Budget to Transition to SAHP

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Wait, you have $250,000 in cash savings? Pay down the mortgage and refinance.

Why would we do this? We have 3.85% interest rate which is tax deductible. I am earning 2.2% on the CD it is in and it provides us enormous flexibility (like considering to stay home and use it as cushion, hence why we haven't plowed it into stocks or investment property).

If we paid down mortgage and refinanced, we might push down our mortgage to the $2700 I looked at earlier, but that is still unworkable. Being able to paydown the house so we have a $230k mortgage is beyond the means and two bedroom condos in our neighborhood go for $700k (our TH is $850k).

Moving seems like the only way; so for everyone SAH on $100k incomes, you live out in exurbs in sub-$400k houses?

So to answer your question here, we live in the city, in a house, in a very nice neighborhod, a few minutes walk from a metro, primarily on my husband's 75k salary. It is very doable, but not with your current expenses and it doesn't seem like you're willing or able to make the more drastic changes that would make this a good decision for you. We max out TSP and roths for each of us, go on several vacations per year, eat organic foods and still save additional each month. To make this work we live VERY frugally otherwise and earn extra income in other ways like me babysitting, dog walking, renting out a room in our house etc. You have to pick and choose what means the most to you and it sounds like your house means the most.

We cannot buy in our area (well its possibke, but we couldn't get anything nearly as nice as what we have). Meanwhile rent prices have not kept up with housing prices here and we found an especially affordable home that costs less than half what you pay per month. If you look at the rent vs buy calculators for houses in our area, they will tell you that with that large of a discrepancy in rent v buying prices, it is a better investment to rent and invest the difference in an index fund. You could lose the second salary, but you have to really think outside the box and make those big changes you consider off the table.

We rented for a long long time, and only bought when buying was cheaper month-to-month then renting (in close in suburbs with good schools, two bedroom apartments now cost more than the mortgage on a small TH, b/c of low rates and escalating rents). trust us, we were a family of 4 living in close-in suburbs in a two bedroom. the rent for an ok apartment (i know kind of fancy b/c we are looking for a/c and washer dryer in the unit), the rent is going to be $3k/month which after tax deduction is our about our PITI. i would make about $15k too much to qualify for affordable housing, so we would into the income range that ends up moving to burke i guess.

we *only* care about the 'house' as a means to a) freeze our monthly housing cost and b) provide stability to same in the same good school district. it is not fancy, and is in a shady part of a good school district (what other DCUM have called this neighborhood). we are reluctant to change schools b/c DC is doing great at her current school and education is one of our top priorities, period. what do you do for schools in DC? I'm guessing a charter? basically if you win the charter lottery, that is like winning the lottery -- you can move wily-nily and live where rent is cheap and not worry about the schools. we should have taken that plunge i guess, but taking the charter gamble now would be very difficult.

will look at housing options at burke or rockville; but DW is reluctant to change schools; for both of us it is what we feel is best for kids and unsure if losing a school, neighborhood, and friends they love is worth having a parent at home and seeing the other parent far far less b/c of commute etc.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:The DW needs a weekend job of some sort. Some sort of income to pay for extras. She could avoid a 50 hour work week.

Another option is to spend 60k of your savings. At the end of the day, thsys what savings is for. What is 200k in a low rate CD going to do for your anyway? Just make sure you have enough for a year of living exoe ses if the dh loses his job. Allocate 1k a month for five years. Still find 200-300 in the budget to cut back on. There has to be something. The 1k a month should pay for the overage you calculated and anything like new tires, broken ac etc. Summer pool pass, anniversary dinner. This is only OK if you're contributing to retirement. This is assuming the DW gets a job when the kids are in school (in 5 yrs). A better compromise would be for your wife to spend 2-3 years at home.

Remember that you have a fixed rate mortgage and hopefully will make more money over time. This isn't a permanent situation. Your kids will go to school and your wife can do more part time work.

Can anyone identify part-time work that will generate $40k/year? That seems like a hard thing to line up unless you already have a job with a company and scale back (which is still not easy).

That's about what I make. I work between 20 and 25 hours a week. I bring in about 35-40k a year. I am an administrator in a small non-profit.

