Reducing Expenses for Future Family

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Working2notWork
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Reducing Expenses for Future Family

Post by Working2notWork » Mon Jun 23, 2014 3:01 pm

My wife and I have decided that we may try for a family and I am looking for ways to reduce my expenses to help me feel as though we can afford this 'adventure' we're going to be embarking on.

Here are the area's in which I've already found ways to reduce my monthly expenses:

1. Cell Phones - went to MVNO. [savings: $72/month]
2. Car Insurance - Got new quote from competitor [savings: $20/month]
3. Utilities (gas/electric) - Invested in home insulation (walls and attic), all new LED lights, all new energy efficient windows [savings: undetermined. Will know next Nov - Mar]

I'm happy with the ~$1,200/year savings, but I would like to reduce it even further. Unfortunately, I'm out of ideas and I feel my other expenses (auto, auto gas, dinning, entertainment, etc ) are already cut to the bone.


Any missing area's others have benefited from?
Last edited by Working2notWork on Mon Jun 23, 2014 3:21 pm, edited 1 time in total.

Retread
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Re: Reducing Expenses for Future Family

Post by Retread » Mon Jun 23, 2014 3:16 pm

This "adventure" is a lifelong commitment and you are looking at serious money. $1,200 a year will only scratch the surface. Found this quote for you:
From day care to the monthly grocery bill, the cost of raising a child is climbing at a rate that many families can't keep up with. It will cost an estimated $241,080 for a middle-income couple to raise a child born last year for 18 years, according to a U.S. Department of Agriculture report released Wednesday.
Bruce
Last edited by Retread on Mon Jun 23, 2014 3:17 pm, edited 1 time in total.
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lululu
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Re: Reducing Expenses for Future Family

Post by lululu » Mon Jun 23, 2014 3:17 pm

Before you buy something, ask yourself what would happen if you didn't buy it.

More cooking from scratch.

steve_14
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Re: Reducing Expenses for Future Family

Post by steve_14 » Mon Jun 23, 2014 3:18 pm

I'd look to increase income - increase # of hours worked, or target more $ per hour.

lululu
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Re: Reducing Expenses for Future Family

Post by lululu » Mon Jun 23, 2014 3:20 pm

Retread wrote:This "adventure" is a lifelong commitment and you are looking at serious money. $1,200 a year will only scratch the surface. Found this quote for you:
From day care to the monthly grocery bill, the cost of raising a child is climbing at a rate that many families can't keep up with. It will cost an estimated $241,080 for a middle-income couple to raise a child born last year for 18 years, according to a U.S. Department of Agriculture report released Wednesday.
Bruce
A lot of that must be college. I can't imagine people are forking out $13,000 a year for one person's food, clothes, some extra driving, and misc. That gives them time to save and the kid to study hard enough to get scholarships.

livesoft
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Re: Reducing Expenses for Future Family

Post by livesoft » Mon Jun 23, 2014 3:20 pm

Food is a big money waster and time waster. What do you spend on food? Can you cut that in half? Ditch the gym memberships, too.

I always laugh at that number for the cost of raising a kid. Give me a break. For instance, my youngest didn't need braces.
Last edited by livesoft on Mon Jun 23, 2014 3:22 pm, edited 1 time in total.
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Big Worm
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Re: Reducing Expenses for Future Family

Post by Big Worm » Mon Jun 23, 2014 3:21 pm

[/quote] A lot of that must be college. I can't imagine people are forking out $13,000 a year for one person's food, clothes, some extra driving, and misc. That gives them time to save and the kid to study hard enough to get scholarships.[/quote]

I pay over $2000 a month in childcare expenses.

Working2notWork
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Re: Reducing Expenses for Future Family

Post by Working2notWork » Mon Jun 23, 2014 3:22 pm

livesoft wrote:Food is a big money waster and time waster. What do you spend on food? Can you cut that in half? Ditch the gym memberships, too.
My gym is a wash as my company reimburses me for it. We spend roughly $500/month on food for two people.

Working2notWork
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Re: Reducing Expenses for Future Family

Post by Working2notWork » Mon Jun 23, 2014 3:25 pm

Retread wrote:This "adventure" is a lifelong commitment and you are looking at serious money. $1,200 a year will only scratch the surface. Found this quote for you:
From day care to the monthly grocery bill, the cost of raising a child is climbing at a rate that many families can't keep up with. It will cost an estimated $241,080 for a middle-income couple to raise a child born last year for 18 years, according to a U.S. Department of Agriculture report released Wednesday.
Bruce
I think MMM might disagree. I'm not saying what you quoted is not true for some people I'm providing a link to one that seems to have gotten around that figure.

