The Parents’ Budget: How Your Budget Changes After Becoming a Parent
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Ladies, let’s talk BUDGET. Mine has changed after having a kid (and definitely after my second) — how has yours? Do you miss the days of being a DINK? Are you going into debt for childcare (i.e., paying to work)? Is the money coming from savings? Credit cards? If you’ve made cuts for your budgeting, how keenly do you feel them?
For my $.02: I remember hearing a lot while pregnant about kids and budgets, and to be honest, it was all noise to me. I just didn’t get it — I thought people were talking about diapers or toys or something. (I’ll wait while you catch your breath from laughing so hard.)
Psst: We always used to call money discussions “Tales from the Wallet” at Corporette — so we’re continuing the tradition here! Pictured – love this wallet from Brahmin!
Obviously, childcare is the tremendous expense I didn’t foresee — but other things add up, like classes (preschool and extracurriculars), food (damn those $1.40-per-pouch babyfoods), and yes, the ever-present need to purchase a seasonally-appropriate wardrobe that fits.
Today we barely miss some of the things that we cut down on or eliminated from our budget (e.g., vacations, dinners out, couples’ massages, etc.) because logistically they’re almost always off the table now in terms of time/energy/research.
Some expenses we self amortize, which helps take the sting out of expensive purchases. I’ve set up special savings accounts in Ally (which has high interest rates for savings, too) with names like “JAG Classes” and “Dental Fun,” and we contribute a set amount each month to those accounts. Then, when we suddenly decide to spend $700 for a karate class, we just move the money over. (Yay, New York!)
Ladies, how about you — how much sting are your budgets feeling during these first years of parenthood? Moms to older kiddos, does it get better? In general, what methods have you found to make the budget easier? Do you take solace in any sayings or words of wisdom (e.g., “the pain is temporary”)?
Pictured: Deposit Photos / Dualshock. Animal print wallet: Rebecca Minkoff ‘Ava’ Zip Wallet, available at Nordstrom for $110; was $165.)
I commented above and realize this thread may be dead, but how do we make this work? Costs are exorbitant and rising. None of us want to compromise on quality of care. When is it worth it to stay home? To find creative arrangements? I’m really struggling with these questions.
For frame of reference our gross household income is $170k and our mortgage + childcare (an infant and 4 yo) alone will be $4250. It just doesn’t seem doable. We have a 15 yr mortgage but I wonder if we refinance? Do I stick with the job I hate?
In our LCOL area, we pay around $800/month for one child and will soon be paying $1,400 for two. We will most likely have to cut back on all “extras” and reduce or eliminate contributions to savings, aside from 401k &529s. I am on the fence about an eventual 3rd child, but I don’t see how we could afford it… at least not if we ever want to retire or help pay for even a portion of college.
This thread has helped me to stop bitching and moaning. We are in a small, rural area (State College, PA) where daycare for one infant is $800, and with two (infant + toddler) I’ll be paying $1425 at the end of this year. I cried and couldn’t breath when I came to the realization of how much this will cost. Thankfully, though, we live in a top-rated school district in our state, and so public K-12 is a great option here, with tons of opportunities, much like the schools that my husband and I attended. If we were in an area with a school district that didn’t fit my requirements, I wouldn’t think twice about putting my kids in private schools for K-12.
I also feel “normal” now knowing that others with small kids have had to put their savings plans on hold for the time being. I used to be a savings queen. After selling my first home, we put a large-ish (well, large to me) chunk of money away as our emergency fund, primarily because we watched too many Suzie Orman shows. I’m glad we did, though, because in the last 2 years we haven’t saved any extra money. I’d normally be freaking out by our lack of savings, but at the very least I know that we have some money there if needed. We don’t touch it – not for vacations or cars or anything. It’s my way of feeling as though we have some control over our finances while we’re raising 2 small children.
I spend $2k a month on childcare for my newborn and 2 year old. My mother lives 45 minutes away, and since I had the baby she takes my 2 year old for a couple nights a week (he adores her and vice versa) and she has contracted with a day care in her town so that she gets a break during the day. Ladies – this daycare is an incredible place – with airtight security, a huge playground and large “tent and tunnel room” for bad weather, nutritious meals (breakfast, snacks and lunch), thorough curriculum (6 activities a day – 2 gross motor skills, 2 creativity, 2 ‘real life’ skills – like learning how to call for help and dial 911)… and it costs $660 a MONTH. It’s like the Holy Grail of child care. If I lived closer to my parents, I would switch. Small towns – gotta love them.
Daycare for an 18 month old @ 1800/month. Will be $3300/month when we have a second. For $3500/mo we can probably get a nanny and put the older one in 2-3 day/week preschool/nursery. We make a combined ~300k after bonuses, $260 before. That has only been our income for the past year or so; before that we were in and out of grad schools and working our way up. We are moving a little further out into the burbs of Boston than I would like to ensure we can afford 2-3 kids if we decide we want them.
We have a nanny for 35 hours a week ($700 a week for 3.5 yr old and infant) plus private preschool for toddler at $10k a year. So yeah I guess that’s around $4k a month. Yay.
