $35,000+.

The dispersion here is wider than Lisbon’s, which cuts both ways. A family willing to use a strong bilingual school (SEP curriculum with intensive English and a Cambridge or IB complement, at roughly USD $9,400 to $17,600) can place two children for well under what a single US independent-school seat costs. A family insisting on a top-tier full-IB American school in Polanco or Lomas will pay closer to US private prices, eroding the education-specific savings even as the broader cost of living drops.

And the broader cost of living does drop sharply. Numbeo’s self-reported indices put Mexico City’s cost of living roughly 53.9% below New York’s excluding rent — a directional figure, not a precise one, but consistent with the magnitude families report. The peso’s volatility is the asterisk: education allowances or budgets denominated in dollars stretch further when the peso weakens and compress when it strengthens, so multi-year fee projections carry real currency risk. The fuller picture sits in the San Francisco to Mexico City COL and tax math.

Finluxy Geo Arbitrage Net Gain: three family scenarios

The proprietary metric here is the Finluxy Geo Arbitrage Net Gain — annual net financial gain equal to cost-of-living reduction in the destination, minus any income reduction from the move, minus the tax differential, minus relocation cost amortized over the planned stay. For families, the education and childcare delta is the largest single component of the COL reduction, so the metric below treats it explicitly rather than burying it in a blended index.

Each scenario assumes a household with $200,000 in retained US-sourced remote income, two school-age children, a three-year planned stay, and $18,000 in relocation cost ($6,000/year amortized). Income reduction is zero — the income is remote and employer-tied. The tax differential reflects the foreign earned income exclusion (FEIE), $130,000 per qualifying person for tax year 2025, applied where the family meets the physical presence or bona fide residence test; the differential shown is the modeled net change versus their US state-and-federal position, not a precise liability.

Finluxy Geo Arbitrage Net Gain — family-of-four scenarios (annual)
Component	NYC → Lisbon	NYC → Mexico City	SF → Medellín
COL reduction (general living)	$42,000	$46,000	$50,000
Education/childcare delta vs. US baseline	$18,000	$30,000	$34,000
Income reduction (pay cut)	$0	$0	$0
Tax differential (FEIE applied)	−$9,000	−$4,000	−$3,000
Relocation cost (amortized 3 yrs)	−$6,000	−$6,000	−$6,000
Finluxy Geo Arbitrage Net Gain	$45,000	$66,000	$75,000

Model assumptions: $200,000 retained remote income, two children, 3-year stay, $18,000 relocation cost. COL reductions are directional, anchored to Numbeo differentials (NYC vs. Lisbon ~48.5% lower excl. rent; NYC vs. Mexico City ~53.9% lower excl. rent; self-reported, used as directional reference only). Education delta reflects the gap between US baselines (NAIS 2024–25; Child Care Aware 2025) and destination international-school fees (iSchool Advisor 2026). Tax differential reflects FEIE at $130,000/person for tax year 2025 (IRS Rev. Proc. 2025-32) and is a modeled estimate, not a computed liability. Medellín general-COL figure is a segment estimate; school-specific data for Medellín was not isolated and the education delta uses the Latin American international-school segment average — treat the SF→Medellín row as the least precise of the three.

Two structural points emerge. The tax differential runs against the family in every case, not for it — because moving from a no-income-tax or moderate-tax position into a treaty country with the FEIE applied rarely produces a clean tax win once foreign tax exposure and the stacking rule are accounted for. The savings come from cost of living and schooling, not from the tax code. Families assuming the FEIE is a windfall should read the foreign earned income exclusion qualification rules and the broader US citizen abroad tax obligation breakdown.

What the COL indices miss: the childcare-to-tuition crossover

Here’s the finding most relocation coverage overlooks. Cost-of-living indices blend childcare and education into a general basket, which obscures the single most important variable for families: the age of the children at the moment of the move. The savings are not constant across childhood — they invert.

For a family with infants and toddlers, the US childcare burden ($13,184 average, far higher in coastal metros) is the thing being escaped, and many destinations offer dramatically cheaper care or affordable bilingual preschools. The education delta is enormous because the US baseline is so punishing. For a family with teenagers in an established US private school, the picture compresses: top-tier international schools abroad approach US private prices, the child has less linguistic flexibility, and the relocation disrupts college-preparation continuity at the worst possible moment.

