How do people afford kids?

[Anonymous]

OP, we have a $250K income and struggled with two in daycare. We paid around $45K last year for their day care, although we are in NWDC where it's probably more expensive. So you are right to think about these things. We made ends meet by scaling back savings and retirement. We used to max out 401k, get IRAs and with one kid we even had some good 529 contributions. But we scaled that back to contribute just enough to get our employer matches. We had no savings and lived paycheck to paycheck. Now the older child is in public school for the last couple months and it's already such a relief. Our savings account is quickly building back up and I think we will be living quite comfortably again when #2 is in public school.

[Anonymous]

Interesting that the one financial mistake so many DCUMers make was made long before they thought about buying a house or having kids -- they racked up thousands in student loans.

I am stunned that so many DCUMers calmly report paying $500, $800, $1,100 a month toward student loans. I can't imagine that.

[Anonymous]

Anonymous wrote:Interesting that the one financial mistake so many DCUMers make was made long before they thought about buying a house or having kids -- they racked up thousands in student loans.

I am stunned that so many DCUMers calmly report paying $500, $800, $1,100 a month toward student loans. I can't imagine that.

i needed to get an education.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Interesting that the one financial mistake so many DCUMers make was made long before they thought about buying a house or having kids -- they racked up thousands in student loans.

I am stunned that so many DCUMers calmly report paying $500, $800, $1,100 a month toward student loans. I can't imagine that.

i needed to get an education.

+ 1

Even with a few hundred in loans, I still bring home more money than if I hadn't gone through college and grad school (with scholarships and fellowships along the way to help). The net take home is bigger even though there is a loan to pay, not to mention my long term earning potential is higher.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Hah... I was literally just texting the wife about this cause I paid our credit card bill for this month.

Thanks for scheduling a payment on Oct 27, 2014, with Online Banking. Here are your payment details:

Payment amount:
$11356.09

Payment date:
Oct 31, 2014

If you see an error with this scheduled payment, just sign in to Online Banking—we’re here to help you 24 hours a day, 7 days a week.

....

WHERE DOES IT ALL GO !?!

Did you have special expenses this month? Or is this the norm? How many kids do you have? Just asking because our CC bill is about 1000 dollars a month with one child.

our too - about 1000 month with one child.

[Anonymous]

Anonymous wrote:Roadkills my dear. Free meat.

Go vegan and food is practically free -- if you know how to actually cook and not just buy processed food, of course.

[Anonymous]

OP i was you 2 years ago. We are regular people--- $155k HHI, our salaries are almost equal so we couldn't drop one.

Our take home is around $9k/month since we don't have health premiums but we do pay for two ROTHs out of our take home.
With our kid expenses look something like this:

$2500 mortgage
$1400 daycare (it's not $2k but it's still expensive)
$1200 groceries, household, eating out, alcohol
$ 800 house utilities, biweekly house cleaner,
$ 250 other baby expenses (diapers, gear)
$ 200 gyms and medical expenses
$ 250 gas and car stuff
$ 200 travel costs
$ 400 shopping, which includes clothes/toys/gifts

After all of that we have around $1500/mo - depending on any home repairs or random expenses, and add that to our ROTHs and other savings.

[Anonymous]

Downsize housing and/or retirement/savings

[Anonymous]

A lot of us do it by not living on the East Coast anymore. We live in a flyover state and our enjoying our time here.

Here, our 5 bedroom, 3 bath home with lake rights cost us about $250k. We have two boats and are eying a camper as well as a vacation home in Florida. Only one of us works full time to maintain this lifestyle. In fact, one of us has been able to be home based since our kids were born.

[Anonymous]

^^ are enjoying our time

[Anonymous]

How our family had kids in this area on 60k, now 110 k since I got a job:

live in a less desirable area (PG county)
no cable, no eating out
forgo retirement/college savings
lots of family help (both childcare and $$)

Since I started working, we are saving more and have a little more leeway. But it is what it is and our kids are worth it.

[Anonymous]

We waited until I had been at my position long enough to get STD (and DD was early, but I made it with 4 weeks to spare). We're now combined $250k and spend $2300 on rent, $500 towards student loans, $1600 for childcare, $1200 for groceries... We will be very happy once student loans and the cars are paid off (should give us an extra $1,100 monthly) and can bulk up the savings.

[Anonymous]

We have 3 kids (2 in private school, 1 with nanny share) and make $180K HHI. We also have a $2100 month mortgage and $800 month in student loans. Handling 1 kid on your salary sounds luxurious.

[Anonymous]

When I was 26 I saved aggressively to pay off my student loans. I did not do a lot of the shopping that my friends did- and I am ok that I did not purchase all of those Kate Spade Bags and designed clothing. My loans were paid off by 28 and I went a bunch of yerars without a car taking the bus to and from work. I had a decent retirement savings and 20% to put down for purchasing a house.

I prioritized savings to spending in my 20s so that in my 30s when I added in saving for my wedding, a mortgage on a single family home in DC, childcare expenses, extended leave, these events were painful but not impossible.

I have friends who stopped contributing to retirement and borrowed money from family to pay for child care. The same friends prioritize travel over everything. Each year they take at least 5 weeks of vacation a year. But they are OK with their choices - partially because they know they have grandparents who are contributing to their children's college fund - so they just need to swing month to month expenses and their own retirement.


Given that you are getting 12K tax return each year - why not take that windfall and put it aside as a "downpayment to childcare"? Or pay off your car? It sounds like you do not know how to manage your money.

[Anonymous]

Anonymous wrote:OP again, my mortgage is actually more like 30% take home after taxes, maxing retirement, healthcare, and our car payment (I forgot it automatically goes into a separate credit union account). We barely take any deductions, so we'll be getting around 12k back on taxes this year, so this also lowers our take home pay. We have a 3 bedroom house, outside the beltway in NoVa, that is about 30-40 min. to both our jobs. We stretched a bit to be in a good school district because that was really important to us.

I wasn't trying to stir a debate about my housing. I truly just wanted helpful advice/perspective from other families in the area who make it work with a middle class income.

I love the ideas about toys off Craigslist, signing up for a babysitting sharing service, bulking up on diapers when they are on sale, etc. Also, a lot of PPs have pointed out that weekend activities change once you have kids. I imagine we'll be spending more time at home, ordering pizza, going to the park, etc. as opposed to going to concerts and trying new restaurants. In-home daycare might be worth researching for us or perhaps daycare in the burbs will be cheaper than what my friends closer-in pay.

I'm glad to know there are others out there who make things work in order to have kids!

Well, for one thing, change your withholdings! Combine that with the extra dependent deduction ($3950x28%=~1100) and childcare related credits/deductions ($600-1400 depending on whether you have access to a dependent care fsa) and you're looking at an extra $1200 a month. That will make a pretty big dent in your daycare bill without any daily lifestyle changes.

You'd have an extra $1000 a month that way which will go a long way to helping with daycare.