Anonymous
Post 05/21/2014 12:46     Subject: Sad, just had to cease contributions to my 401K in order to budget in daycare costs for new baby :(
Anonymous wrote:
Anonymous wrote:Sell the land in the mountains.

+1


We've looked into it, but we are pretty upside down on it, unfortunately
Anonymous
Post 05/21/2014 12:40     Subject: Sad, just had to cease contributions to my 401K in order to budget in daycare costs for new baby :(
Anonymous wrote:Sell the land in the mountains.

+1
Anonymous
Post 05/21/2014 12:38     Subject: Sad, just had to cease contributions to my 401K in order to budget in daycare costs for new baby :(
Sell the land in the mountains.
Anonymous
Post 05/21/2014 12:08     Subject: Sad, just had to cease contributions to my 401K in order to budget in daycare costs for new baby :(
Anonymous wrote:
Anonymous wrote:
Anonymous wrote:
Anonymous wrote:I'm also curious what you could be spending on. At 140,000 you should absolutely be able to do both. We pay $1,600 a month for one kid in daycare, nearly $2,000 for piti, and more than 1500 in student loan repayment on a dual income total of 127,000. We still each save between 7-10% for retirement and put $2,000 a year into 529.


OP here, our mortgage is $2,800/mo. We also have a mortgage for land we bought in the mountains back when my husband's business was doing really well, which is another $1,200/mo. I really wish we never bought that, but at least both mortgages will be paid off in 9 years. We have a car payment of $350. Life insurance policies are $160/mo, parking for my work is $290/mo, and DH spends about $500/mo in gas because for work, he drives around all day long, etc.. I feel like when you look at our $140K income, it seems like a lot, but when you take out all the income tax, self employment tax, health insurance, business bonding and insurance, etc. it's whittled down so much.

We never eat out, I think we've eaten out maybe twice in the past year. We haven't gone to the movies in many years. We barely spend anything on "entertainment".


Woah, 4K a month in mortgages? That is your problem right there.


Yeah, I know. If I could go back in time....

if you only have 9 years left to pay - it might make sense to refi at least primary residence. Yes, it will increase the length of the loan, but might help you with cash flow by lowering monthly payments.
Anonymous
Post 05/21/2014 11:51     Subject: Sad, just had to cease contributions to my 401K in order to budget in daycare costs for new baby :(
Anonymous wrote:
Anonymous wrote:
Anonymous wrote:I'm also curious what you could be spending on. At 140,000 you should absolutely be able to do both. We pay $1,600 a month for one kid in daycare, nearly $2,000 for piti, and more than 1500 in student loan repayment on a dual income total of 127,000. We still each save between 7-10% for retirement and put $2,000 a year into 529.


OP here, our mortgage is $2,800/mo. We also have a mortgage for land we bought in the mountains back when my husband's business was doing really well, which is another $1,200/mo. I really wish we never bought that, but at least both mortgages will be paid off in 9 years. We have a car payment of $350. Life insurance policies are $160/mo, parking for my work is $290/mo, and DH spends about $500/mo in gas because for work, he drives around all day long, etc.. I feel like when you look at our $140K income, it seems like a lot, but when you take out all the income tax, self employment tax, health insurance, business bonding and insurance, etc. it's whittled down so much.

We never eat out, I think we've eaten out maybe twice in the past year. We haven't gone to the movies in many years. We barely spend anything on "entertainment".


Woah, 4K a month in mortgages? That is your problem right there.


Yeah, I know. If I could go back in time....
Anonymous
Post 05/21/2014 11:49     Subject: Sad, just had to cease contributions to my 401K in order to budget in daycare costs for new baby :(
Anonymous wrote:
Anonymous wrote:I'm also curious what you could be spending on. At 140,000 you should absolutely be able to do both. We pay $1,600 a month for one kid in daycare, nearly $2,000 for piti, and more than 1500 in student loan repayment on a dual income total of 127,000. We still each save between 7-10% for retirement and put $2,000 a year into 529.


OP here, our mortgage is $2,800/mo. We also have a mortgage for land we bought in the mountains back when my husband's business was doing really well, which is another $1,200/mo. I really wish we never bought that, but at least both mortgages will be paid off in 9 years. We have a car payment of $350. Life insurance policies are $160/mo, parking for my work is $290/mo, and DH spends about $500/mo in gas because for work, he drives around all day long, etc.. I feel like when you look at our $140K income, it seems like a lot, but when you take out all the income tax, self employment tax, health insurance, business bonding and insurance, etc. it's whittled down so much.

We never eat out, I think we've eaten out maybe twice in the past year. We haven't gone to the movies in many years. We barely spend anything on "entertainment".


