How do people afford kids?

[Anonymous]

Anonymous wrote:

Anonymous wrote:A note to the Original Poster:
Treat yourself to a paid financial advisor.
The advisor can help you on how much you should be saving for retirement (you are not saving enough right now); how much you should be withholding; help you create a budget; prioritize savings (6 months emergency cash followed by getting rid of debt)

They can also help advise you on being smart on insurance - do you have enough life insurance? or long term disability insurance?

A financial advisor is probably a really great idea now that we are in our 30s and settled down -- I used my parent's advisor to buy some stocks in the past, but never really sat down with one of my own. I'm a fed and max out TSP, have a FERS pension, and decent life insurance (although DH and I will probably up our policies once we have kids). I think our goal is also going to be to increase our liquid savings since we have a lot tied up in our house, investments, etc.

Tip #1 - get insurance before you are pregnant - in case you have complications it is harder to get insurance
Tip#2 - buy insurance now - it is cheaper while you are younger
Tip #3 - If you are buying stocks and your parents have a financial advisor - you probably are not in the dire situation that you think you are (and presented yourself in)

[Anonymous]

You bought too much house. It's that simple . You can justify it any way you want, but that is your major fixed expense and it's going to cause stress and majorly limit you now.
Let's not gloss over that you said you have empty rooms to fill .

[Anonymous]

Anonymous wrote:

Anonymous wrote: Also, a lot of PPs have pointed out that weekend activities change once you have kids. I imagine we'll be spending more time at home, ordering pizza, going to the park, etc. as opposed to going to concerts and trying new restaurants. In-home daycare might be worth researching for us or perhaps daycare in the burbs will be cheaper than what my friends closer-in pay.

I'm glad to know there are others out there who make things work in order to have kids!

Of course, ordering pizza once in awhile is fine and fun - if you don't already know how to cook well from scratch, in bulk - that will be a massive money saver for you, not to mention, time, sanity, and health. I basically double every recipe I make and stick one in the freezer, assuming it is a freezing-friendly recipe. I've got my slow cooker recipes down to a science.

Food is one of the largest expenses for a family following housing and is one where there is a lot of room for savings depending on how much time and skill you can put into it.

$2k for quality infant daycare doesn't seem very far off to me, so I wouldn't count on that being much lower.

I recommend learning how to make pizza from scratch. I got into when we went through a super belt-tightening phase when DH was between jobs and we had two toddlers. Now, everyone in the house prefers "mom's pizza" to any take out. It's fun and a LOT cheaper. And, I feel good that I'll be sending my kids out into the world prepared to impress future roommates with their pizza making abilities

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote: Also, a lot of PPs have pointed out that weekend activities change once you have kids. I imagine we'll be spending more time at home, ordering pizza, going to the park, etc. as opposed to going to concerts and trying new restaurants. In-home daycare might be worth researching for us or perhaps daycare in the burbs will be cheaper than what my friends closer-in pay.

I'm glad to know there are others out there who make things work in order to have kids!

Of course, ordering pizza once in awhile is fine and fun - if you don't already know how to cook well from scratch, in bulk - that will be a massive money saver for you, not to mention, time, sanity, and health. I basically double every recipe I make and stick one in the freezer, assuming it is a freezing-friendly recipe. I've got my slow cooker recipes down to a science.

Food is one of the largest expenses for a family following housing and is one where there is a lot of room for savings depending on how much time and skill you can put into it.

$2k for quality infant daycare doesn't seem very far off to me, so I wouldn't count on that being much lower.

I recommend learning how to make pizza from scratch. I got into when we went through a super belt-tightening phase when DH was between jobs and we had two toddlers. Now, everyone in the house prefers "mom's pizza" to any take out. It's fun and a LOT cheaper. And, I feel good that I'll be sending my kids out into the world prepared to impress future roommates with their pizza making abilities

Trader Joes pizza dough is $1.00 and delicious. 1 jar os their marinara is $1.79 and makes 2-3 pizzas and a bag of cheese is $3. Take out pizza is $15-20. You dont need to know how to cook, but you do need to know the math.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:OP, others have said it already but consider moving elsewhere. We couldn't afford kids in DC despite making a combined $120k. Even then, we'd be scraping by and it wouldn't be the lifestyle I wanted. We moved to Atlanta and have ZERO regrets. We have a big house here, a yard, I'll be able to stay home...granted it's not nearly as interesting of a place to live but you have to sacrifice somewhere.

