Finances and reduction of income

[Radiohead1]

So we are expecting our 3rd baby in April (yay!) but sort of have a financial crisis because of this.

My wife Carries the family health insurance ($1,100 a month) and only brings home about $400 biweekly as a result. Daycare for an infant is likely to run somewhere in the $175 to $200 a week range, so if she stays working we will basically net $0 from her income. I am not offered insurance thru my employer so we are weigh in if it even makes sense for her to stay employed. The alternative is us going back to the exchange for health insurance. I am actively looking for a new job but not sure when that will pan out. Best case scenario I can replace half of her income ($24k a year).

If I run the budget with her staying at home we run an approximately $900 deficit each month. This would obviously be made up if I am able to increase my income by $12k. If I can't, we are obviously in a huge pinch. I have a chronic illness (ulcerative colitis) so I run up to our family deductible each year ($3k).

Not sure where to pull back on the budget to make up this deficit. We don't have any frills other than sling tv ($25 a month) and dropping that obviously won't make up our shortfall. We never eat out and have a good budget of $600.

I am an architect and make $50k a year. After taxes it comes to around $40k. Obviously if my wife stays home we would likely see an immense reduction in tax liability and probably get back more than we pay in due to EITC and trumps new tax plan (which I am not a fan of being subsidized by the federal government at that level even though it doesn't make financial sense to reject that assistance).

I could post my full budget for assessment. Other than the medical costs, our biggest anchor is debt (monthly payments of $275 for student loans, $265 on 1 car and $175 on a credit card). The car has 18 mos, the student loan 54 mos and obviously the credit card balance of $7500 is revolving. Our mortgage is $690 and my car is paid for.

I appreciate any input.

[disneysteve]

Welcome to the site. Congrats on the upcoming baby.

Do you have a good idea of how much insurance will be if you have to buy it on your own?

Do you have any savings?

You say you think you can make an extra 12K. If so, you should be doing that whether she continues to work or not. If nothing else, it would help you wipe out your debt which would give you a lot more breathing room in your budget.

Posting your budget can't hurt but if it is as lean as you say, the main answer here is going to be to do everything you possibly can to boost income.

If you wife stays home, can she babysit for another kid or two to bring in some money? Can she do anything else from home to generate income? Any sort of craft she can monetize or sell items online?

[Thrif-t]

She probably needs to keep working for the insurance even though you will net 0, and then when/if you can get another/better job with benefits then you can reassess her staying home. Stinks I know but that is probably your best bet even though I'm sure you don't want to hear that, I'm sorry.

But congrats on the new baby

[~bs]

So we are expecting our 3rd baby in April (yay!) but sort of have a financial crisis because of this.

My wife Carries the family health insurance ($1,100 a month) and only brings home about $400 biweekly as a result. Daycare for an infant is likely to run somewhere in the $175 to $200 a week range, so if she stays working we will basically net $0 from her income. I am not offered insurance thru my employer so we are weigh in if it even makes sense for her to stay employed. The alternative is us going back to the exchange for health insurance. I am actively looking for a new job but not sure when that will pan out. Best case scenario I can replace half of her income ($24k a year).

If I run the budget with her staying at home we run an approximately $900 deficit each month. This would obviously be made up if I am able to increase my income by $12k. If I can't, we are obviously in a huge pinch. I have a chronic illness (ulcerative colitis) so I run up to our family deductible each year ($3k).

Not sure where to pull back on the budget to make up this deficit. We don't have any frills other than sling tv ($25 a month) and dropping that obviously won't make up our shortfall. We never eat out and have a good budget of $600.

I am an architect and make $50k a year. After taxes it comes to around $40k. Obviously if my wife stays home we would likely see an immense reduction in tax liability and probably get back more than we pay in due to EITC and trumps new tax plan (which I am not a fan of being subsidized by the federal government at that level even though it doesn't make financial sense to reject that assistance).

I could post my full budget for assessment. Other than the medical costs, our biggest anchor is debt (monthly payments of $275 for student loans, $265 on 1 car and $175 on a credit card). The car has 18 mos, the student loan 54 mos and obviously the credit card balance of $7500 is revolving. Our mortgage is $690 and my car is paid for.

