Any Fat to Cut?

[bmarie]

Hi there-

I'm new to this, but could use some help. My husband and I both work FT and have jobs we love and make ok money. We "own" a home, but are pretty underwater- but want to stick it out (5-year plan). We have one child right now (in daycare FT) and are expecting twins in the spring. Although it is close, it still makes sense for us financially to both continue to work FT once the twins come so they will both be in daycare as well. We currently have two car payments, but are going to sell one of them to save money. I feel like our spending is pretty bare bones- we don't really indulge in many luxuries and are pretty frugal for the most part, so I'm not sure there is much to "cut out", but any advice would be great. As is, our budget is looking very tight- like nothing left over... Fortunately we do have some emergency savings and plan to save our entire tax return to use as a cushion throughout the year as well. Either way, things are going to be tough...

Income (Net)
Me- $2,800
SO- $2,400
Total- $5,200

Spending/Bills
Mortgage/Insurance/Taxes- $1,400
Car Payment/Insurance- $300
Student Loans- $215
Gas/Electric/Utilities- $200
CC/Line of Credit- $100
Phone- $100
Internet/Cable- $40
Netflix- $10

Spending/Other
Groceries- $500
Gas- $100
Daycare (anticipated)- $1900

Total Spending= $4865

Thanks in advance for any helpful suggestions. I guess if need be, my hubbie could get a second job... but I have a feeling with twin infants and a toddler I will be needing the help around the house...

[MoneyTips4U]

It looks like you have your spending under pretty tight control. The one thing that sticks out to me is daycare, for $1900/month?

That is a lot. I am not familiar with daycare, but is $1900 the absolute lowest option you think? And don't get me wrong, you need to have trust in the group that take care of your kids, I understand that. They are worth every penny to be well taken care of. What are your thoughts on this?

[bmarie]

Honestly, yes. That is the cheapest for three kids. One infant in daycare in my area ranges from about $600/mo (in home provider) to $1200/mo (daycare center)... and we will have two infants plus our toddler/pre-schooler. We already go with the cheapest option of a good, in-home provider. It really does make me sick to my stomach to pay that amount each month for childcare... but I guess the way we see it is it's for just a few years and then that money will be freed up! Agh!

[MoneyTips4U]

There seems to be little you can currently cut in your budget, and I agree that your husband should not get a second job, but rather spend time at home.

Depending on your profession, perhaps you could do additional work out of your home when/if time is allowed. I write articles online, and recently was lucky to get on with a group that pays well for writing (more than $700/month for about 10 hours of work a week). Well, that's a good rate for me at least for online income. Perhaps your skill set can be marketed online for a good profit? That way you can work from home at times that are good for you, whether it be on weekends or evenings when you have little going on.

There are income streams online; you just have to know where to look for them. Any possibilities here?

[bjl584]

Hi there-

I'm new to this, but could use some help. My husband and I both work FT and have jobs we love and make ok money. We "own" a home, but are pretty underwater- but want to stick it out (5-year plan). We have one child right now (in daycare FT) and are expecting twins in the spring. Although it is close, it still makes sense for us financially to both continue to work FT once the twins come so they will both be in daycare as well. We currently have two car payments, but are going to sell one of them to save money. I feel like our spending is pretty bare bones- we don't really indulge in many luxuries and are pretty frugal for the most part, so I'm not sure there is much to "cut out", but any advice would be great. As is, our budget is looking very tight- like nothing left over... Fortunately we do have some emergency savings and plan to save our entire tax return to use as a cushion throughout the year as well. Either way, things are going to be tough...

Income (Net)
Me- $2,800
SO- $2,400
Total- $5,200

Spending/Bills
Mortgage/Insurance/Taxes- $1,400
Car Payment/Insurance- $300
Student Loans- $215
Gas/Electric/Utilities- $200
CC/Line of Credit- $100
Phone- $100
Internet/Cable- $40
Netflix- $10

Spending/Other
Groceries- $500
Gas- $100
Daycare (anticipated)- $1900

Total Spending= $4865

Thanks in advance for any helpful suggestions. I guess if need be, my hubbie could get a second job... but I have a feeling with twin infants and a toddler I will be needing the help around the house...

The first thing that sticks out is the fact that you will be getting a tax refund. Adjust your witholding status so that you reduce or eliminate your refund. This will give you more money per month throughout the year.

Groceries seem high for 3 people. Does this number include eating out, or is this all grocery shopping?

What is the $100 CC/Line of credit? Do you have credit card debt?

[bmarie]

Doing some work from home is potentially an option... maybe once we get into the swing of things and get a routine set with the babies.

As for groceries, yes that does include all food- we try to do about $100/week at the grocery store (I casually coupon), and do take out maybe once a week or once every other and each of us grabbing a cheap lunch at work on occasion. We pack lunches and cook at home 95% of the time.

