We are adding a child to our family unexpectedly…how to budget

[Anonymous]

Anonymous wrote:Our current HHI is 280k. 200 DH and 80 Me. We have learned recently that we will have the honor of taking in my nephew. One of his parents passed away 5 years ago via addiction and one is now serving a long prison sentence. He happily has been staying with my in laws but now that we see his Dad will be away for a decade we have decided its best to make his permanent home with us. I am going to drop down to part time in September. I know this is the correct thing for my own kids and my newest son. Everyone will have a lot of adjustments and I want to be here as much as possible. Nephew left last school year in turmoil and we are starting a new school this year for him and I expect it will be a bumpy transition. I also want to keep my own kids lives "normal" and be able to do their ballet, piano and soccer schedules as well as help them adjust. This is going to be quite a strain on us financially. Our whole lives we have planned around 2 kids and now DH is worried about how we will catch up nephews college fund and emerge him into our lifestyle. He is is strongly focused on making sure he is treated exactly as our children and he is very worried that a.) he won't be able to offer him the kind of life our kids have or b.) all of us take a lifestyle adjustment and start living as a family of 5. I think b is the correct answer but it will take some tweaking. Right now we are going to make 36 k less and have about 20k more in expenses. (This figure comes from new insurance plan, some legal adoption paperwork, adding one more kid to aftercare, his out of pocket therapies, and putting the same amount of money aside for his extra curriculars as we do our other kids.)

Some ideas we have done immediately:

1.) Dropped cable, lawn service and have started grooming our own dog. Poor dog looks like shit right now but I will get better at it…I have watched a lot of youtube! Home hair cuts for DH and son (DD and I will stretch ours house and just go to a cheapo place), really really kept an eye on grocery budget.
2.) Shopped around for better deals on car and home insurance. Saved about 380 just making some calls.
3.) DH is gonna drop his phone our family plan and just use work phone.
4.) I dropped my gym membership. I can workout outside for another few months and can reevaluate this winter.

Some bigger cuts we MAY do:

1.) My dad left us a lake house on Kelleys Island (a small island in Ohio) and we currently rent it and also enjoy it. We break even after taxes. We could skip "our weeks" and replace those weeks with renters. That would give us about 4k a year.
2.) We have about 600k equity in our house. We could sell for about 950k. We could downsize within our school district if needed.
3.) We could go to court and ask for what little assets my brother in law has be turned over to us. I dont know if thats worth it.


Has anyone taken in a child unexpectedly or had a similar lifestyle adjustment? Welcome to all ideas.

at your income, these little changes are not going to help. You will simply replace those with some other form of discretionary spending. Look into investing and using your assets to your advantage.

Your nephew is only 5 so you don't need to panic with college savings. Start where you are today. Create the college fund and add to it a normal amount per month. If you don't intend to formally adopt, but will do a kinship foster placement, know that children in foster care in some states qualify for free college. Adoption vs. long term foster care is a personal family decision. Both can be appropriate, it just depends on the situation.

[Anonymous]

Anonymous wrote:

Anonymous wrote:If you have HHI of $280k and a mortgage of only around $350k, you are spending money like crazy on a lot of things that are a lot more expensive than dog grooming.

Bless you for your act of kindness towards your nephew, but from a financial standpoint, something is really out of whack if you can't swing this.

That's really not how mortgages work, you know that right PP? OP has paid it down to $350k, that doesn't mean it was initially $350k or that the payments are the same as they would be on a $350k mortgage.

Gee, thanks for that newsflash. Yes, I know that a payment on an aged mortgage with a $350k balance is not the same as a payment on a new $350k mortgage. Nonetheless, no one today should have a mortgage much older than around 5 years old since everyone should have refinanced when rates were at their lowest. Just pick a round number and say the OP refinanced $500k five years ago at 4%, the payment would be a whopping $2,400. With monthly income of around $23,000, that's not where the money is bleeding.

[Anonymous]

Your attitude seems good and your sentiments are touching.

A few things:

How old are your 2 children? If old enough, make sure they do not feel that this child has caused them to do more stuff like mow the lawn or take more care of the dog.

