Lack of money today
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Anonymous
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DH and I just bought a house. We bought it knowing that in 2 years, his youngest from his previous marriage would be 18 and CS would end. While not the ideal timing, we wanted to buy into the neighborhood that our kids would be attending school and our oldest was ready to start K last fall.
While 24 months is not a long time, it is when money is tight. We can make the monthly bills but there is no money for extras--like haircuts for the little kids or the ability to take them out for ice cream. We get hit with one little extra bill and the whole house of cards comes tumbling down for the month. I have some options that can fix this so I'm wondering what to do. Option 1--sell stock options--I can sell enough to pay for daycare tuition for our youngest through next July--basically cover all of next year since the year runs Aug - July. That would free up $1500/per month. There is enough in the option pot to do this for the remaining 2 years. Option 2--in mid Oct, DH gets his bonus check. There is a 60-40 (our favor) chance that his bonus will be $25K more than we anticipate. I could hang on as is for the next 4 months and then if it happens, use the bonus to pay for the remainder of daycare and if it doesn't, revert back to Option 1. Option 3--we've been living like this for a year already. Just keep plugging along and count down the months. |
Anonymous
| Option 2. |
Anonymous
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Being house poor sucks.
And serious question, while his formal child support obligations end, will his financial contributions to his first child really abate? |
Anonymous
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Option 3. Living within your meetings while holding on to investments will pay off many times over.
I understand about wanting those little treats. Free up money by trimming elsewhere (rice and beans for several dinners - a few extra dollars for a half-gal carton of ice cream on sale). Your children are so young - enjoy this time when you're not having to buy them the latest brand name whatever! |
Anonymous
Yes it does!!!! Why once CS ends would his financial contributions still continue? His oldest is currently in college and he pays for that. When CS for the youngest ends, he is planning to pay for her college as well. We have told both children that when they graduate if they are unable to find employment that allows them to live on their own (with or without roomates), they are welcome to live with us. However, beyond providing food and shelter for an additional mouth, what other obligations would he have to a college graduate without a job? |
Anonymous
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it sounds like you can't afford your house without some disciplined budgeting and a decent financial plan for the next 5 years.
You say after CS ends you will have decent $$, but will your DH support that child in college or pay toward that at all? That could be a hefty chunk of change if you don't have it all saved up. Also two years is a long time to wait. You sound like you don't have a good family budget. Also if you get bonuses that big, you should be planning better how to use them. I would go to to a fee-only financial planner: www. napfa.org |
Anonymous
| Option 3. |
Anonymous
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Definitely option 3. But I had same question as PP - will your husband be helping with college tuition and expenses?
Whatever you decide, hang in there. Two years (if no college payments) will be over in no time. The days are long but the years are short. |
Anonymous
Yes, DH currently pays for the oldest who is currently in college and will be for the next 3 years. And then is planning to pay for his youngest to attend college. That money is already accounted for. |
Anonymous
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I just reviewed the monthly budget. We are currently putting $1500/month into our retirement fund (outside of both of our employer 401Ks) and $1250/month into the little kids college funds. Can I steal money from those investments for 2 years?
I did laugh when I saw we are putting in $1500/month for retirement and that's exactly the amount I'm look for by selling the stock options. In that case, if I sell the options, I'm just replacing one investment with another. |
Anonymous
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Not a good plan to count chickens before they hatched...
it seems you did not account for emergencies...or if anyone lost their jobs... Can u sell ur house? |
Anonymous
We could sell the house, but why? If I lost my job, daycare would no longer be an issue. If DH lost his job, we would have to dip into the emergency account. There is about $350K in the emergency fund that is liquid. |
Anonymous
| I bought the house I have knowing things would be tight until DC entered public school. It was a one year window of "tight budget" and I agree - one little thing can throw the budget off completely. And one little thing seems to happen every month!! Hang in there - you will make it. |
Anonymous
if you have $350,00 in liquid assets in an emergency fund...then money really is not tight...u have something to pull for the expenses you say you are not sure how to cover over the next few months...or do u need $350,000 to cover 6 months of expenses in case of an emergency....?? |
Anonymous
| I think it depends on where the stock options fit in your overall investment plan. If you are heavily weighted towards company stock it might be a good idea to sell the options regardless of whether you reinvest the money in other stocks or use it to pay for childcare. |