Financially maxed-out with young kids - did it get better for you?

[Anonymous]

We've got two kids in daycare and a reasonable mortgage, and I feel like we just can't get ahead financially. We don't spend more than we make (and don't spend lavishly at all), but aren't really saving anything either (aside from retirement, which we max out). I'm wondering if others have felt similarly at this stage in their lives, but eventually were able to get ahead?

We're in our early/mid 30s and pretty well-established in our careers, but with room for growth. No immediate big raises on the horizon though.

Not being able to save more is really bothering me, but maybe that's just what this stage is like and things will get better? When I look back at our parents, that was certainly the case (modest incomes with a young family, much better off by the time we were in college) but maybe that's not a typical trajectory anymore.

The only real fix I see in the short-term is looking for a better paying FT job, but that would most likely mean giving up my flexible schedule and WAH arrangement, and I'm really hesitant to do so now, or even (or especially) later when the kids are in school. If that's what I need to do for us to be financially sound, I'd do it, but if it's just a matter of weathering these early years, I'd rather we just push through.

So - did things get better for you? I see people post on here all the time that they didn't really see any savings when their kids entered public school (I find that a little hard to believe), but regardless of that, ten or twenty years out from having kids, are you doing better financially than in the early years?

[Anonymous]

I think to be maxing out your retirement in your early 30s is a great place to be. I'm not in your situation (we have 2 in daycare, but from reading your post things are not as tight for us), but I do think you are doing things right and that it will get easier. I expect to have more disposable income/savings once my DD starts school in September. We will still pay for aftercare and at some point will likely add some additional activities, but I do not expect it to compare to the cost of daycare for 2. My husband is pretty close to maxed in his career, but I have lots of room for growth.

Do you have a emergency fund? Do you already save for college? If you don't have these, then I might suggest figuring out how to get them started - changing employers, additional credentials, second job.

[Anonymous]

It all depends on your lifestyle. I have three kids, so I never really saw a change in the daycare costs until the third hit elementary and the first hit high school - which was the same year. By that time, there were kids' activities, huge grocery bills (think four times when you were just a couple) when your kids hit teenage years, bigger cars, tutoring if anyone struggles in school, electronics, pool memberships, more expensive clothes, entertainment, better vacations, pets, etc. Thing is, other than food, none of this is a necessity. But they are the type of things many of us want to give our kids. If anything, I would say my life has become more expensive, because we didn't do classes or go out much when they were little.

[Anonymous]

God I hope it gets better. We spend nearly $50,000 a year between nanny and daycare. I cant wait for the kids to be in school. $5000 for some summer camp sounds great.

[Anonymous]

OP, we are with you. As our youngest has gotten older, and daycare costs have gotten less, it has gotten less expensive. However our 5 year goal is to pay off our student loans- which to us is very important to get out of the way... so once DC enters elementary school in approx 2 years it will help- though we'll keep it tight until we get those loans paid off.

[Anonymous]

Kids never really get much cheaper (activities can cost as much as daycare), but life does get easier financially over time. You start seeing your money appreciating in your 401K. Little by little you pay off debts and have more cash left over (be sure not to spend it all!). You build a little bit of an emergency fund so you don't have to freak every time your car breaks down. I am definitely in a better place than I was 9 years ago when my son was born. No car loan, no student loan debt, 6-mo emergency fund, some equity in the two houses, 2 years of state college paid for, and several hundred K in a retirement plan. Not to mention furniture!!! Hang in there!

[Anonymous]

I keep hearing that kids don't get much cheaper, and activities cost as much as daycare, but I just can't believe it's true. Our "cheap" daycare is $1550/month, per child. There's no way activities could possibly cost that much, could they?

[Anonymous]

We are in the same boat, and I do not think maxing out one's retirement is enough. We are trying to invest on our own too.

There will probably be some improvement financially down the road, but don't count on a lot, because older children "need" (ie, we like to give them) educational trips, basic electronics, some brand-name clothes, some tutoring, extra-curriculars etc. And food! It all adds up in a most spectacular manner!

So keep living frugally. Once you know you are truly well fitted out for retirement, then you can relax a little bit.

[Anonymous]

We spent about $1400 a month on daycare and once our singleton got out we immediately were able to save at least $1000 of that. Summer camp can be $3-4k, and outside activities can be $1-2k but once we didn't to have pay daycare finances got so much better.

[Anonymous]

Anonymous wrote:I keep hearing that kids don't get much cheaper, and activities cost as much as daycare, but I just can't believe it's true. Our "cheap" daycare is $1550/month, per child. There's no way activities could possibly cost that much, could they?

Competitive sports - club membership, travel, hotels,equipment - can easily run 12K/yr. Throw in a tutor or two, some music classes, and summer camps, and you are there just about.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I keep hearing that kids don't get much cheaper, and activities cost as much as daycare, but I just can't believe it's true. Our "cheap" daycare is $1550/month, per child. There's no way activities could possibly cost that much, could they?

Competitive sports - club membership, travel, hotels,equipment - can easily run 12K/yr. Throw in a tutor or two, some music classes, and summer camps, and you are there just about.

I hope my kid has no athletic ability.

[Anonymous]

If you are SAVING for retirement, then you are SAVING idiot. Make a choice- save for retirement which you might not be alive to see, save that money where you can access it should your roof fall down or for your likely job loss, or figure out how to do both. It is not that difficult unless you are making $25k. If so, my apologies.

[Anonymous]

PP 23:29--can you explain, your post makes little sense to me. My TSP has been growing at a rate about 12-13% since 2009 or so (after the crash--so maybe it was later). Please find me another savings vehicle that can provide that sort of return.

OP--we are right there with you. When #2 is born, we'll be living paycheck. I intend to keep up with our agressive savings (emergency fund) but I worry that I won't be able to do that... Btw 2 kids, we are looking at about $35K or so in daycare costs.

[Anonymous]

Anonymous wrote:God I hope it gets better. We spend nearly $50,000 a year between nanny and daycare. I cant wait for the kids to be in school. $5000 for some summer camp sounds great.

+1 same here