Yes, I think that adjusting our withholding is probably a good idea- we always get a pretty decent $3,000-$4,000 return and have come to look forward to and rely on that- I know that it's not really a good habit!

Thank you!

[bmarie]

Oh, and in regard to the line of credit- it will be paid off within the next 6 months and we have minimal credit card debt that we generally pay off monthly. But combined, right now we pay about $100 month overall to these other debts. Our goal is/was to have all of it gone by the time the babies come- it will be close!

[esb3357]

Have you though about hiring a nanny or an aupair. At 1900 a month, that is 475 a week. I know an aupair is 350the aweek althouhh they live with you. In our area nanny a nanny at $400 is pretty high. Since you will be paying so much you probably can pay the same amount and have them come to your house.

[sweetlady2k]

Have you though about hiring a nanny or an aupair. At 1900 a month, that is 475 a week. I know an aupair is 350the aweek althouhh they live with you. In our area nanny a nanny at $400 is pretty high. Since you will be paying so much you probably can pay the same amount and have them come to your house.

This was my recommendation also. If your paying room and board you don't have to pay much. I had a friend from England who was an aupair and watched 3 children for room and board plus 200 a week. This is a great job for college students you just need to look for the right one. Or even a stay at home mom looking to make extra money?

[kaleida]

Doing some work from home is potentially an option... maybe once we get into the swing of things and get a routine set with the babies.

This is totally a side tangent, but it annoys me when parents think it's possible to "work" from home and take care of babies at the same time. Work probably only gets about 20% of their attention. Yet they want to be paid the same amount per hour as someone who's in the office focusing 99% on work. That's just not fair.

Sigh...that's all I had to say

I vote for hubby to stay home with the kids ... his income minus child care minus taxes and other work-related expenses is probably pretty close to zero anyway. Plus the world needs more stay-at-home dads to even things out!

[esb3357]

I have always believed that if you want to continue working/can than child care is an investment. That although it might not make financial sense to work in the very beginning over time as you earn promotions and your children get older you take home more money. I would honestly look into a nanny. It will make your life easier because you will not have to cart little kids around before and after work. Nor would you have to take time off when they are sick or need to go to appointments.

If you and your husband can flex your hours a little bit (work allowing). You could increase your hours with your kids and decrease your child care if you hire an hourly nanny. Plus you would still have time to see eachother because you shifts are not totally opposite. Ie one person work 7 to 3:30pm and the other 9 to 5:30. Depending on how far you are from work your kids would only have to be with a nanny from 8:30 - 4. 7.5 hours. If you paid a nanny $10 an hour (a reasonable rate here in Virginia beach ). you would only have to pay for 37 hours or $370 a week. Almost an $100 savings from your current child care route.

Care.com and sittercity.com are great sites to look for a care giver. If you live near a college there are a lot of students in education masters program that would probably be more than willing to work those hours. If I was in your situation, I would probably look into a nanny/interview before signing a contract or obligating myself to your current day care.

If you did find a nanny you could always ask them to do light housekeeping while the children sleep. Maybe during these first 4 years or so, your income is less. Enjoy this time with your kids and take advantages of some of the benefits of paying some much. Nanny, housekeeping help and maybe even cooking. Taking advantage of these benefits when you already are paying alot in child care. Will allow you to keep your grocery bill down because you are always eating at home. You can then enjoy your family time and plan cheap/free activities. You might not have alot of fun money but make the lemonaids (high childcare costs) into lemonaid (nanny/houskeeping/cooking) help.

[PatientSaver]

$100 a month for the phone sure sounds like a lot to me! Even $40 for cable sounds like a lot. the basic plan here only costs about $15 a month, but I gave up even that as I'm underemployed.

[bmarie]

A nanny sounds nice and we have looked into it. Around here (major metro area) a nanny runs $15-20/hour. Even if we flexed our hours a bit, it would put us way above budget. My husband was laid off for 6 months last year, home with our son and loved it. Then he basically found his dream job, so while he is not opposed to being a stay home dad, we really think it's in his best interest (an investment as previous poster stated) to keep his job. As for hiring an au pair, we've also looked into that... But that quickly came to an end when we learned you need to provide housing for them... We are already going to be squeezing the 5 of us in our small 2-bedroom home!

I really don't think $40 is a lot for cable AND Internet. Our cable is as basic as it comes and $15/mo. The phone bill could be lower but we upgraded our phone and plan prior to finding out we were expecting- and we obviously weren't anticipating two more!

I really do appreciate all if the tips and suggestions! It gives me a lot to think about.

[snafu]

I add another voice to check out au pair, these are often foreign college students from England, Ireland or Holland who are experienced child care providers and speak excellent English. I know there are childcare providers from less advantaged countries who want room and board & small 'allowance.'

[Tree0164]

You need to find cheaper daycare-I totally understand the cost but one of you is simply working to keep the kids in daycare. Do either one of you have any flexibility in job hours to work opposite shifts so the costs could go down.