The math therefore favors moving early — before children are locked into a US private-school track and college pipeline — far more than the blended COL number suggests. A household running the numbers on a teenager and concluding the savings are thin is reading the data correctly; the same household running them on a four-year-old is looking at the strongest version of the entire arbitrage. The indices flatten this. The family calendar doesn’t.

The $150k+ household decision

For a household at $150k+, the schooling variable reframes the entire geographic arbitrage question. At this income, the family is likely already paying for private education or premium childcare domestically — which means the relevant comparison is not “free US public school vs. paid international school,” but “expensive US private/childcare vs. moderately-priced international school.” That comparison favors the move far more often than the public-school comparison would, and it’s the one most online calculators get wrong by defaulting to public-school assumptions.

The thresholds that matter are concrete. If both spouses can independently meet the FEIE qualification tests, the household can shelter up to $260,000 of combined earned income for tax year 2025 — but only earned income, and the exclusion does nothing for the self-employment tax or for the convenience of employer rule, under which California and New York may still assert tax on remote workers tied to in-state employers. A family assuming the move escapes California tax entirely should pressure-test that against the California remote worker tax escape analysis before counting the savings. The trade-offs are real: a child’s continuity, a spouse’s career, proximity to aging parents, and currency risk on multi-year tuition commitments all sit outside the spreadsheet. The net-gain figures in this analysis — $45,000 to $75,000 annually — are large enough to justify serious modeling, but they are pre-tax-of-disruption. The households that come out ahead are the ones that move while their children are young, qualify cleanly for the FEIE, and treat the school decision as the anchor of the relocation rather than an afterthought. For a sense of how the same income behaves across destinations before children enter the equation, the purchasing power of $150k by country sets the baseline.

Methodology

I prioritized primary and institutional sources for every figure tied to a threshold, rate, or current-year data point. Tax figures — the foreign earned income exclusion at $130,000 (tax year 2025) and $132,900 (tax year 2026) — come from the IRS via Rev. Proc. 2025-32, verified against the IRS international taxpayers guidance rather than recalled. US childcare figures come from Child Care Aware of America’s 2025 Price & Supply analysis; US private-school baselines from the National Association of Independent Schools (2024–25 median) and PrivateSchoolReview / Education Data Initiative for the broader average.

International school fees were drawn from 2026 published fee schedules and aggregator reporting (International School Advisor, Portugal Property, ExpatSchoolGuide) and individual school fee pages where available; these are trade and secondary sources used to establish ranges, not point liabilities, and the article presents them as ranges accordingly. Cost-of-living differentials use Numbeo as a directional reference only, explicitly flagged as self-reported. Currency conversions from euros and Mexican pesos use mid-2026 rates and are labeled as approximate. The Finluxy Geo Arbitrage Net Gain figures are modeled estimates synthesizing these sources under stated assumptions; the Medellín scenario relies on segment averages rather than city-specific school data and is flagged as the least precise. Where I could not isolate a city-specific point figure, I defaulted to a defensible range from the nearest available source rather than a fabricated number.

Frequently asked questions

Are international schools abroad always cheaper than US private schools?

No. Mid-tier and bilingual international schools in Lisbon and Mexico City often cost well under the US independent-school median of $32,251 (NAIS, 2024–25), but top-tier full-IB American-curriculum schools abroad can approach or match US private prices. Premium IB Diploma years in Mexico City have been quoted at USD $28,000–$37,500 (iSchool Advisor, 2026). The savings depend heavily on which tier you choose.

Does the foreign earned income exclusion cover school tuition costs?

No — the FEIE excludes earned income from US federal income tax (up to $130,000 per qualifying person for tax year 2025), but it doesn’t directly subsidize tuition. There is a separate foreign housing exclusion for qualifying housing expenses, but tuition is not a housing expense. The school savings come from lower international fees relative to the US baseline, not from the tax code.

Is it better to move abroad when children are young or older?

The data favors moving early. For young children, the US childcare burden being escaped is large and language immersion is easier; for teenagers in established US private schools, international fees approach US prices and the move disrupts college preparation. The education savings are largest when children are youngest.

Will moving abroad eliminate my US state income tax?

Not necessarily. Under the convenience of employer rule, states like California and New York may continue to assert income tax on remote workers tied to in-state employers, even when the worker lives abroad. State nexus rules are separate from federal FEIE treatment and should be modeled independently.

Sources & References

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