HCOL area in Canada. We pay $1,300 per month for daycare – our second largest expense after our mortgage. Since we are lucky to have a basement suite that we rent out to a lovely family, basically our rental income pays for daycare. But before baby, that monthly rental income went straight into savings. Now, basically nothing is going into savings. I find that even though we aren’t going out as much as we used to, we are spending way more on groceries (because of buying pre-prepared food, which I never did before), so I don’t think we are experiencing any savings in that area either. A nanny is not an option because that would set us back about $2,200 per month – it becomes cost-effective only with 2 or more children.
The Canadian government pays families a child care benefit of $100 per month, per child. I find that indescribably ludicrous.
For reference, our joint income before taxes is about $230k.
We’re in a large southern city and pay a little more than $1100/month for all-day preschool. I feel like we could not afford a second child, even though husband and I are both full-time working professionals. I look forward to public school some day!!
I count my lucky stars that my husband is with a branch of the military, and that we qualify for on-base childcare. Because of that, we pay an extremely low $145/week for infant care. When she is older, we will likely be trying to get her into a charter public shcool that is basically a Waldorf school, or just using normal public schools. If she is gifted or needs specialized education for another reason, we will pay for that when the time comes.
Once she is in school, I will either need to adjust my hours to be home with her after school, or will need to leave work to bring her to base for after-school care. I’m also lucky that my job is very flexible and allows me to work from home or work less than FT hours as needed. I’m an hourly employee, so I only get paid for the time I’m actually working.
I am going home tonight to see how much it will cost to keep our nany from leaving. I’m wondering how much others pay their full-time nannies and how they do PTO for nannies. We left a center (which was substantially cheaper than the nanny) and love, love, LOVE having a nanny in our home. We’re having a hard time getting good candidates, and I’m wondering if we have to pay more/decrease our retirement contributions (le sigh). Also, love this community, but can anyone tell me what DH mean? I keep reading designated hitter to myself.
Daycare is 1440 a month for infant care and that amount will double if we put our second child in daycare too. It just isn’t in our budget though so we are hoping in-home care or a nanny for something like 2,000 a month instead. I wish someone had mentioned how expensive childcare would be because I should have started saving for this 15 years ago!
I live on the rural edge of southern suburban sprawl and thought that daycare would be very inexpensive in my town, so I was very surprised by the $1300/month price tag for infant care! Still inexpensive compared to more urban areas, but definitely not as cheap as I’d anticipated. Interestingly, 15 minutes away, across the county line (in the truly rural area), daycare would have been about $800/month. I thought DH was a little nuts to leave big law to rejoin the military, but one of the (few) awesome perks has been a daycare subsidy that reduces our bill by half. Because we’re able to live well below our means in our low COLA, our budget hasn’t been affected by the kid…but I’m sure that will change when we relocate to a more urban area.
Wow, I have a toddler in daycare and I totally forgot that, even once she is in public school, we’ll still have to pay for some sort of summer care. How in the world did I not realize that before?!?! So much for having a bunch of extra money in 4-6 years:)
We pay $1800 a month for one child (suburbs of a big city) – We are starting to talk about having a second child, but ~$3500 a month in childcare is going to be a stretch for us without having to cut back on our retirement savings. Right now, we max out our 401ks and pay an additional $2k a month for a whole life insurance policy. This probably won’t be a surprise to many of you who are wiser than I was when we bought the policy, but I honestly regret it (we also have tons of term insurance). When we bought it, we thought if it as a way to save for retirement – we bought the policy 3 years ago and have another 4 until we break even. So, if we had an emergency (job loss, sick kid) and had to stop paying the policy, we’d lose a ton of the money we already contributed. We have savings of course, but that would only last about 4-6 months.
I agree with Kat that some of the smaller expenses related to kids (clothing, diapers, etc.) have been offset by the fact that expensive dinners out, days spent at the mall, and spa days are a thing of the past (no time or energy, even if we had the money).
Being a DINK was the best….(sigh)
We currently have amazingly cheap daycare for our area at only $1200 a month. When baby #2 starts in a couple months, that will go up to $2750, a little more than what we were paying for a nanny when baby #1 was an infant… so not uncharted budget territory, but it’s still depressing that daycare will again be more than our mortgage. We still max out our retirement contributions, but this will nearly wipe out non-retirement savings. We’ve been saving aggressively for the last year to compensate for unpaid parental leave, and will still have a healthy emergency fund once we’re both back at work, but I hate that it won’t get much bigger for a while. My son is just now getting old enough for “activities,” so I really need to sit down and look at the 2-kid budget soon and make a line item for that.
Our combined income is comfortably middle class (ha! two six figure salaries= middle class), so like Kat said, we haven’t had to consciously cut back beyond the vacations and dinners out we’re naturally skipping for non-budgetary reasons. But even aside from daycare, I was shocked at how other expenses like “+family” insurance plans, extra life insurance added up. Plus we moved to a better public school district and now need a second car… Diapers are the least of my problems, although I am really looking forward to my son being potty trained sometime this year!