I appreciate any input.

200/week *52 weeks is $10,400. If she works full time, she should make more than this? Won't she need to be working as well to get insurance through her company?

If parents/grandparents babysitting for a few years isn't an option, then I think she should work full time. And possibly you working more hours or taking a second job. There's an old saying, you can't squeeze blood from a turnip. If your budget is down to "essential costs" and debt service, and there's nothing else for you to cut, then the only real alternative is to increase your income.

[Gailete]

It is a bit of a quandary because of the health insurance. For a family of five it is imperative. So you need to figure out how much it would cost for the 'affordable' health care which should really be called the 'unaffordable' health care. The problems is, unless you get a huge reduction to your insurance being only a couple hundred a month you are still, from the sounds of things, going to have trouble having enough to pay for it.

You didn't mention if your other two are in school yet or needing paid daycare, but you wife doing day care from your home can be a viable alternative. I used to be certified by my county to be a home day care mother, where as long as I gave them proper meals, I would be reimburse for food allowances and I would get paid for each child by the county. The parent would pay the country directly based on a sliding scale. At the time I was doing this, it was the early 80's and I made $1000/month and also got toys to use as needed but to give back when I quit doing it. I eventually went on and became an RN making a whole bunch more money. But if these programs are still available it is a possibility that she could do this, or you may find that your income, makes you eligible to have your kids in the program at a much reduced price from average.

Also be sure to look into the WIC program https://www.fns.usda.gov/wic/women-i...d-children-wic
I could have kicked myself once my kids were a bit bigger to find that I was probably eligible for the program. I thought you had to be on welfare to get it, but not so. You can also check into the SNAP program (food stamps). To get the stretch you need in the budget. I know that many don't want to use these sorts of things to get the help they need, but remember they are there and available due to your TAXES THAT you PAID.

I generally wouldn't even bring those programs up, but it does seem as if your family is super tight in finances already. While some things can't be decreased any more like mortgage (which yours is low - almost what we pay). However, you can double check your car and fire insurance policies to see if you can get them decrease. I just saved a bunch by changing car insurances and I still have to settle on a fire insurance for our house. Currently looking into one that is $800 less than what we have been paying. Of course, finding some extra work is a good idea as well if possible.

[Radiohead1]

It is a bit of a quandary because of the health insurance. For a family of five it is imperative. So you need to figure out how much it would cost for the 'affordable' health care which should really be called the 'unaffordable' health care. The problems is, unless you get a huge reduction to your insurance being only a couple hundred a month you are still, from the sounds of things, going to have trouble having enough to pay for it.

You didn't mention if your other two are in school yet or needing paid daycare, but you wife doing day care from your home can be a viable alternative. I used to be certified by my county to be a home day care mother, where as long as I gave them proper meals, I would be reimburse for food allowances and I would get paid for each child by the county. The parent would pay the country directly based on a sliding scale. At the time I was doing this, it was the early 80's and I made $1000/month and also got toys to use as needed but to give back when I quit doing it. I eventually went on and became an RN making a whole bunch more money. But if these programs are still available it is a possibility that she could do this, or you may find that your income, makes you eligible to have your kids in the program at a much reduced price from average.

Also be sure to look into the WIC program
I could have kicked myself once my kids were a bit bigger to find that I was probably eligible for the program. I thought you had to be on welfare to get it, but not so. You can also check into the SNAP program (food stamps). To get the stretch you need in the budget. I know that many don't want to use these sorts of things to get the help they need, but remember they are there and available due to your TAXES THAT you PAID.

I generally wouldn't even bring those programs up, but it does seem as if your family is super tight in finances already. While some things can't be decreased any more like mortgage (which yours is low - almost what we pay). However, you can double check your car and fire insurance policies to see if you can get them decrease. I just saved a bunch by changing car insurances and I still have to settle on a fire insurance for our house. Currently looking into one that is $800 less than what we have been paying. Of course, finding some extra work is a good idea as well if possible.

I was looking at auto insurance and food as the two ways to scale back in the budget.

Medical costs are also ridiculous and could strangle us. With the really good health insurance that we have right now, I walked in to get a prescription on Friday and it was going to be $350 for a 30 day supply.

