Sad, just had to cease contributions to my 401K in order to budget in daycare costs for new baby :(

[Anonymous]

Anonymous wrote:I would seriously cut all else from your budget first. Like, no cable, no smartphones, no memberships, no eating out, get movies from the library, etc before cutting retirement. Literally cut everything to the bone.

+1

[Anonymous]

Our fee-based plan was only $700. Shop around.

[Anonymous]

I'm also curious what you could be spending on. At 140,000 you should absolutely be able to do both. We pay $1,600 a month for one kid in daycare, nearly $2,000 for piti, and more than 1500 in student loan repayment on a dual income total of 127,000. We still each save between 7-10% for retirement and put $2,000 a year into 529.

[Anonymous]

Yes we did this, it's normal especially with the over priced costs of daycare and nannies. We were able to save money by finding a Nanny that also cleaned on the weekend.

[Anonymous]

OP, aside from the recommendations on looking for ways to cut expenses, I would suggest you do a quick tax estimate. The contributions to your 401k plan lower your taxable wages so you pay less in income tax. If you drop your contribution you will pay more in taxes. At your combined income level, the dependent care deduction may not be enough of an offset, meaning you may pay more in Federal taxes then if you had kept or lowered your contribution. You do not want to be in a position where you are paying the government instead of yourself.

You may find that you can decrease the amount withheld for taxes when you account for the new dependent, the 401k contribution, and daycare costs.

[Anonymous]

OP, I'm in the same boat. I've been contributing money to my 401K (about $7,200 a year) and also fully funding a Roth IRA ($5,500 a year.) I can't do both, so I'm about to stop or drastically cut back on my 401K. The daycare costs are just really tough to handle on a single salary. Thankfully, I think I'll be able to keep up with my contributions to the Roth.

I know, I know, there are others who would cut back on every other part of life before transferring one dime away from retirement savings. But I don't need to save a million dollars so that I can live in the DC metro area in my old age and travel the world. Hopefully I'll have flexibility to move to a cheaper area and just live a comfortable frugal life. I'm looking at it as a short-term diversion, hopefully it'll be the same for you as well.

[Anonymous]

do either of your companies let you withdraw up to $5,000/year pre-tax for a Dependent Care FSA? If so, that would free up some money. Also, don't forget that there will be tax benefits to having another dependent.

[Anonymous]

Anonymous wrote:I'm also curious what you could be spending on. At 140,000 you should absolutely be able to do both. We pay $1,600 a month for one kid in daycare, nearly $2,000 for piti, and more than 1500 in student loan repayment on a dual income total of 127,000. We still each save between 7-10% for retirement and put $2,000 a year into 529.

OP here, our mortgage is $2,800/mo. We also have a mortgage for land we bought in the mountains back when my husband's business was doing really well, which is another $1,200/mo. I really wish we never bought that, but at least both mortgages will be paid off in 9 years. We have a car payment of $350. Life insurance policies are $160/mo, parking for my work is $290/mo, and DH spends about $500/mo in gas because for work, he drives around all day long, etc.. I feel like when you look at our $140K income, it seems like a lot, but when you take out all the income tax, self employment tax, health insurance, business bonding and insurance, etc. it's whittled down so much.

We never eat out, I think we've eaten out maybe twice in the past year. We haven't gone to the movies in many years. We barely spend anything on "entertainment".

[Anonymous]

Anonymous wrote:do either of your companies let you withdraw up to $5,000/year pre-tax for a Dependent Care FSA? If so, that would free up some money. Also, don't forget that there will be tax benefits to having another dependent.

Yes, I actually do that already

[Anonymous]

Anonymous wrote:

Anonymous wrote:I'm also curious what you could be spending on. At 140,000 you should absolutely be able to do both. We pay $1,600 a month for one kid in daycare, nearly $2,000 for piti, and more than 1500 in student loan repayment on a dual income total of 127,000. We still each save between 7-10% for retirement and put $2,000 a year into 529.

OP here, our mortgage is $2,800/mo. We also have a mortgage for land we bought in the mountains back when my husband's business was doing really well, which is another $1,200/mo. I really wish we never bought that, but at least both mortgages will be paid off in 9 years. We have a car payment of $350. Life insurance policies are $160/mo, parking for my work is $290/mo, and DH spends about $500/mo in gas because for work, he drives around all day long, etc.. I feel like when you look at our $140K income, it seems like a lot, but when you take out all the income tax, self employment tax, health insurance, business bonding and insurance, etc. it's whittled down so much.

We never eat out, I think we've eaten out maybe twice in the past year. We haven't gone to the movies in many years. We barely spend anything on "entertainment".

Woah, 4K a month in mortgages? That is your problem right there.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I'm also curious what you could be spending on. At 140,000 you should absolutely be able to do both. We pay $1,600 a month for one kid in daycare, nearly $2,000 for piti, and more than 1500 in student loan repayment on a dual income total of 127,000. We still each save between 7-10% for retirement and put $2,000 a year into 529.

OP here, our mortgage is $2,800/mo. We also have a mortgage for land we bought in the mountains back when my husband's business was doing really well, which is another $1,200/mo. I really wish we never bought that, but at least both mortgages will be paid off in 9 years. We have a car payment of $350. Life insurance policies are $160/mo, parking for my work is $290/mo, and DH spends about $500/mo in gas because for work, he drives around all day long, etc.. I feel like when you look at our $140K income, it seems like a lot, but when you take out all the income tax, self employment tax, health insurance, business bonding and insurance, etc. it's whittled down so much.

We never eat out, I think we've eaten out maybe twice in the past year. We haven't gone to the movies in many years. We barely spend anything on "entertainment".

Woah, 4K a month in mortgages? That is your problem right there.

Yeah, I know. If I could go back in time....

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I'm also curious what you could be spending on. At 140,000 you should absolutely be able to do both. We pay $1,600 a month for one kid in daycare, nearly $2,000 for piti, and more than 1500 in student loan repayment on a dual income total of 127,000. We still each save between 7-10% for retirement and put $2,000 a year into 529.

OP here, our mortgage is $2,800/mo. We also have a mortgage for land we bought in the mountains back when my husband's business was doing really well, which is another $1,200/mo. I really wish we never bought that, but at least both mortgages will be paid off in 9 years. We have a car payment of $350. Life insurance policies are $160/mo, parking for my work is $290/mo, and DH spends about $500/mo in gas because for work, he drives around all day long, etc.. I feel like when you look at our $140K income, it seems like a lot, but when you take out all the income tax, self employment tax, health insurance, business bonding and insurance, etc. it's whittled down so much.

We never eat out, I think we've eaten out maybe twice in the past year. We haven't gone to the movies in many years. We barely spend anything on "entertainment".

Woah, 4K a month in mortgages? That is your problem right there.

Yeah, I know. If I could go back in time....

if you only have 9 years left to pay - it might make sense to refi at least primary residence. Yes, it will increase the length of the loan, but might help you with cash flow by lowering monthly payments.

[Anonymous]

Sell the land in the mountains.

[Anonymous]

Anonymous wrote:Sell the land in the mountains.

+1

[Anonymous]

Anonymous wrote:

Anonymous wrote:Sell the land in the mountains.

+1

We've looked into it, but we are pretty upside down on it, unfortunately