But didn't you take a huge paycut to move to Atlanta?

Another poster here. I did NOT take a pay cut to move from NY to DC and it has been great. Many times when you DO take a pay cut it is worth it. Our mortgage is less than our rent was in NY and we save over 1k in taxes a month. On top of that we don't pay to garage our car.

You have to take into account the standard of living, not just cost. Fee in atlanta would rent a studio with no laundry or AC. You just don't live like that. Whereas I have friends making 300 plus in NY who do. There are indeed very stark differences between cities and you can get ahead by moving somewhere else. There are many things to consider.

Yeah, for me personally, I couldn't get over the roadblock of living in a hot fiery hot hot hot fucking place. I'd die.

[Anonymous]

Anonymous wrote:

Anonymous wrote:OP again, my mortgage is actually more like 30% take home after taxes, maxing retirement, healthcare, and our car payment (I forgot it automatically goes into a separate credit union account). We barely take any deductions, so we'll be getting around 12k back on taxes this year, so this also lowers our take home pay. We have a 3 bedroom house, outside the beltway in NoVa, that is about 30-40 min. to both our jobs. We stretched a bit to be in a good school district because that was really important to us.

I wasn't trying to stir a debate about my housing. I truly just wanted helpful advice/perspective from other families in the area who make it work with a middle class income.

I love the ideas about toys off Craigslist, signing up for a babysitting sharing service, bulking up on diapers when they are on sale, etc. Also, a lot of PPs have pointed out that weekend activities change once you have kids. I imagine we'll be spending more time at home, ordering pizza, going to the park, etc. as opposed to going to concerts and trying new restaurants. In-home daycare might be worth researching for us or perhaps daycare in the burbs will be cheaper than what my friends closer-in pay.

I'm glad to know there are others out there who make things work in order to have kids!

We have a similar HHI and mortgage (in the suburbs). We're really happy with our 2 yo DS's 1300/mo daycare center. We have one car payment, minimal student loans, and moderate commuting costs. We max out retirement, budget every dollar, and some months we pull from savings for unexpected expenses; our annual bonuses go back to savings to balance that out. Something I want to point about about all the money-saving tips and tricks: you need TIME to use them which - more so than even money - is going to be a precious resource once you have a baby. When you factor in daycare drop-off/pick-up into your commuting time, plus the demands of your career on top of caring for an infant in the evenings, you will need weekends to catch up on household stuff you don't have time for during the week. DCUMs advice on this point is usually "OUTSOURCE", but what if you can't afford that? I don't mean to be doom and gloom, but so often on these boards the question is about finances and the answer comes in the form of a barrage of cost-cutting tips. What you need to examine and prepare for is the affect of having a child on your time to accomplish things in a household where both parents work full-time. Who will be responsible for scouring Craigslist for a bouncer and cutting coupons? Who will organize and schedule doctors appointments, required forms, clothing and supplies for daycare? Who will make sure work clothes get to the dry cleaner and get picked up? You get the idea. We worked up a decent budget and comparison shopped before our baby was born, and we felt financially prepared even though our salaries are on the low average side for the area. Our rude awakening came when we were both exhausted, both had work demands, and both felt the other needed to do more to keep our household up and running. We've worked it out and I can truly say even though our finances are tight, we're happy. But I do wish someone had urged me to do more planning from a time and logistics perspective rather than a financial one.

This may be the best advice I've ever read on DCUM. This is it right here.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:OP, others have said it already but consider moving elsewhere. We couldn't afford kids in DC despite making a combined $120k. Even then, we'd be scraping by and it wouldn't be the lifestyle I wanted. We moved to Atlanta and have ZERO regrets. We have a big house here, a yard, I'll be able to stay home...granted it's not nearly as interesting of a place to live but you have to sacrifice somewhere.

