Anonymous
10/28/2014 07:24
Subject: Re:How do people afford kids?
HHI of $275 here, so we are by no means impoverished, but we still have to make sacrifices to fund the kiddos. I have two in daycare (ouch!) and the bill is about the same as my mortgage - daycare for two is $2500 and mortgage (and taxes/insurance/etc.) is $2900. You would think we would be swimming in $ but my DH has major student loan debt to the tune of $1100/month. I think our mortgage is not outrageous for this area and it covers around $400k on a modest place that is around 1500 square feet. If you live in DC, you can get free pre-k started at age 3, so that would really help with budgeting (alas, we don't live in DC but our daughter lost 1/2 of our preschool class this year to the public school system).
We have clamped down on spending in various ways, including: switching to the cheapest cable company, ditching our land line, buying clothes ONLY on clearance (and for the kids, I often buy for the next year so I buy summer clothes in September that will fit the kids the next year - you can save mucho $ doing that), only vacations are to visit family and we use a rewards card to get points for airfare, rarely eat out and if we do it's a cheap family joint for pizza or something like that. I also bought a hybrid car before the kids and that means I only buy gas once a month or so (we live pretty close in). Some things I was doing before kids are not really happening now so that's an added savings - this includes no more regular facials or weekly dinners out at nice restaurants. One thing we're working on is contemplating joining a babysitting exchange in our neighborhood so that we trade off looking after neighborhood kids a couple of times a year so we can have a date night without adding $80 to the cost by hiring a babysitter.
Kids are expensive, and there are things you won't even think about. For example, my daughter needs special medicine for a minor but super annoying condition for her that costs $100/month even with insurance and the little discount card. But, you can make it work. If need be, we would move farther out or just completely away from this expensive city. It's something I consider all of the time. Not just for $ but for quality of life. I would love to live in a smallish town where my commute is 15 minutes so I spend more time with the kids and my kids won't be exposed to all the crazy competition around here.
We have clamped down on spending in various ways, including: switching to the cheapest cable company, ditching our land line, buying clothes ONLY on clearance (and for the kids, I often buy for the next year so I buy summer clothes in September that will fit the kids the next year - you can save mucho $ doing that), only vacations are to visit family and we use a rewards card to get points for airfare, rarely eat out and if we do it's a cheap family joint for pizza or something like that. I also bought a hybrid car before the kids and that means I only buy gas once a month or so (we live pretty close in). Some things I was doing before kids are not really happening now so that's an added savings - this includes no more regular facials or weekly dinners out at nice restaurants. One thing we're working on is contemplating joining a babysitting exchange in our neighborhood so that we trade off looking after neighborhood kids a couple of times a year so we can have a date night without adding $80 to the cost by hiring a babysitter.
Kids are expensive, and there are things you won't even think about. For example, my daughter needs special medicine for a minor but super annoying condition for her that costs $100/month even with insurance and the little discount card. But, you can make it work. If need be, we would move farther out or just completely away from this expensive city. It's something I consider all of the time. Not just for $ but for quality of life. I would love to live in a smallish town where my commute is 15 minutes so I spend more time with the kids and my kids won't be exposed to all the crazy competition around here.
Anonymous
10/28/2014 07:06
Subject: How do people afford kids?
We are about to find out. We make about 130,000. Our mortgage is 2300. We in major saving mode til the baby comes.
Anonymous
10/28/2014 03:29
Subject: Re:How do people afford kids?
Here's 185 dwellings for sale in Montgomery County for $175k or less. All have at least 2 bedrooms.
http://www.zillow.com/homes/for_sale/Montgomery-County-MD/pmf,pf_pt/house,condo,apartment,duplex,mobile,townhouse_type/2975_rid/2-_beds/0-175000_price/0-654_mp/days_sort/39.403305,-76.768684,38.876601,-77.661324_rect/10_zm/
It's all about priorities. You can easily afford kids if that is your priority. You just need to live within your overall budget. Depending on your budget you could live in a $10 million home or you may have to live in a $100k home.
http://www.zillow.com/homes/for_sale/Montgomery-County-MD/pmf,pf_pt/house,condo,apartment,duplex,mobile,townhouse_type/2975_rid/2-_beds/0-175000_price/0-654_mp/days_sort/39.403305,-76.768684,38.876601,-77.661324_rect/10_zm/
It's all about priorities. You can easily afford kids if that is your priority. You just need to live within your overall budget. Depending on your budget you could live in a $10 million home or you may have to live in a $100k home.
