Preperation from two to one incomes

[Eagle]

1. Mortgage, Car Payment, and Groceries:
A. Once DW's income stops coming in, yes the mortgage rate to income will look pretty high . We bought our home in 2008. We will need to look into the refinancing because I'm not sure if it would help us our not.

B. To pay this off we would have to use up EF money which we figured was probably a bad idea?

C. We are going to try to get this cheaper by couponing. She eats very healthy.


2. Other Expenses not included:
A. Thank you I will read this.

B. Car insurance is included in my budget under insurance. Car maintenance needs to be a category that we don't currently have. Baby doctor visits are 100% covered from 0-6, we will just have to worry about me and DW.

3. Bottom line:
A. I am in school working on finishing my bachelors degree which I will hopefully be finishing in the next few years but until them I have a good paying job without using the degree. I currently am at around 38K/year, will be at around 43K/year by December at my current job. This is before taxes though.

B. This is something we are looking into.

C. Will do.

D. Not possible they are family. We would never get rid of them no matter what the expense was. You don't get rid of a family member because of an illness or problem which requires an additional expense.

1A. From what I remember 15 year notes on average mortgage rates were about 5.3% to 6.5% in 2008. 30 year notes were 6% to 7%... Last year we financed our house for 4.625%. I agree with MonkeyMama. Definitely look into it while you still have both incomes.

1B. Car payment
Probably a bad idea to use the EF money. If your wife works though for 2 more months perhaps strip expenses to the bare bone and use her income to pay down the car?

1C. Groceries
Couponing is a good idea. Good deal that eats healthy. Organic foods always cost more but in the long run are better for both Momma and Baby.

2A. Alright. Let me know what you think.

2B. Insurance
Sorry I missed that spot about the car insurance. When was the last time you got a quote on car insurance? How old are your vehicles? You have excellent medical insurance which will really be helpful.

3A. Income.
The bachelors should be helpful. 43k is still what $2500 take home a month? What kind of hours do you work? Possible to get a 2nd job? Is your wife going back to work after the 3 or 4 month period? Is she getting her old job back? Will you pay child care or will the baby stay with a relative?

3B. Phone.
MonkeyMama’s suggestion is good on Ting. If you can’t go with a provider like that then perhaps get the cheapest plan available with your current phone provider?

3C. Internet.
We did this with AT&T several times. Got them down to $25 a month. They wanted us to pay $45 or $50 a month… Yeah right. A&T has a whole department called “customer retention” that you can negotiate your bill.

3D. Dogs.
I understand the sentiment. That is $1500 a year that you are spending on dog food alone. That doesn’t include shots or other expenses related to pets not included in your budget. Puppies cost typically $900-1500 in shots a year for the first year. Every year after that from what I understand “adult” dogs cost anywhere from $500-700 in shots. This doesn’t include water/food bowls, tags, crates, toys, treats, etc. That could easily be $2500 a year on the dogs. I realize that dogs or cats are like family. But you can’t afford them with your current/near future household income. But that is something you and your wife will have to come to terms with. Or somehow sacrifice other areas of the budget to keep them. (Note: If wife is going back to work then perhaps this isn’t as big of a deal. I was assuming she was going to remain a SAHM.)

4. Personal Loan.
Do you think you could ask a family member to lend you the money for the car and pay them back with no interest or lower interest? How much interest are you guys paying on the vehicle? I know this is not ideal but thinking outside the box here.

[JoeP]

Your gas line item will presumably be less, with only one commuting.

Get yourself a new insurance quote. You might be surprised how much you can save.

Do you have life insurance? You'll want term so that you can provide for your survivors.

[ourfirsthome]

1A. From what I remember average mortgage rates were about 5.3% to 6.5% in 2008. Last year we financed our house for 4.625%. I agree with MonkeyMama. Definitely look into it while you still have both incomes.

1B. Car payment
Probably a bad idea to use the EF money. If your wife works though for 2 more months perhaps strip expenses to the bare bone and use her income to pay down the car?