But didn't you take a huge paycut to move to Atlanta?

Another poster here. I did NOT take a pay cut to move from NY to DC and it has been great. Many times when you DO take a pay cut it is worth it. Our mortgage is less than our rent was in NY and we save over 1k in taxes a month. On top of that we don't pay to garage our car.

You have to take into account the standard of living, not just cost. Fee in atlanta would rent a studio with no laundry or AC. You just don't live like that. Whereas I have friends making 300 plus in NY who do. There are indeed very stark differences between cities and you can get ahead by moving somewhere else. There are many things to consider.

Yeah, for me personally, I couldn't get over the roadblock of living in a hot fiery hot hot hot fucking place. I'd die.

Same here. I would rather die - which would be cheaper, ultimately, than living (anywhere).

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:OP, others have said it already but consider moving elsewhere. We couldn't afford kids in DC despite making a combined $120k. Even then, we'd be scraping by and it wouldn't be the lifestyle I wanted. We moved to Atlanta and have ZERO regrets. We have a big house here, a yard, I'll be able to stay home...granted it's not nearly as interesting of a place to live but you have to sacrifice somewhere.

But didn't you take a huge paycut to move to Atlanta?

Another poster here. I did NOT take a pay cut to move from NY to DC and it has been great. Many times when you DO take a pay cut it is worth it. Our mortgage is less than our rent was in NY and we save over 1k in taxes a month. On top of that we don't pay to garage our car.

You have to take into account the standard of living, not just cost. Fee in atlanta would rent a studio with no laundry or AC. You just don't live like that. Whereas I have friends making 300 plus in NY who do. There are indeed very stark differences between cities and you can get ahead by moving somewhere else. There are many things to consider.

Yeah, for me personally, I couldn't get over the roadblock of living in a hot fiery hot hot hot fucking place. I'd die.

Same here. I would rather die - which would be cheaper, ultimately, than living (anywhere).

So you're saying you would rather die than live in DC? I'm confused.

[Anonymous]

Anonymous wrote:You bought too much house. It's that simple . You can justify it any way you want, but that is your major fixed expense and it's going to cause stress and majorly limit you now.
Let's not gloss over that you said you have empty rooms to fill .

A lot of people buy starter houses and then up moving. That's expensive too, so OP may have made a good financial decision. Who knows.

[Anonymous]

Anonymous wrote:

Anonymous wrote:You bought too much house. It's that simple . You can justify it any way you want, but that is your major fixed expense and it's going to cause stress and majorly limit you now.
Let's not gloss over that you said you have empty rooms to fill .

A lot of people buy starter houses and then up moving. That's expensive too, so OP may have made a good financial decision. Who knows.

+1. The transaction costs of buying/selling are really high plus moving expenses.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:You bought too much house. It's that simple . You can justify it any way you want, but that is your major fixed expense and it's going to cause stress and majorly limit you now.
Let's not gloss over that you said you have empty rooms to fill .

A lot of people buy starter houses and then up moving. That's expensive too, so OP may have made a good financial decision. Who knows.

+1. The transaction costs of buying/selling are really high plus moving expenses.

Exactly. A lot of people are buying their first homes in their mid-30s and don't want to buy a small condo that they will quickly outgrow and then maybe break even on buying/selling costs in a few years if they are lucky.

It's funny how if you buy in a bad school zone or farther out, people on this board are snarky about that. If you pay to live in a nice area with good schools, people claim you should be moving to the boonies, the same boonies that the real estate threads claim will get hit by another recession.

You can't win with this board.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote: Also, a lot of PPs have pointed out that weekend activities change once you have kids. I imagine we'll be spending more time at home, ordering pizza, going to the park, etc. as opposed to going to concerts and trying new restaurants. In-home daycare might be worth researching for us or perhaps daycare in the burbs will be cheaper than what my friends closer-in pay.

I'm glad to know there are others out there who make things work in order to have kids!

Of course, ordering pizza once in awhile is fine and fun - if you don't already know how to cook well from scratch, in bulk - that will be a massive money saver for you, not to mention, time, sanity, and health. I basically double every recipe I make and stick one in the freezer, assuming it is a freezing-friendly recipe. I've got my slow cooker recipes down to a science.