Anonymous
10/28/2014 01:45
Subject: How do people afford kids?
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 You are living above your means.
Anonymous
10/28/2014 01:39
Subject: Re:How do people afford kids?
Anonymous wrote:This is why people who have kids stop eating lunch in restaurants, stop getting highlights, wear shoes longer than they did before, stop buying one another lavish holiday gifts. you sacrifice. sucks but that's what it is.
+1
Anonymous
10/27/2014 23:11
Subject: Re:How do people afford kids?
Anonymous wrote:This is why people who have kids stop eating lunch in restaurants, stop getting highlights, wear shoes longer than they did before, stop buying one another lavish holiday gifts. you sacrifice. sucks but that's what it is.
Yup, all of this. Plus fewer vacations, stopped overpaying student loan debt, purchased a sensible used family car, purchased clothes and shoes from ebay, put us on a strict budget.
Anonymous
10/27/2014 23:06
Subject: How do people afford kids?
Anonymous wrote:Anonymous wrote:Ha! 1/4 to 1/5 of take home?? So seriously, in our case that's 800 per month for us after retirement and insurance premiums. Not happening. Where do these misers live?
MoCo. $2600/mo mortgage.
And how long ago did you buy your first house?
Anonymous
10/27/2014 23:04
Subject: How do people afford kids?
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.[/quote
+1
Anonymous
10/27/2014 22:50
Subject: How do people afford kids?
Ummmm my amex bill is $10k all the time. Gas, groceries, amazon mom stuff (diapers, formula), travel expenses for DH's job, wedding/birthday/shower gifts... Now that's we're approaching Xmas, it will be even more...
Anonymous
10/27/2014 22:42
Subject: How do people afford kids?
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 !?!
You need to quit with the credit card until you figure out where it all goes. The credit card (really, plastic of any sort, even a debit card) makes it sooooooooooo easy for it to sneak up on you. This is extreme, and if you're doing fine without it, then keep on keeping on, but for those who are feeling the squeeze and don't know how they're going to make it work - go to cash for a little while. The envelope system. Yes, it feels old-fashioned and for some people, uncomfortable carrying that much cash. But it will be a real eye opener when you budget $800 for groceries and you take $200 a week - you'll be watching what goes in your basket realllll closely.
Even for people who are well off and out of debt, I really think Dave Ramsey's lessons around budgeting (on paper, on purpose, before the month begins) and using cash for at least a little while as you start to get your spending under control (that doesn't necessarily mean cutting back, just that you know where it's going before it goes) is a life changer. We're not religious, and were never in super massive debt (DH had about $25k in student loans, I had about $5k, he also had a $20k car loan when we met), but the Dave Ramsey philosophy has been amazing for us.
FWIW, DH and I are 29/30; make about $180k combined, have lived on his smaller income only ($85k) since we got married a year and a half ago, and we'll have our house paid off in about 16 months. $500k combined net worth. I started out at $36k out of school and bought a home on my own when I was making $60k, so it isn't like we've always had a comfortable HHI. No family money. We have a GREAT life, we don't feel frugal or like we're being denied anything. But we started early and we make a plan for our money before the month begins. Yes, we've made some choices (smaller house, nice used cars) that help us along, but the NUMBER ONE thing is knowing where the money is going BEFORE it goes. Not after. Don't tally it up, like Mint.com does. Plan it ahead of time. On a yellow pad if you need to.
It is a life changer, it really is.
Sorry I should have said I didn't need advice. Could have spared you typing all that up, but thanks. Those are great numbers for your age. Despite our $11,000 bill we manage fine - or income is about $320k and we live on $120k much like you. This month was atypical.
Anonymous
10/27/2014 22:30
Subject: How do people afford kids?
OP again -- thanks to everyone who has given me some insight on how to cut back. It makes me feel better to know there are others who are making it work. A lot of threads I read on here make me feel like I'm falling behind because I don't have 3 million in net worth by 30, could not afford to live in some urban city neighborhood that requires paying for private schools, etc.
I am inspired by those of you who have really cut back on your dining out budget, cable, salon spending, etc. (I know these are easy things we can/should cut back on) and I am going to work on better budgeting money before we spend it. I also think we need to learn to rsvp no to out of town weddings, because seriously -- we have spent at at least 5k going to weddings this year!
Maybe 2k was a bit of an exaggeration for daycare -- I know some of my very wealthy friends spend this much, but I imagine there must be some cheaper options?
