Financials

Thank you all for your thoughtful and supportive comments and suggestions. I started a conversation with Mi.Vida about all this and I hope that we can work out something that makes us both feel better about it. Mostly I am no longer content to just give up, I’m going to see what we can do to make it better.

Now, onto the thrilling topic of making it work financially with two kids under four (in a crazy expensive city).

Now I know I’ve written a lot about how much is sucks that I don’t have the choice to be a SAHM, but honestly, at this point I’m pretty sure that I would not be the best candidate for the position. Sure it’d be nice to have the choice but I’ve come to terms with the fact that if I had said choice, I would probably choose to work, at least a three days a week. I no longer envy SAHM’s for having what I can’t have, in fact I think they have a harder job of it than I do in a lot of ways. Especially when they have two kids; all day at home with TWO CHILDREN?! Now that is some challenging shit.

But there is one thing about the SAHM life that I do envy, and that is how much easier it seems to be to integrate a second (or third) child into the family, financially speaking. If you are already providing childcare (and not bringing in a paycheck) it’s not a big financial strain to add another child to the mix, at least it doesn’t cost the family anymore child-care wise and you don’t have to accommodate scaled down hours and less pay. (Of course the cost to a mother’s sanity is a whole other post).

For us, the cost of a second child is going to be incredibly difficult to manage. We are so lucky to have family helping out, but even with that help, a second child will still put a significant strain on our family.

My hope, when I first started trying to have a second child, was that I’d take a year off and stay home with both my children, while also finding enough tutoring gigs to bring in $1,500 a month. I realized last year that I wouldn’t be able to get that much tutoring (let alone have the energy to tutor after being home with two kids all day) and that we’d be totally screwed trying to make it on my partner’s salary alone.

Who knows, maybe I’ll still try to do that in a year, but I doubt it. I just don’t think the year of being home is in the cards for me. And honestly, that is probably best for the best, both financially and for my mental stability.

Either way, this coming school year our plans are set. I’m working 80%. That means I teach four periods a day (instead of five) and can head home by lunch. It also means I make 80% of my salary and 80% of my benefits. I’m working until the baby is born, in mid-October. That means I’ll get three paychecks before I go on maternity leave. Then I’ll probably get one small paycheck in November (from the small remainder of my paid leave) and nothing in December or January (when I’ll be off on FMLA leave with no pay). February will be a pretty small check again because they will have to take out all my 125b and 403b contributions from the months I wasn’t getting paid. So we’re talking about four months with basically no pay. And of course, this is after three months of only 80% of my salary and going back to 80% of my salary.

When we bought our house over a year ago, we knew what we were getting ourselves into. We’re pretty house poor at this point and that’s okay. When I’m working full time and we’re paying $1,200 a month in childcare for Isa (a very reasonable rate for where we live), we do well. This year, paying that amount in childcare when I’m going to make almost that much less every month (I’m working fewer hours so my MIL will watch Teo for us) is going to be really hard for to manage. $900 a month is a lot of money. I definitely haven’t been saving that much each month since we bought the house, not even close.

The truth is, we haven’t talked a lot about how we’re going to make this work. We got a big tax refund and I think we both assumed we’d live off of that when I was on maternity leave. But I haven’t been as good with my portion as I could have been and I know for sure that $2,000 of it has been spent (and not on frivolous stuff, but still, we didn’t expect to be spending it). The one silver lining we have to look forward to is that Mi.Vida got a new job in early June and he should finally start getting benefits in early November. If that is the case–and we can all get on his benefits for relatively cheap (as we’ve been led to believe)–we’ll be saving $800 a month that I pay out of pocket to insure Isa and I. And we’ll be saving the extra $250 a month that Teo will cost once he’s born. That is a HUGE amount of money and frankly, I’m counting on that to get us through. If for some reason it doesn’t happen like we expect it will, we are in serious trouble.

Having kids costs a lot of money. When you need to arrange for childcare, it’s even MORE money. We are so, so lucky to have family help, otherwise childcare for Teo and Isa combined would cost more than my full time salary (after taxes) and we’d be completely screwed. (I have no idea what we’ll do next year if my MIL doesn’t want to watch Teo again). We’re also lucky that our kids are 3.5 years apart, so in two years Isa will be in Kindergarten and we’ll only have four more years of paying for one kid to be in childcare (Isa just makes the cut off so she goes to Kindergarten after three years at daycare/preschool, but Teo just misses it so he’ll go after four years of daycare/preschool.) While it does suck for convenience purposes (they won’t be at the same place until Teo is in Kindergarten), financially it’s helpful.

So yeah, this is a subject that has been weighing heavily on my mind lately. I don’t have any idea how we’re going to make all this work. But we have to. And it’s an amazing worry to have. Truly, I feel blessed to be having to work this all out. The most important thing is our family of four, and if we have to go into debt to get through the first two years, so be it. The alternative is much worse.

5 responses

  1. Oh the issue of finances. I am stressed for you just reading this. Nothing worries/stresses me more than finances, and conversations with B about money. Daycare costs a fortune, and I don’t understand how people do it. I mean, I understand that they have to do it, but I don’t understand how they do it without stressing big time over it. Our costs are lower here in Iowa (but relative due to COL indexes) and it would cost us $1700 per month for two kids which is just crazy.

    I know how money issues can weigh on a person. B and I were not honest with each other about our finances before we got married, and we were both frantically (silently) working to fix them before the prenup and full disclosure. We both got it done, and admitted our secrets to each other a bit later – but it was the single most stressful time of my life. Hands down.

    I am sending peaceful thoughts your way. I hope that once you guys are in the new financial situation with that second baby, that things will be easier than you thought. We found this to be true when I started staying home. We just naturally cut back for some reason. Babies make it harder to go out and spend money!

  2. Money discussions can be uber stressful. We’ve avoided daycare costs which would and could cost us up to $3000/month for 2 kids under 2. If I had stayed working full time during the week, my entire salary would be used to pay for daycare. Kind of silly if you ask me. So I dropped to part time and work weekends. The down side is I have to work on the weekends, but not every weekend. The up side is we can actually use the money I make for things other than child care. Babe and I just had a long talk about our money situation and how I need to get in as many hours before going on leave as I can. We’ll be OK, but it’s going to be a bit of a stretch. I was SO hoping to be able to stop working and be a full time SAHM, but it’s just not going to happen. This is definitely a stressful topic. I hope you find some stress relief soon….and you are super lucky you have family to help 🙂 I’m kinda jealous of that!

  3. Money is stressful! The other day I was all where is our money going? Then I realised that I have a 40% reduction in my salary. It was a good eye opener. We haven’t budgeted for ages but I’ve pulled my head in and getting back on track…..

  4. Ugh money. It is time for the “so you’re unemployed, now what?” budget talk that we tentatively had a few months ago when it looked likely there would be a new job for the spouse, and now, not so much. One reason we aren’t moving to where there are more jobs is that it’s so relatively cheap to live here and much more expensive closer to the city where jobs are more plentiful. Sigh. I hope your discussions go smoothly and with as little stress as possible.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s