Daycare years: were you in the red?

[Anonymous]

We are getting ready to TTC and I understand that we will likely be paying about $25k for daycare. Messing around with our budget I don't know how to cut out that much - sure we will be traveling less, but that's about the only big thing that we can change. I think we will basically be breaking even. What about you?

[Anonymous]

That sounds accurate, low even. It was tight in the beginning but we always were able to pay daycare and have some left for savings. see if you can make some kind of change (job, home) to either reduce your expenses or increase income.

[Anonymous]

We were not in the red. We chose to use a church based daycare and was quite pleased with the care. We are no religious but respected their religion. Our kids learned a lot academically and it was cheap. Shop around and choose your options wisely. I found that the 2k monthly daycares did nothing more or better than the cheaper ones.

[Anonymous]

Have you looked at a nanny share? Sometimes those are better options than a daycare.

[Anonymous]

Anonymous wrote:Have you looked at a nanny share? Sometimes those are better options than a daycare.

+1. We are very happy with our nanny share. Costs about $30k a year but we enjoy the convenience and the more focused attention DC gets. It hasn't been as tough as we expected but I think that's largely because we both have gotten decent raises along the way.

[Anonymous]

I know people that stopped or decrease retirement savings to pay for daycare. You do what you have to do.

[Anonymous]

Look at home daycares.

[Anonymous]

No, but only one kid, I stayed home for the first year (not my ideal but was due to unusual circumstances), and we got a good deal on a fixer-upper house.

[Anonymous]

Anonymous wrote:We were not in the red. We chose to use a church based daycare and was quite pleased with the care. We are no religious but respected their religion. Our kids learned a lot academically and it was cheap. Shop around and choose your options wisely. I found that the 2k monthly daycares did nothing more or better than the cheaper ones.

Depending on the state, religious daycare is often subject to far less supervision and regulation. Buyer beware.

[Anonymous]

Daycare years I broke even. Thankfully I had built up a cushion ahead of time, in part by making an account into which I put a daycare payment every month as soon as I got pregnant - this helped me build up a year’s slush fund for child expenses, and got me used to living on the amount with the daycare taken out. Thankfully, I never had to dip into the slush fund, so,it became the seed of the college fund.

[Anonymous]

When we had one, we were in an apartment, and it basically just meant we dramatically lowered our house savings (we had been saving $2,500 a month towards a downpayment).

Then we moved into our house, which was a huge new monthly expense, as the mortgage was about 30% more than our rent had been. And then we had a second, just 18 months younger than the first.

We're in DC, with free PK-3 that takes all inbound kids every year (thank god) but we're ending up with about 18 months of childcare for two. We are definitely in the red, by about $300 a month, so this is going to cost us about $5000 from our emergency fund. We've also dramatically lowered our retirement savings during this time - just enough to maximize my husband's 401(k) match, so only 5% of his salary (my company just gives a flat 3% rather than a match, so I stopped contributing all together).

But - we have very stable jobs, excellent career prospects should something happen to one of our jobs, a large emergency fund ($60k), and a fixed rate 3% mortgage on our forever home. It's only 18 months.

I'll also note - we could avoid being in the red by using daycare. We currently have a nanny, on the books, all in cost is $60k. Daycare where we are (close to downtown DC) would cost us about $2,400 a month for the baby and maybe $2,000 for the toddler, which would bring us to just shy of $53k a year. But honestly, a nanny is worth that extra $7k with two so little. And as soon as the older goes to school, we'll move to doing a nanny share for the younger and cut our bill dramatically.

[Anonymous]

You will not be buying as many (nice) clothes, spending money on fancy vacations, or going to nice dinners, or buying nice wine. The daycare years are survival years! So I think it evens out.

[Anonymous]

Anonymous wrote:I know people that stopped or decrease retirement savings to pay for daycare. You do what you have to do.

This was us.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I know people that stopped or decrease retirement savings to pay for daycare. You do what you have to do.

This was us.

Yes-- I don't think we were in the red but it was definitely the time money was tightest and we cut back on retirement (and other) savings.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I know people that stopped or decrease retirement savings to pay for daycare. You do what you have to do.

This was us.

This. I put into retirement just the amount that my employer matched (didn't want to forego free money), no more. We also didn't start saving for college until after we stopped paying for daycare. We spent very little on vacations/entertainment. And, the cost of daycare was a material factor in our decision to wait until DC1 was 4 (and in public pre-k) before we started TTC again. (Our kids are 5.5 years apart--no regrets, I have loved this age gap.)