Food is one of the largest expenses for a family following housing and is one where there is a lot of room for savings depending on how much time and skill you can put into it.

$2k for quality infant daycare doesn't seem very far off to me, so I wouldn't count on that being much lower.

I recommend learning how to make pizza from scratch. I got into when we went through a super belt-tightening phase when DH was between jobs and we had two toddlers. Now, everyone in the house prefers "mom's pizza" to any take out. It's fun and a LOT cheaper. And, I feel good that I'll be sending my kids out into the world prepared to impress future roommates with their pizza making abilities

Trader Joes pizza dough is $1.00 and delicious. 1 jar os their marinara is $1.79 and makes 2-3 pizzas and a bag of cheese is $3. Take out pizza is $15-20. You dont need to know how to cook, but you do need to know the math.

You're living in a dream world if you think the difference between affording kids or not is giving up takeout.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:OP again, my mortgage is actually more like 30% take home after taxes, maxing retirement, healthcare, and our car payment (I forgot it automatically goes into a separate credit union account). We barely take any deductions, so we'll be getting around 12k back on taxes this year, so this also lowers our take home pay. We have a 3 bedroom house, outside the beltway in NoVa, that is about 30-40 min. to both our jobs. We stretched a bit to be in a good school district because that was really important to us.

I wasn't trying to stir a debate about my housing. I truly just wanted helpful advice/perspective from other families in the area who make it work with a middle class income.

I love the ideas about toys off Craigslist, signing up for a babysitting sharing service, bulking up on diapers when they are on sale, etc. Also, a lot of PPs have pointed out that weekend activities change once you have kids. I imagine we'll be spending more time at home, ordering pizza, going to the park, etc. as opposed to going to concerts and trying new restaurants. In-home daycare might be worth researching for us or perhaps daycare in the burbs will be cheaper than what my friends closer-in pay.

I'm glad to know there are others out there who make things work in order to have kids!

We have a similar HHI and mortgage (in the suburbs). We're really happy with our 2 yo DS's 1300/mo daycare center. We have one car payment, minimal student loans, and moderate commuting costs. We max out retirement, budget every dollar, and some months we pull from savings for unexpected expenses; our annual bonuses go back to savings to balance that out. Something I want to point about about all the money-saving tips and tricks: you need TIME to use them which - more so than even money - is going to be a precious resource once you have a baby. When you factor in daycare drop-off/pick-up into your commuting time, plus the demands of your career on top of caring for an infant in the evenings, you will need weekends to catch up on household stuff you don't have time for during the week. DCUMs advice on this point is usually "OUTSOURCE", but what if you can't afford that? I don't mean to be doom and gloom, but so often on these boards the question is about finances and the answer comes in the form of a barrage of cost-cutting tips. What you need to examine and prepare for is the affect of having a child on your time to accomplish things in a household where both parents work full-time. Who will be responsible for scouring Craigslist for a bouncer and cutting coupons? Who will organize and schedule doctors appointments, required forms, clothing and supplies for daycare? Who will make sure work clothes get to the dry cleaner and get picked up? You get the idea. We worked up a decent budget and comparison shopped before our baby was born, and we felt financially prepared even though our salaries are on the low average side for the area. Our rude awakening came when we were both exhausted, both had work demands, and both felt the other needed to do more to keep our household up and running. We've worked it out and I can truly say even though our finances are tight, we're happy. But I do wish someone had urged me to do more planning from a time and logistics perspective rather than a financial one.

This may be the best advice I've ever read on DCUM. This is it right here.

How does it relate to OP's question?

[Anonymous]

You need to drastically lower your housing costs. Our nanny cost more than our mortgage, and that expense went on for years and years.

[Anonymous]

How much are you putting towards retirement and savings right now? You'll probably need to cut back. Not to mention cutting back on travel, eating out, shopping (although the post-partum body demands new clothes), any house projects that aren't 100% necessary....

You just do make it work. I don't know what else to say. We're in a similar position with #2 on the way.