And to those of you commenting on the amount I spend on my mortgage -- trust me, I would love to not have to spend that much. But breaking into home ownership nowadays requires a stretch. And even with stretching, I have read enough of the real estate thread to know that I am considered one of "the poors" around here!
I am inspired by those of you who have really cut back on your dining out budget, cable, salon spending, etc. (I know these are easy things we can/should cut back on) and I am going to work on better budgeting money before we spend it. I also think we need to learn to rsvp no to out of town weddings, because seriously -- we have spent at at least 5k going to weddings this year!
Maybe 2k was a bit of an exaggeration for daycare -- I know some of my very wealthy friends spend this much, but I imagine there must be some cheaper options?
And to those of you commenting on the amount I spend on my mortgage -- trust me, I would love to not have to spend that much. But breaking into home ownership nowadays requires a stretch. And even with stretching, I have read enough of the real estate thread to know that I am considered one of "the poors" around here!
Anonymous
10/27/2014 22:30
Subject: How do people afford kids?
Anonymous wrote:Well, you don't need $2k per month on care. You can find that for less.
We bought a really small TH so we could stay at 1/4 gross, now with salary increases it is 1/4 take home. I regret often that we don't have a SF and a yard, or even a bit bigger TH but can't leave and really, I have a roof over my head so, I try to focus on that.
We don't eat anywhere fancy, cook most nights and bring lunch. We still struggle with giving up delivery and do spend to have Friday Night pizza or Chinese or Italian. I try to push for pizza since it's cheaper.
Haircuts at $50 every three months are a splurge.
Stagger kids so only have one in care at a time.
Savings are meager, sad, but enough to cover larger house needs/ emergencies (havoc, water heater, random ER other visits post copay, etc). I feel really bad reading here, so I try not to. 401k is decent, though, a bright light.
I'd like to go on a vacation. Once the second is in elem that will happen.
We are cutting cable tv to bring the bill down $50 a month.
Library not bookstores.
I buy clothes and shoes only if necessary. Same with DH.
We are no slouches, but we could never do this. Our HHI is $160 (non profit + gov't salary). Live in a small 2br condo, but our mortgage + reasonable condo fee is $2800. We got a GREAT deal on our place and don't need a car. Hardly saving for retirement. We don't buy clothes, haven't been on vacation in 4 years, go out to eat 3x/mo. We are not saving money. I haven't bought a new coat in 5 years and I haven't bought new shoes in 2. And we can't wait to have a #2 because I'm old. But guess what, we're doing it anyway. My parents were flat broke when they had my sister and they are very comfortable in retirement. I'm hoping that once the kids are in school we can continue to live frugally and squirrel away tons of money. The cost of living here is really starting to grate on me.
Anonymous
10/27/2014 22:21
Subject: How do people afford kids?
Anonymous wrote:Ha! 1/4 to 1/5 of take home?? So seriously, in our case that's 800 per month for us after retirement and insurance premiums. Not happening. Where do these misers live?
MoCo. $2600/mo mortgage.
Anonymous
10/27/2014 22:21
Subject: How do people afford kids?
We can't afford our kids. Oh well.
Anonymous
10/27/2014 22:15
Subject: How do people afford kids?
Anonymous wrote:Well, you don't need $2k per month on care. You can find that for less.
We bought a really small TH so we could stay at 1/4 gross, now with salary increases it is 1/4 take home. I regret often that we don't have a SF and a yard, or even a bit bigger TH but can't leave and really, I have a roof over my head so, I try to focus on that.
We don't eat anywhere fancy, cook most nights and bring lunch. We still struggle with giving up delivery and do spend to have Friday Night pizza or Chinese or Italian. I try to push for pizza since it's cheaper.
Haircuts at $50 every three months are a splurge.
Stagger kids so only have one in care at a time.
Savings are meager, sad, but enough to cover larger house needs/ emergencies (havoc, water heater, random ER other visits post copay, etc). I feel really bad reading here, so I try not to. 401k is decent, though, a bright light.
I'd like to go on a vacation. Once the second is in elem that will happen.
We are cutting cable tv to bring the bill down $50 a month.
Library not bookstores.
I buy clothes and shoes only if necessary. Same with DH.
You are my hero! I imagine half of the DCUM readers are also in your shoes but too afraid to speak up on this site. Not everyone saves one income, maxes out 401Ks, and has a giant emergency fund. But the people who do, love to brag about it...