How do people afford kids?

[Anonymous]

whoops--that last sentence was supposed to go after the exclamation point. It makes more sense that way.

[Anonymous]

Anonymous wrote:

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.

OP here -- wow that is great to know about the childcare tax credits/deductions. I knew they existed in theory, but I didn't realize it was worth that much. This is the type of advice that is really helpful on a finance forum because I don't really want to go around asking friends about their taxes. An extra grand or so would provide a lot of wiggle room toward childcare.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

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.

OP here -- wow that is great to know about the childcare tax credits/deductions. I knew they existed in theory, but I didn't realize it was worth that much. This is the type of advice that is really helpful on a finance forum because I don't really want to go around asking friends about their taxes. An extra grand or so would provide a lot of wiggle room toward childcare.

Seriously, think of that $12k as an interest free loan to the government! That is not the right place for your money.

[Anonymous]

OP again -- you're right, maybe we should be bringing home more money?

This is our first year of marriage, first year of owning a home, and first time fully co-mingling our assets. We wanted to err on the side of not taking many deductions so we could make sure we get a refund (so we never get blindsided by owing a ton of money). Maybe we are taking the whole feast then famine idea too far though.

[Anonymous]

Whoops I mean famine then feast.

[Anonymous]

Anonymous wrote:

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.

Jobs are iffy there, you are playing roulette with your family's life

[Anonymous]

Also, if you have been maxxing your retirement contributions now, at your youngish-age, you are already ahead of a lot of people, and will have the glories of compounding interest to help propel your savings, even if you find you need to cut back on contributions for a while.

(But don't do this just to add to college funds or something--put on your oxygen mask before assisting others, as they say)

[Anonymous]

Anonymous wrote:You purchased too much house / took out too much mortgage. You may think that 1/3 is well within normal living standards - but who ever told you that was wrong.

+1

[Anonymous]

Anonymous wrote:DH and I spend a third of our net pay (after paying for health insurance and retirement) toward our mortgage, which is well within normal lending standards. Then by the time we pay a car payment, about $400/month in student loans, routine bills, groceries, put money toward savings, etc., it feels like there isn't a ton left. We are 30 and 35 trying for a family and people keep telling us that you just "make it work" when you have kids -- but I am stressed about swinging 2k a month on infant daycare on top of all the other costs of raising a kid.

I know we can tighten our belts and make it work by cutting back on things like traveling to friends' weddings, occasional happy hours, etc. But, I can't help but feel that with two graduate school educations and a HHI of 180k a year, we shouldn't just be "getting by" in order to start a family.

I was the first in my family to graduate college and my family lived very comfortably (nice house, vacations, college paid for, etc) off one in income earned by my dad who had just a HS diploma. It's kind of depressing how hard it is now to live a middle class life.

What do all you parents do to make it work? Please no snarky comments that we just shouldn't have kids. Having a family shouldn't be a privilege just for those who make 400k/year.

You won't be traveling or going to happy hour much once you have kids. You also spent too much on your house. Also, your background is what is making you think you should have more money.

[Anonymous]

OP, others have said it already but consider moving elsewhere. We couldn't afford kids in DC despite making a combined $120k. Even then, we'd be scraping by and it wouldn't be the lifestyle I wanted. We moved to Atlanta and have ZERO regrets. We have a big house here, a yard, I'll be able to stay home...granted it's not nearly as interesting of a place to live but you have to sacrifice somewhere.

[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.

Do you have a college degree?

[Anonymous]

I'm a single mom who makes $100K a year. My mortgage is a huge chunk of my take-home pay (like 50%) because I live in North Arlington for the schools and the commute. My take-home pay is also low because I have a lot of things taken out of it, like parking, metro and child care FSAs and a decent chunk for my 401K.

What helps: I don't travel or spend a ton on frivolous stuff. I keep my cars long after they're paid off. I found a daycare near my previous home in Fairfax instead of my work in DC, which helped. I borrowed a lot of the baby stuff, and i'm not afraid to buy from consignment sales.

Things were tight during the daycare and preschool years ($1,300/month or so), but they've eased up now that my daughter is in kindergarten - aftercare is cheaper, and camps are only 10-12 weeks of the year. (the cost is a bit higher than our daycare was.)

[Anonymous]

14:00 here - also, I chose my college based on whether I could get a scholarship and not have student loans. I chose a part-time grad school program so I wouldn't have to stop earning during the 2 years, and only had to take out loans for part of the tuition. So my student loan payments are super tiny.

[Anonymous]

Anonymous wrote:

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.

I'd do it in a heartbeat if I could, but I'm not even sure DH could get a job outside of a major metropolitan area. And I'd probably make 60% of what I do here.

[Anonymous]

Anonymous wrote:

I was the first in my family to graduate college and my family lived very comfortably (nice house, vacations, college paid for, etc) off one in income earned by my dad who had just a HS diploma. It's kind of depressing how hard it is now to live a middle class life.

The problem is that there are many more dual income professional families nowadays, especially in DC area. What's important is not how much you make, but that you make MORE than all the other people who also want to buy the same limited supply of things. If I make a million a year, but everyone else around me makes 2 million and can afford to spend twice as much as I can on the same house, I'm still poor in terms of the purchasing power of that million dollar income.