College funds? Just move stuff around or stop contributing to DCs 1 and 2 until it catches up. You have to. You can do this.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:If you have HHI of $280k and a mortgage of only around $350k, you are spending money like crazy on a lot of things that are a lot more expensive than dog grooming.

Bless you for your act of kindness towards your nephew, but from a financial standpoint, something is really out of whack if you can't swing this.

That's really not how mortgages work, you know that right PP? OP has paid it down to $350k, that doesn't mean it was initially $350k or that the payments are the same as they would be on a $350k mortgage.

Gee, thanks for that newsflash. Yes, I know that a payment on an aged mortgage with a $350k balance is not the same as a payment on a new $350k mortgage. Nonetheless, no one today should have a mortgage much older than around 5 years old since everyone should have refinanced when rates were at their lowest. Just pick a round number and say the OP refinanced $500k five years ago at 4%, the payment would be a whopping $2,400. With monthly income of around $23,000, that's not where the money is bleeding.

[Anonymous]

Anonymous wrote:

Your point?

[Anonymous]

Agree with others - only do part time for a short while, then go back to work.

I would also catch up your nephew's 529, and plan to eventually have the same amount for everyone. The other items though seem like they wont help much, and serve to reduce stress.

For the gym, join the public rec centers - way cheaper. Keep your phone plan - using a work phone for personal business is not a good idea.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Your point?

First of all, if you thought she had a $500k mortgage you would have said that, not $350. You just screwed up. Then you tried to cover your screw up by saying "well OP provided numbers but I invented other numbers in my head based on nothing and substituted those, and my numbers prove that OP and anyone who didn't invent numbers is an idiot!"

So again:

[Anonymous]

Op here. I want to point out that of course I know we can handle it BUT its also something we hadn't planned and want to take on these costs consciously and responsibility. My kids are 5 and 7 and my nephew is 10. They will all need aftercare because my hours will be 1 to 5 daily. (Thats the only option they gave me and I jumped at it). My nephew plays some sports but sporadically because he never really had anyone to consistently take him anywhere. We would love to get him into any kind of sport or program where he feels a community and can make friends. We really are excited to have him but Im keeping in my my other kids might need some family therapy and we might all acquire random "transitional" expenses I can't even predict yet. Thanks for all the replies!

[Anonymous]

Anonymous wrote:Op here. I want to point out that of course I know we can handle it BUT its also something we hadn't planned and want to take on these costs consciously and responsibility. My kids are 5 and 7 and my nephew is 10. They will all need aftercare because my hours will be 1 to 5 daily. (Thats the only option they gave me and I jumped at it). My nephew plays some sports but sporadically because he never really had anyone to consistently take him anywhere. We would love to get him into any kind of sport or program where he feels a community and can make friends. We really are excited to have him but Im keeping in my my other kids might need some family therapy and we might all acquire random "transitional" expenses I can't even predict yet. Thanks for all the replies!

I am not understanding.. you took a part time job of 1-5pm to spend time with your kids but all the kids will be in elementary school, and then aftercare on top of that? You are spending less time with them and spending more money, while cutting your pay.

[Anonymous]

we might all acquire random "transitional" expenses I can't even predict yet.

The transitional expenses we had were furniture for the bedroom, clothes, a bike, some toys (my kids were younger). A few years later, we had some tutoring expenses because my son was behind in some subjects. That wasn't right away because we didn't have a good handle on his abilities versus performance. We didn't have any therapy expenses.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Your point?

First of all, if you thought she had a $500k mortgage you would have said that, not $350. You just screwed up. Then you tried to cover your screw up by saying "well OP provided numbers but I invented other numbers in my head based on nothing and substituted those, and my numbers prove that OP and anyone who didn't invent numbers is an idiot!"