1C. Groceries
Couponing is a good idea. Good deal that eats healthy. Organic foods always cost more but in the long run are better for both Momma and Baby.

2A. Alright. Let me know what you think.

2B. Insurance
Sorry I missed that spot about the car insurance. When was the last time you got a quote on car insurance? How old are your vehicles? You have excellent medical insurance which will really be helpful.

3A. Income.
The bachelors should be helpful. 43k is still what $2500 take home a month? What kind of hours do you work? Possible to get a 2nd job? Is your wife going back to work after the 3 or 4 month period? Is she getting her old job back? Will you pay child care or will the baby stay with a relative?

3B. Phone.
MonkeyMama’s suggestion is good on Ting. If you can’t go with a provider like that then perhaps get the cheapest plan available with your current phone provider?

3C. Internet.
We did this with AT&T several times. Got them down to $25 a month. They wanted us to pay $45 or $50 a month… Yeah right. A&T has a whole department called “customer retention” that you can negotiate your bill.

3D. Dogs.
I understand the sentiment. That is $1500 a year that you are spending on dog food alone. That doesn’t include shots or other expenses related to pets not included in your budget. Puppies cost typically $900-1500 in shots a year for the first year. Every year after that from what I understand “adult” dogs cost anywhere from $500-700 in shots. This doesn’t include water/food bowls, tags, crates, toys, treats, etc. That could easily be $2500 a year on the dogs. I realize that dogs or cats are like family. But you can’t afford them with your current/near future household income. But that is something you and your wife will have to come to terms with. Or somehow sacrifice other areas of the budget to keep them. (Note: If wife is going back to work then perhaps this isn’t as big of a deal. I was assuming she was going to remain a SAHM.)

4. Personal Loan.
Do you think you could ask a family member to lend you the money for the car and pay them back with no interest or lower interest? How much interest are you guys paying on the vehicle? I know this is not ideal but thinking outside the box here.

We will look into the phone idea, internet, refinancing and check for better car insurance. I think these options along with changing my W4 will bring us some extra income that will help us through these next few months as neither of us wants to touch the $10,000 we have for our EF. DW will be going back to work in 3-4 months or when she is ready. She works from home so no childcare will be needed.

[doingitallwrong]

On the issue of withholding, the IRS has an online withholding calculator that will give you an idea of what you should be claiming on your W-4.

http://www.irs.gov/Individuals/IRS-Withholding-Calculator

[ourfirsthome]

Your gas line item will presumably be less, with only one commuting.

Get yourself a new insurance quote. You might be surprised how much you can save.

Do you have life insurance? You'll want term so that you can provide for your survivors.

DW works from home so I am the only commuter . I will look into some new quotes on auto insurance. I don't have life insurance.

[ourfirsthome]

On the issue of withholding, the IRS has an online withholding calculator that will give you an idea of what you should be claiming on your W-4.

http://www.irs.gov/Individuals/IRS-W...ing-Calculator

Thank you and after the suggestions above, I see that changing my withholdings will help give us more on my paychecks which I am going to fill out and change this week. This is an easy no brainer in my eyes to increase my paychecks.

[hamchan]

She works from home so no childcare will be needed.

It depends some on what she does, but this may not turn out to be the case. Getting actual work done while also being the full time caregiver for a baby or young child is often impossible. Most moms who work from home will need some additional child care.

[Snydley]

It depends some on what she does, but this may not turn out to be the case. Getting actual work done while also being the full time caregiver for a baby or young child is often impossible. Most moms who work from home will need some additional child care.

It's pretty much impossible to work from home with a baby with no help. Believe me, I tried.

I LOVE TING for phone service. My bill (2 lines) went from $105/mo to $41.00. Got used phones on ebay for ~$20 each.

Try a sample of flint river ranch for dog food. It's not cheap but it's probably less than what you are paying. No fillers and artificial stuff. http://www.flintriver.com/

[Eagle]

We will look into the phone idea, internet, refinancing and check for better car insurance. I think these options along with changing my W4 will bring us some extra income that will help us through these next few months as neither of us wants to touch the $10,000 we have for our EF. DW will be going back to work in 3-4 months or when she is ready. She works from home so no childcare will be needed.