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Watty
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Re: Reducing Expenses for Future Family

Post by Watty » Mon Jun 23, 2014 4:02 pm

lululu wrote:
Retread wrote:This "adventure" is a lifelong commitment and you are looking at serious money. $1,200 a year will only scratch the surface. Found this quote for you:
From day care to the monthly grocery bill, the cost of raising a child is climbing at a rate that many families can't keep up with. It will cost an estimated $241,080 for a middle-income couple to raise a child born last year for 18 years, according to a U.S. Department of Agriculture report released Wednesday.
Bruce
A lot of that must be college. I can't imagine people are forking out $13,000 a year for one person's food, clothes, some extra driving, and misc. That gives them time to save and the kid to study hard enough to get scholarships.
+1

Or that it would cost a family with three kids an extra $39,000 on average. With that said, that is about $1,1100 a month so if you consider at least a couple of hundred dollars a month each for medical insurance, day care, etc, it can a add up pretty quickly.

Retread
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Re: Reducing Expenses for Future Family

Post by Retread » Mon Jun 23, 2014 4:08 pm

Working2notWork wrote:I'm happy with the ~$1,200/year savings...
The point is, $1,200 a year ain't going to cut it...
Bruce
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Working2notWork
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Re: Reducing Expenses for Future Family

Post by Working2notWork » Mon Jun 23, 2014 4:26 pm

Retread wrote:
Working2notWork wrote:I'm happy with the ~$1,200/year savings...
The point is, $1,200 a year ain't going to cut it...
Bruce
Oh, I agree which is why I am asking others for idea's on where they've been able to make significant changes.

davebarnes
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Well

Post by davebarnes » Mon Jun 23, 2014 4:32 pm

Ditch cable/satellite.
Never eat in a restaurant again.
Move to a part of the country with a lower cost of living.
Move to another country with a lower cost of living.
Shop for clothes at Goodwill.
Learn to love Craigslist.

Forget all this nonsense and just have a child.
Be happy.
A nerd living in Denver

Working2notWork
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Re: Well

Post by Working2notWork » Mon Jun 23, 2014 4:41 pm

davebarnes wrote:Ditch cable/satellite...
We've tried, but we enjoy watching certain channels that only cable offers. I've tried negotiating with FIOS, but have yet to get a "great" deal.

A coworker suggested possibly looking into Solar as they now offer free panel installation and a reduced electric rate when compared to utility companies. I might look into this. Does anyone have any experience with solar?
Last edited by Working2notWork on Mon Jun 23, 2014 7:03 pm, edited 1 time in total.

Grt2bOutdoors
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Re: Reducing Expenses for Future Family

Post by Grt2bOutdoors » Mon Jun 23, 2014 6:53 pm

OP - what is your financial situation? How stable is your employment?
Who will watch your children (multiples have been known to occur)? And it can be very expensive, as much as rent or a mortgage monthly or more.
As others have alluded, $1,200 saved is good, but let me be frank - you will spend $1,200 on baby food (if not breast-feeding) and diapers in the first 6 months. Visit your local grocer and check out the prices for a fact finding mission. Then you have health insurance, co-pays, clothing (though you can get either hand me downs or clothing from goodwill/salvation army thrift stores). You'll need a crib, etc. Have a car?, well you need a car seat. After that, the real expenses don't start until 4-5 when it's pre-k time, then comes school and all the activities that come with it - not talking extracurricular, just the class activities (not everything is included - like more fundraisers than you can think of, class trips, etc.). So that gets you to 6th grade, right around then, you may feel like your refrigerator is bare - when kids grow, they eat ALOT!!