So again:

Reading comprehension - OP said she had $600k home equity in a home she could sell for $950K, so yes, she has a mortgage balance of $350k. A PP pointed out that doesn't mean that her payment is what one would think of when they think of a brand new $350k mortgage (which would be about $1,700). Fair enough. Since we don't know any more details than that, yes, I speculated that the OP's original mortgage balance was somewhere between $350k (today's balance) and $760k (about 80% of what her home is worth). I also speculated that her mortgage couldn't be more than around 5 years old, since in the 2012/2013 timeframe, mortgage rates were at their lowest in over 50 years, and anyone with a mortgage and half a brain should have refinanced to a sub-4% rate. So, the payment on a $500k mortgage at 4% is around $2,400, which on a household income of over $23,000 a month, is not the problem.

Keep up. This is the finance forum.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Op here. I want to point out that of course I know we can handle it BUT its also something we hadn't planned and want to take on these costs consciously and responsibility. My kids are 5 and 7 and my nephew is 10. They will all need aftercare because my hours will be 1 to 5 daily. (Thats the only option they gave me and I jumped at it). My nephew plays some sports but sporadically because he never really had anyone to consistently take him anywhere. We would love to get him into any kind of sport or program where he feels a community and can make friends. We really are excited to have him but Im keeping in my my other kids might need some family therapy and we might all acquire random "transitional" expenses I can't even predict yet. Thanks for all the replies!

I am not understanding.. you took a part time job of 1-5pm to spend time with your kids but all the kids will be in elementary school, and then aftercare on top of that? You are spending less time with them and spending more money, while cutting your pay.

Well its not quite that easy. We have so many court dates, therapy appointments and social worker meetings that having a block of the week day I can do all these things is VERY helpful. I would be taking off so much PTO without it.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Op here. I want to point out that of course I know we can handle it BUT its also something we hadn't planned and want to take on these costs consciously and responsibility. My kids are 5 and 7 and my nephew is 10. They will all need aftercare because my hours will be 1 to 5 daily. (Thats the only option they gave me and I jumped at it). My nephew plays some sports but sporadically because he never really had anyone to consistently take him anywhere. We would love to get him into any kind of sport or program where he feels a community and can make friends. We really are excited to have him but Im keeping in my my other kids might need some family therapy and we might all acquire random "transitional" expenses I can't even predict yet. Thanks for all the replies!

I am not understanding.. you took a part time job of 1-5pm to spend time with your kids but all the kids will be in elementary school, and then aftercare on top of that? You are spending less time with them and spending more money, while cutting your pay.

Well its not quite that easy. We have so many court dates, therapy appointments and social worker meetings that having a block of the week day I can do all these things is VERY helpful. I would be taking off so much PTO without it.

Sorry his submit too soon. Plus I will be able to take nephew to school and do the whole morning routine with all my kids.

[Anonymous]

OP, God bless you and your husband.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Your point?

First of all, if you thought she had a $500k mortgage you would have said that, not $350. You just screwed up. Then you tried to cover your screw up by saying "well OP provided numbers but I invented other numbers in my head based on nothing and substituted those, and my numbers prove that OP and anyone who didn't invent numbers is an idiot!"

So again:

Reading comprehension - OP said she had $600k home equity in a home she could sell for $950K, so yes, she has a mortgage balance of $350k. A PP pointed out that doesn't mean that her payment is what one would think of when they think of a brand new $350k mortgage (which would be about $1,700). Fair enough. Since we don't know any more details than that, yes, I speculated that the OP's original mortgage balance was somewhere between $350k (today's balance) and $760k (about 80% of what her home is worth). I also speculated that her mortgage couldn't be more than around 5 years old, since in the 2012/2013 timeframe, mortgage rates were at their lowest in over 50 years, and anyone with a mortgage and half a brain should have refinanced to a sub-4% rate. So, the payment on a $500k mortgage at 4% is around $2,400, which on a household income of over $23,000 a month, is not the problem.

Keep up. This is the finance forum.

LOL the irony of telling me to "keep up" when I'm the PP who pointed out to you that you don't know how mortgages work. You made up numbers in your head, but accidentally said the wrong number (you didn't say balance, you said "mortgage of $350k," and then truncated the quote so you could pretend you didn't misread) and are now digging your heels in in a way that makes you look even dumber. "Reading comprehension," indeed.