How did you find this job?

It was one of those times when everything falls into place in perfect order. Some people might say it was luck. I believe it was more than that. I was working full time in a job that was super stressful. My kids are all older....one high school junior left at home... so childcare wasn't an issue. However, my DH hated that I was working full-time. I was exhausted and we both feel that our home runs more smoothly with me at home. I told my DH that if I could find a part time job making at least 35k a year I would take it. The next day a friend of a friend called me in crisis saying her office administrator had left due to a family emergency. She knew I was working full time as a program director and that I had been the office admin at a law firm before we moved. She offered me the job that day.

It's been three years and I still love my job! 20-25 hours a week. Very flexible. Great environment. I love that it's a non-profit with a mission that I am passionate about. Honestly, I'll probobly still be working here at 70. I would volunteer for the job if it weren't a paid position.

this is similar to the transitioning existing job to part-time; is there no stories of just finding a part time job on open job market?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:The DW needs a weekend job of some sort. Some sort of income to pay for extras. She could avoid a 50 hour work week.

Another option is to spend 60k of your savings. At the end of the day, thsys what savings is for. What is 200k in a low rate CD going to do for your anyway? Just make sure you have enough for a year of living exoe ses if the dh loses his job. Allocate 1k a month for five years. Still find 200-300 in the budget to cut back on. There has to be something. The 1k a month should pay for the overage you calculated and anything like new tires, broken ac etc. Summer pool pass, anniversary dinner. This is only OK if you're contributing to retirement. This is assuming the DW gets a job when the kids are in school (in 5 yrs). A better compromise would be for your wife to spend 2-3 years at home.

Remember that you have a fixed rate mortgage and hopefully will make more money over time. This isn't a permanent situation. Your kids will go to school and your wife can do more part time work.

Can anyone identify part-time work that will generate $40k/year? That seems like a hard thing to line up unless you already have a job with a company and scale back (which is still not easy).

That's about what I make. I work between 20 and 25 hours a week. I bring in about 35-40k a year. I am an administrator in a small non-profit.

How did you find this job?

It was one of those times when everything falls into place in perfect order. Some people might say it was luck. I believe it was more than that. I was working full time in a job that was super stressful. My kids are all older....one high school junior left at home... so childcare wasn't an issue. However, my DH hated that I was working full-time. I was exhausted and we both feel that our home runs more smoothly with me at home. I told my DH that if I could find a part time job making at least 35k a year I would take it. The next day a friend of a friend called me in crisis saying her office administrator had left due to a family emergency. She knew I was working full time as a program director and that I had been the office admin at a law firm before we moved. She offered me the job that day.

It's been three years and I still love my job! 20-25 hours a week. Very flexible. Great environment. I love that it's a non-profit with a mission that I am passionate about. Honestly, I'll probobly still be working here at 70. I would volunteer for the job if it weren't a paid position.

this is similar to the transitioning existing job to part-time; is there no stories of just finding a part time job on open job market?

I haven't found a PT job on the open job market but they do exist but they're not going to necessarily pay that much. Smaller law offices and small businesses will often hire admins on a PT basis around $15/hr for about 20-30 hours of work a week. Check Craigslist.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:The DW needs a weekend job of some sort. Some sort of income to pay for extras. She could avoid a 50 hour work week.

Another option is to spend 60k of your savings. At the end of the day, thsys what savings is for. What is 200k in a low rate CD going to do for your anyway? Just make sure you have enough for a year of living exoe ses if the dh loses his job. Allocate 1k a month for five years. Still find 200-300 in the budget to cut back on. There has to be something. The 1k a month should pay for the overage you calculated and anything like new tires, broken ac etc. Summer pool pass, anniversary dinner. This is only OK if you're contributing to retirement. This is assuming the DW gets a job when the kids are in school (in 5 yrs). A better compromise would be for your wife to spend 2-3 years at home.

Remember that you have a fixed rate mortgage and hopefully will make more money over time. This isn't a permanent situation. Your kids will go to school and your wife can do more part time work.

Can anyone identify part-time work that will generate $40k/year? That seems like a hard thing to line up unless you already have a job with a company and scale back (which is still not easy).

