Would you take on this daycare expense?

[Anonymous]

We love the daycare we're currently using for our toddler and would like to have our new baby go there as well, but the monthly cost for both would be $2,400. Our current monthly take home is around $7,800 (after deductions for retirement, health insurance, FSAs, etc.) and our mortgage is $2,060/mo. Student loan payment is $238/mo. By my calculations, that leaves roughly $3,100/mo for food, clothing, utilities and everything else (no car payment) which feels very tight to me but I'll admit that I've never had a budget before and am not used to living frugally.

With all that said, I'm seeking your advice. Would you take on this kind of budget for 2 adults and 2 young kids or would you try to find a less expensive daycare? Anyone else here currently living on a similar budget? Any and all tips from experienced belt-tighteners would be appreciated.

[Anonymous]

What do you have in savings?
How old is the toddler? Do you live in DC and have the option of doing PS3?
If short term (like one year) I might do it, depending on your savings situation.

[Anonymous]

Considering our monthly day care cost for two is around $4K, that sounds pretty good to me. We have comparable costs -- our mortgage is about $3K and our monthly take-home is a couple thousand more than yours, in part because we've scaled way back on retirement contributions during these couple years when we have two in day care. (Just doing the minimum for the match in my husband's 401k account, and none in mine since my employer doesn't match. Haven't done any IRAs in the last couple years.) We'll go back to retirement savings once the older kid is in public school next year.

[Anonymous]

I agree that $2400 is on the cheap side of things. What is your other option? It would have been possible to have them 5 years apart to only have one daycare bill.

[Anonymous]

If you have good childcare, count your blessings.
Most children don't.

[Anonymous]

If you have a spare bedroom, you could host an au pair. Made finacial sense for this family. We got sticker shock for daycare for two kids. At least try it for a year or 2 until you get to free kindergarten (if in DC). Good luck.

[Anonymous]

There are not many quality options out there that are going to cost less than 2400 for 2 kids. Some home day cares are less, but it might be hard to find one that will provide enough stimulation once your toddler gets a little older and into the preschool years.

I've been on a similar budget but have never regretted spending on quality daycare for my 2. There are other ways to save money.

[Anonymous]

Definitely stick with the care you have. If you live anywhere close to DC, you won't find it much cheaper for two. Like another PP mentioned, reduce some other expenses for the year or so that you have two in childcare. It's just temporary pain for long-term gain.

[Anonymous]

I'd be okay with it, knowing it's somewhat temporary, and I'm what many on this board would consider pretty conservative.

[Anonymous]

We have slightly higher net income (though we don't max out retirement), and have 3 in daycare at a cost of $4500 a month. We do live frugally, but the daycare cost is an enormous burden. We investigated other more affordable options, but could not find something close to our home that we could be comfortable with. I am thankful every day that we can come up with the money to pay for childcare that we are comfortable with.

[Anonymous]

This is the OP. We're in Fairfax County, so no PS3 but on the bright side, quality daycare is a bit less expensive than in the District. Our toddler is 2, which means we'll need to live with this for the next 3.5 years until she's old enough for kindergarten. We're in our early 40s (struggled with many years of infertility) so, unfortunately, there was no option to space them out more by waiting longer for #2.

Retirement savings are in good shape. We're considering cutting back on our withholding for a few years. Our regular savings account has less cushion than I'd prefer but we're a dual-Fed family, so our job security is probably better than most. We also just withdrew $11,000 to pay off our car.

Any other tips from those who are living within a similar budget? How did you make it work?

[Anonymous]

Your child care expenses are very reasonable.

[Anonymous]

I think that is about normal.

[Anonymous]

You're maxing out your childcare FSA, right? Does your take home amount take into account the $416 per month you get refunded to you through the FSA?

We are scaling back on my retirement (from the max to the match), we eat at home a lot more, I buy fewer clothes (I used to be a clothes horse). I clean my own house (yes, even though I work FT). We dropped my gym membership and I run with the jogging stroller.

It's tight, but it's temporary.

[Anonymous]

Oh, and 912 again--I agree that you have reasonable childcare costs.