40-50 years ago did people with professional degrees and 10 years of experience have to worry about feeding their families?

[Gailete]

I was looking at auto insurance and food as the two ways to scale back in the budget.

Medical costs are also ridiculous and could strangle us. With the really good health insurance that we have right now, I walked in to get a prescription on Friday and it was going to be $350 for a 30 day supply.

40-50 years ago did people with professional degrees and 10 years of experience have to worry about feeding their families?

Unbelievable! I spend a lot of time at CVS because I take a lot of meds and also it is the only blance in the store that I can sit down. The staff are used to me sitting there and will ask if I need a prescription or if I am ready to stand up yet! But that means I see and hear a lot. People being totally gobsmacked at the price of their meds and then other ones getting them for free or like $2 and then the next one is through the roof. Only that 1% in our country would be able to routinely pay $350 for a 30 day mediation suppy.

My goal this year was to increase incoem and decrease expenses. I got a different prescription D plan from Medicare. I was supposed to run me $1K less that the one I had last year. I'm always surprised when there is no charge on some of the meds, that I have had co-pays on for years.

So my savings are thatt $1K, plus I have already swapped car insurance and saved $800/year! I still have to check and get the final details in place for the fire insurance for our house and rental properties as well. Then I have to see what else we can decrease.

Take advantage of free programs. My electric carrier offered a free electric audit. As part of it they gave us a new surge protector, a carbon monoxide monitor which we didn't have prior. Then the other day, from another thing I noticed they were giving out for free; I got a gox with 3 nightlights that are automatic, a 3-way lightbulb, 100watt, 75 watt and 4 60 watts, all those new kind of expensive bulbs. Check with your electric supplier to see if they have any freebies. This is the second box we have gotten from them with goodies in it. No strings attached. Our fees help pay for this. You could even call your supplier to see if they have programs like this. I'm not sure how much those lightbulbs cost, but that is a savings from having to PAY for a new lightbulb when one blows and they help keep electric costs down as well.

Along with free goodies, I know in my area I have electric suppliers that you pay less per kw with them. One program I was in, I got something like a $35 Visa card to spend as we liked from them for using their product.

Just don't lose track of this different programs and at least check into them. It may take some time, and some might seem insignificant, but every little bit helps.

[scfr]

40-50 years ago did people with professional degrees and 10 years of experience have to worry about feeding their families?

In many cases, yes.

[~bs]

That long ago, there was a lot less competition, and any bachelor's put you ahead of most of the population. Nowadays, much much more people have degrees, which watered down the value. All it did was increase the educational baseline for many jobs. The new high school diploma. That's the sad part of pushing everyone towards higher education, in reality, you're likely not making everyone better off. Some are better off, others have a worthless or no degree and a bunch of debt.

[Snydley]

Your health insurance costs are absolutely awful. I am so sorry. If I were you I'd consider moving to a new area if that would help. Your salary seems low for an architect.

[Radiohead1]

Your health insurance costs are absolutely awful. I am so sorry. If I were you I'd consider moving to a new area if that would help. Your salary seems low for an architect.

I thought so too, but I interviewed in other states and they were offering a similar salary. 6 years of school and you make an average of $55k. I wouldn't recommend it.

[TexasHusker]

I would ditch the car with payments and drive a clunker. Car payments keep people in the poor house. That would free up some cash. And with a clunker, you only need liability insurance, which frees up more cash.

[TexasHusker]

40-50 years ago did people with professional degrees and 10 years of experience have to worry about feeding their families?

You know this already and are trying to deal with it, but your monthly debt of $740-ish (not including your house) is a big bogey.

I'm having a hard time figuring out what your gross combined pay is per year, but you've got $8900 per year already spoken for in debt, not including your house payment.

It's a large percentage of your income.

[disneysteve]

If I run the budget with her staying at home we run an approximately $900 deficit each month.

It would help this conversation a lot if you post your budget. We don't know exactly what you earn and we don't know what you spend.

[Radiohead1]

It would help this conversation a lot if you post your budget. We don't know exactly what you earn and we don't know what you spend.

1st one is our current income

2nd is down to 1 income