That's about what I make. I work between 20 and 25 hours a week. I bring in about 35-40k a year. I am an administrator in a small non-profit.

How did you find this job?

It was one of those times when everything falls into place in perfect order. Some people might say it was luck. I believe it was more than that. I was working full time in a job that was super stressful. My kids are all older....one high school junior left at home... so childcare wasn't an issue. However, my DH hated that I was working full-time. I was exhausted and we both feel that our home runs more smoothly with me at home. I told my DH that if I could find a part time job making at least 35k a year I would take it. The next day a friend of a friend called me in crisis saying her office administrator had left due to a family emergency. She knew I was working full time as a program director and that I had been the office admin at a law firm before we moved. She offered me the job that day.

It's been three years and I still love my job! 20-25 hours a week. Very flexible. Great environment. I love that it's a non-profit with a mission that I am passionate about. Honestly, I'll probobly still be working here at 70. I would volunteer for the job if it weren't a paid position.

this is similar to the transitioning existing job to part-time; is there no stories of just finding a part time job on open job market?

I haven't found a PT job on the open job market but they do exist but they're not going to necessarily pay that much. Smaller law offices and small businesses will often hire admins on a PT basis around $15/hr for about 20-30 hours of work a week. Check Craigslist.

The problem here is most WOHP go from careers earning $75/hr and the only part time options available are 1/4 that listed on CRAIGSLIST. Ugh.

Why is this? I know in europe professional part time work is much more available; though salaries are overall lower so maybe thats part of it

[Anonymous]

Can you wife ask about job share (two part time people working one job) or if her boss will allow to go part time. They may just let her do it. I do think your mortgage is pretty high, but with your savings balance I don't see you falling into a financial crisis so you will probably be fine.

[Anonymous]

OP, the problem isn't what you make or that your wife wants to stay home. The problem is that your mortgage is too high on your income alone, and you want your wife to stay home for ten years. That's a long time to plan to supplement your income with savings, and rarely does life work out the way it should.

Look, I'm just going to be blunt. I'm a longterm/lifetime SAHM. I know that the vast majority of DCUM will gasp, but I've been home for 14 years since our son was born with special needs, making it impossible to have a two family income. It's been easier for us because we were poor to begin with, and as my husband's income increased over the years, we've adjusted accordingly.

You asked if households making 100k a year escaped to the exurbs, and the answer is YES. That's where middle class families traditionally live, and OP, you are middle class just like the rest of us. My husband nets about $9000 per month, and we are looking for homes in the $400-$500k price range because that is the financially responsible thing to do. His commute is definitely going to be longer, and we can't brag about being in a "walkable" area and close to the metro or casually strolling to the Smithosonian with our kids, but we don't have to worry about how to afford a family cell phone bill, don't have to cut cable, and don't have to stretch to visit our family once or twice a year on the west coast.
If your kids are ten years away from high school, then it sounds like they are really young, and this is the time to move them to a new area in a less expensive house, so that they can become part of a new community and a new school cluster with minimal disruption to their lives.

You will not be able to maintain your current lifestyle without sacrificing something--whether it's your time, your money, your savings, or your home. If you absolutely must stay in your current neighborhood, then you might have to give up the luxury of home ownership and rent instead.

BTW, your cellphone plan is atrocious. Are you with Verizon? Dump them and get TMobile instead, you can all buy gently used smartphones on Swappa or Ebay, and you will pay for that in the difference in your bills after the first two months. If you are on AT&T, you can use the same phones, just get TMo sims.

[Anonymous]

I have a part-time job as a contract attorney with a small law firm. They give me overflow work on an as-needed basis. I make $20-50k per year, the work is not steady but pays well. I don't think this type of job is impossible to find, but it's not very stable.

[Anonymous]

Anonymous wrote:I have similar income, PITI, 2 kids, and SAHP. We buy clothes at thrift stores and ebay. No cell phones. No life insurance. Similar vacation funds. Similar kids activities. Less petro as we live close-in and I bike to work. We occasionally rent a room out. Max TSP. Good luck. It's hard to not keep up with Jones' in a rich Jones' world, but not that hard.

I can't even believe you don't have life insurance! That is crazy irresponsible. Just crazy.