Woah, 4K a month in mortgages? That is your problem right there.
Anonymous
Post 05/21/2014 11:27     Subject: Sad, just had to cease contributions to my 401K in order to budget in daycare costs for new baby :(
Anonymous wrote:do either of your companies let you withdraw up to $5,000/year pre-tax for a Dependent Care FSA? If so, that would free up some money. Also, don't forget that there will be tax benefits to having another dependent.


Yes, I actually do that already
Anonymous
Post 05/21/2014 11:26     Subject: Sad, just had to cease contributions to my 401K in order to budget in daycare costs for new baby :(
Anonymous wrote:I'm also curious what you could be spending on. At 140,000 you should absolutely be able to do both. We pay $1,600 a month for one kid in daycare, nearly $2,000 for piti, and more than 1500 in student loan repayment on a dual income total of 127,000. We still each save between 7-10% for retirement and put $2,000 a year into 529.


OP here, our mortgage is $2,800/mo. We also have a mortgage for land we bought in the mountains back when my husband's business was doing really well, which is another $1,200/mo. I really wish we never bought that, but at least both mortgages will be paid off in 9 years. We have a car payment of $350. Life insurance policies are $160/mo, parking for my work is $290/mo, and DH spends about $500/mo in gas because for work, he drives around all day long, etc.. I feel like when you look at our $140K income, it seems like a lot, but when you take out all the income tax, self employment tax, health insurance, business bonding and insurance, etc. it's whittled down so much.

We never eat out, I think we've eaten out maybe twice in the past year. We haven't gone to the movies in many years. We barely spend anything on "entertainment".
Anonymous
Post 05/20/2014 21:58     Subject: Sad, just had to cease contributions to my 401K in order to budget in daycare costs for new baby :(
do either of your companies let you withdraw up to $5,000/year pre-tax for a Dependent Care FSA? If so, that would free up some money. Also, don't forget that there will be tax benefits to having another dependent.
Anonymous
Post 05/20/2014 20:25     Subject: Re:Sad, just had to cease contributions to my 401K in order to budget in daycare costs for new baby
OP, I'm in the same boat. I've been contributing money to my 401K (about $7,200 a year) and also fully funding a Roth IRA ($5,500 a year.) I can't do both, so I'm about to stop or drastically cut back on my 401K. The daycare costs are just really tough to handle on a single salary. Thankfully, I think I'll be able to keep up with my contributions to the Roth.

I know, I know, there are others who would cut back on every other part of life before transferring one dime away from retirement savings. But I don't need to save a million dollars so that I can live in the DC metro area in my old age and travel the world. Hopefully I'll have flexibility to move to a cheaper area and just live a comfortable frugal life. I'm looking at it as a short-term diversion, hopefully it'll be the same for you as well.
Anonymous
Post 05/20/2014 19:48     Subject: Sad, just had to cease contributions to my 401K in order to budget in daycare costs for new baby :(
OP, aside from the recommendations on looking for ways to cut expenses, I would suggest you do a quick tax estimate. The contributions to your 401k plan lower your taxable wages so you pay less in income tax. If you drop your contribution you will pay more in taxes. At your combined income level, the dependent care deduction may not be enough of an offset, meaning you may pay more in Federal taxes then if you had kept or lowered your contribution. You do not want to be in a position where you are paying the government instead of yourself.

You may find that you can decrease the amount withheld for taxes when you account for the new dependent, the 401k contribution, and daycare costs.
Anonymous
Post 05/20/2014 19:29     Subject: Sad, just had to cease contributions to my 401K in order to budget in daycare costs for new baby :(
Yes we did this, it's normal especially with the over priced costs of daycare and nannies. We were able to save money by finding a Nanny that also cleaned on the weekend.
Anonymous
Post 05/20/2014 19:27     Subject: Sad, just had to cease contributions to my 401K in order to budget in daycare costs for new baby :(
I'm also curious what you could be spending on. At 140,000 you should absolutely be able to do both. We pay $1,600 a month for one kid in daycare, nearly $2,000 for piti, and more than 1500 in student loan repayment on a dual income total of 127,000. We still each save between 7-10% for retirement and put $2,000 a year into 529.
Anonymous
Post 05/20/2014 14:57     Subject: Sad, just had to cease contributions to my 401K in order to budget in daycare costs for new baby :(
Our fee-based plan was only $700. Shop around.
Anonymous
Post 05/20/2014 14:54     Subject: Re:Sad, just had to cease contributions to my 401K in order to budget in daycare costs for new baby
Anonymous wrote:I would seriously cut all else from your budget first. Like, no cable, no smartphones, no memberships, no eating out, get movies from the library, etc before cutting retirement. Literally cut everything to the bone.


+1