Am I crazy to worry? Is my hope that expenses drop when the kids hit school a pipedream?
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Anonymous
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I don't know how I stress about money, and I'm sure I'll get some flack here... But am looking for guidance on whether I'm insane or if my doubts have any validity. Basically, we make a decent income but our expenses seem so high I'm not sure we save enough, and I'm kind of hoping that this will improve when the kids hit school...Some parents seem to laugh at this suggestion...???
Question for other parents: will my expenses really go down once our kids are school age? (we plan public).... What do you do? Right now we pay 3,800 a month for nanny plus some play based programs. My hope is that we can cut that in half or better once we only need a nanny for a few hours a day (as opposed to 10+ a day)... Is this an unreasonable hope? (My goal is a net worth increase of $100k a year. This year we hit 78k. Without the absurd nanny costs, I'd have crossed the mark) We live pretty frugally otherwise... two cars paid off, I max my 401k, as does my wife, we save about $1,200 a month into an emergency oh-shit-the-kids-took-a-hammer-to-the-couch fund. I've cut cable, cut cell phone, say yes to any business trip offered (miles, free food, etc), we don't touch annual bonuses, I game the hell out of offers when they get high enough (ie British airways offered round trip business class tickets for 2 to south America last year, for what amounted to $95 plus taxes), we only travel to family vacation homes, or use Starwood points, etc, and yet it feels like its not enough. Requisite statement: yes I know I'm well off compared to many people, but still feel pressure to save. Age: early 30s HHI: 260k ish Mortgage: 350 on 900k, rest equity Retirement funds: 500k ish |
Anonymous
| My expenses went down tremendously this year thanks to free PreK3. Ex and I have schedules which enable us to avoid before and after care so I pay zero costs for child care. Also, DC wears uniforms so I'm paying less for clothing. We do alot of free activities. I don't intend to enroll DC into extracurriculur activities until next year, but it wont cost us much. |
Anonymous
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You'll get some people posting that say their expenses don't go down because now they are paying for extra curricular activities.
Don't believe them. Yes, you CAN spend thousands on this kind of stuff, but you don't have to. You also aren't condemning your child to a life as a bored shut-in. There are plenty of reasonably priced rec leagues, clubs, etc. Your kid might not be signed up for as many things as some other kids in school, but they will be just fine. |
Anonymous
| What is it exactly that you're worried about? You're saving a LOT of money, and your expense sound reasonable for your income level. Is it retirement? College? More debt somewhere? |
Anonymous
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What a great dad - spends so little for himself and saves every penny so his kids can have a life after they inherit this fortune.
OP, were your parents in a big financial trouble and that makes you save so much in order not to repeat their experience? |
Anonymous
No other debts. School loans are gone thankfully. It's both retirement and college I guess. We did 26,000 per kid at birth in 529 plans to kick them off, but if you believe projections by the time they hit college I'll need 100,000 a year PER kid. I find it hard to imagine that's sustainable - the ROI would be negative for almost any job - but who knows. I'm not opposed to the kids taking on a little debt (in fact I'd argue they should) but I don't want to saddle them with hundreds for some run of the mill bachelors. Id also like to be able to leave my kids something when I go - something more than an empty house they get to sell at some estate sale... Ideally, I'd like to be alive to see the benefits of my savings put to good use. Maybe a downpayment on their first home, or a trip around the world (something I'd kill to do), etc. I'm not talking about buying my kids a BMW at 16 ( I shake my head at parents that somehow think that's reasonable)... just would love to put my money to good use to afford them education, travel/a few life experiences and a little help here or there. As for retirement, that's equally worrisome to me. Even if I hit my rather lofty goal of 100k a year, it still feels short. I won't have a pension, have zero belief that social security will be there for my retirement, etc. I guess I just want to be able to retire and enjoy life. I want to be able to travel, go to dinner on a whim (instead of worrying about the cost) and just watch sunsets in peace with my wife. I don't know what that means I need - $2 mill? $5m? Basically, I want my kids to have something and I want something for retirement. Achieving both feels daunting. |
Anonymous
| Get thee to a fee only certified financial advisor. |
Anonymous
| Two of my three kids started kindergarten this year. The costs of daycare was $450 a week for those two. They are in sacc for before and after school which is $895 a month. So it's more than a 50% saving in child care. They also have school lunches vs included lunches and many more expenses in activities, but those don't add up to close to the difference between daycare and sacc. The one thing to remember is the costs of care in the summer is not cheaper, so the savings are only during the school year. |
Anonymous
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My income is 78k
Retirement fund is 20k upside down on our townhome mortgage also 1 car paid off, no student loans. Savings of $750 and credit card debt of $30k Yes, child care cost goes down once the kids start school, but after care is still expensive, and summer camp costs a fortune. Are your kids healthy? |
Anonymous
| Can you explain hoe you saved 78k this year? did you max out 401k= 34k for 2 of you? Did you put away 6k monthly? |
Anonymous
How is your PreK free? |
Anonymous
I should clarify. I didn't "save" 78k. My net worth increased 78k. I tend to always look at net worth as I know a lot of people who "save" $2,000 a month but are also sitting on 600,000 mortgages and new car leases every 2 years etc. Just feels like the wrong way to look at it. Plus, by looking at the net figure I can pat myself on the back equally for debt reduction. So... Two 401ks were 34k, plus about 10k in matches added to 44. The balance was gains in existing accounts and reduction in existing debt (namely dutifully paying my mortgage). The extra $1,200 we were saving this year got burned up by some irritating home issues that cost us a pretty penny. I'm up for promtion this year which should add maybe 20k to 40k to my bottom line... but I'm not counting my chickens before they hatch. |
Anonymous
| To answer your question, yes, you are crazy about money. And I'm a crazy frugal type myself. |
Anonymous
| Look, OP, I'm not really interested enough in your finances to follow the exact amount of dollars you have described for your various expenditures, but I can tell you one thing from giving it a rough eyeball - you make enough to afford to consult with a financial advisor, which is what you should do. |
Anonymous
| Op, you're doing pretty well. It's good to set ambitious goals re savings, and great that you want to do so much for your kids, but you probably should relax a little and stop worrying so much. Keep doing what you're doing, spend quality time with your kids, take a deep breath and try not to get too caught up with anxiety. Good luck. |