Please forgive me if I overstepped my bounds with the whole dogs thing? I do apologize.

Very nice as to this in bold! Okay then so really this is more of a temporary change. That's nice that she works from home.

I have a cousin who does this and has a Nanny come 3 times a week. Working from home with a baby is rough.

[ourfirsthome]

Please forgive me if I overstepped my bounds with the whole dogs thing? I do apologize.

Very nice as to this in bold! Okay then so really this is more of a temporary change. That's nice that she works from home.

I have a cousin who does this and has a Nanny come 3 times a week. Working from home with a baby is rough.

It's ok, our dogs mean a lot to us .

Yes, we are very thankful DW can work from home!

[Weird Tolkienish Figure]

It's ok, our dogs mean a lot to us .

Yes, we are very thankful DW can work from home!

Get rid of one car if you can.

If you have saved 8K, then raise your deductible to this amount, or get rid of collision insurance altogether if the car isn't worth that.

[ourfirsthome]

Get rid of one car if you can.

If you have saved 8K, then raise your deductible to this amount, or get rid of collision insurance altogether if the car isn't worth that.

We have thought about this but figured that if an emergency came up or my car had problems we have the 2nd car.

[ourfirsthome]

Going with the $38,000 figure, I project about $500 Federal taxes you will need to pay for 2014. You have to factor what wife will make too, but you can really back off the tax withholding and have her pay "second income" taxes if she goes back to work. I am guessing you already paid in $500 Federal taxes for the year (From your own paycheck). But, unfortunately, you can't rachet your withholding down to $0. I would claim something like 8 exemptions. See what that does to your paycheck. (Child tax credit is equivalent to 2 exemptions. You will have 3 literal exemptions. Plus, standard deduction is worth like 3 more. That is how I get to a total of 8). 5 is conservative (like if you prefer a tax refund). 8 is aggressive (more breakeven). I don't want you to owe tax next year. But no point paying in taxes that you don't need to, while income is tight. You have probably way over-withheld the first few months of the year, as most people tend to do that anyway and you have large tax changes this year. {If you claim 5-8, then wife should claim zero}.

If you have 401k contributions, your income taxes will likely be *zero* on just your income. I assumed no other income or deductions.

Good Luck!

I submitted a new w4 today and withheld 7. What's the best way for me to see if this is a good number to stick with or if I should lower it?

[LivingAlmostLarge]

What's your total income and is the house expensive on two incomes?

[Gailete]

When I first saw your post, I too thought you meant your wife would be off work as a stay at home wife more or less permanently. If she is returning to to work then your budget is doable for the short term with what you have in your EF. But if she doesn't want to return to work, you have no wiggle room at all for the long run as many of the categories that should be in a budget are missing from yours including health insurance that if you are in the US is now the law (as a gentle reminder). If you don't sign up, and currently it is too late I believe, you will be fined on your taxes next year.

When I looked through your expenses, what I saw there was three people are going to be trying to live on what my one son makes in take home each month and his budget is stretched super thin and it is just him. He pinches pennies till they scream. Clipping coupons isn't all it is cracked up to be if you don't have access to a newspaper and the coupon inserts. You can download some from the internet, but I know some stores in my area won't let you use computer generated coupons.

You are obviously planning on using cloth diapers and breast feeding since those items weren't budgeted for. If you plan on disposables and formula you need to budget probably close to another $200 a month. Cloth compared to disposables are cheap and nursing is best for baby. With your wife going back to work at home she should be able to continue to breast feed if that is what she plans, but working at home, unless doing childcare, can be difficult depending on what her job is. She will most likely be missing sleep at night due to feeding the baby until it sleeps through the night, so working at home full time and taking care of the baby while working may make her feel like a juggling act and she will need your support and help.

Hope all goes well with the birth and your little one. Children are a blessing.