All worth it, of course - but the point is I think you need to get informed first - this is more than just an adventure, it will be your life until you depart for another one. :)
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Grt2bOutdoors
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Re: Reducing Expenses for Future Family

Post by Grt2bOutdoors » Mon Jun 23, 2014 6:58 pm

lululu wrote:
Retread wrote:This "adventure" is a lifelong commitment and you are looking at serious money. $1,200 a year will only scratch the surface. Found this quote for you:
From day care to the monthly grocery bill, the cost of raising a child is climbing at a rate that many families can't keep up with. It will cost an estimated $241,080 for a middle-income couple to raise a child born last year for 18 years, according to a U.S. Department of Agriculture report released Wednesday.
Bruce
A lot of that must be college. I can't imagine people are forking out $13,000 a year for one person's food, clothes, some extra driving, and misc. That gives them time to save and the kid to study hard enough to get scholarships.
Have a child or more and prepare to be enlightened. Daycare from 0-18 months is 2K per month, want to drive with said child in car? you need a car seat ($150 - $300 each), crib, clothing, creams, doctor co-pays when you sometimes feel you live at the doctors office (kids can catch colds easy), baby food, diapers, "calgon - to take you away" :) , pre-k, some educational toys to stimulate them mentally, etc. Who's talking about college?
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Working2notWork
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Re: Reducing Expenses for Future Family

Post by Working2notWork » Mon Jun 23, 2014 7:01 pm

Grt2bOutdoors wrote:OP - what is your financial situation? How stable is your employment?
Who will watch your children (multiples have been known to occur)? And it can be very expensive, as much as rent or a mortgage monthly or more.
As others have alluded, $1,200 saved is good, but let me be frank - you will spend $1,200 on baby food (if not breast-feeding) and diapers in the first 6 months. Visit your local grocer and check out the prices for a fact finding mission. Then you have health insurance, co-pays, clothing (though you can get either hand me downs or clothing from goodwill/salvation army thrift stores). You'll need a crib, etc. Have a car?, well you need a car seat. After that, the real expenses don't start until 4-5 when it's pre-k time, then comes school and all the activities that come with it - not talking extracurricular, just the class activities (not everything is included - like more fundraisers than you can think of, class trips, etc.). So that gets you to 6th grade, right around then, you may feel like your refrigerator is bare - when kids grow, they eat ALOT!!

All worth it, of course - but the point is I think you need to get informed first - this is more than just an adventure, it will be your life until you depart for another one. :)
I work for a very stable company that has great benefits and better than average pay. We save roughly 43% of our salary, which is going to have to be adjusted in the future.

I am very aware that having a child is a HUGE responsibility, both time wise and financially. My question here was more directed at ways to save more for our future.

Grt2bOutdoors wrote: this is more than just an adventure, it will be your life until you depart for another one. :)
"adventure" as in something unknown and challenging.

livesoft
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Re: Reducing Expenses for Future Family

Post by livesoft » Mon Jun 23, 2014 7:26 pm

And your company probably has on-site day care for $50 a month.

I always chuckle when someone states they pay $2,000 a month for day care. They just aren't looking at other options or are perhaps signalling how fantastic their income is. We had someone come to our apartment in NY to take care of our child and it wasn't even close to $2K a month. Furthermore, we also had a neighbor's child in our apartment with the same nanny, so we shared the cost of the nanny with another couple.

In the early going with a kid, only formula and diapers are the costs with perhaps the exception of health care. Everything else can be had for free and health care should be a $20 co-pay for many people. One can go very very far with gifts and hand-me-downs which covers all clothes, books, toys, cribs, carseats, strollers, paraphernalia, etc. unless one needs to project status symbols.
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Grt2bOutdoors
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Re: Reducing Expenses for Future Family

Post by Grt2bOutdoors » Mon Jun 23, 2014 7:56 pm

livesoft wrote:And your company probably has on-site day care for $50 a month.

I always chuckle when someone states they pay $2,000 a month for day care. They just aren't looking at other options or are perhaps signalling how fantastic their income is. We had someone come to our apartment in NY to take care of our child and it wasn't even close to $2K a month. Furthermore, we also had a neighbor's child in our apartment with the same nanny, so we shared the cost of the nanny with another couple.
What year was that - early 2000's? As I recall, your children are now in high school or college and you relocated down to a cheaper locale over 10 years ago. Inflation is alive and well in the Northeast. Want a nanny? It'll cost you even more than that between wages, taxes, benefits. I always chuckle when someone quotes a price from 15 years ago and believes official announcements that inflation does not exist for normal goods and services. C'mon be realistic!

In the early going with a kid, only formula and diapers are the costs with perhaps the exception of health care. Everything else can be had for free and health care should be a $20 co-pay for many people. One can go very very far with gifts and hand-me-downs which covers all clothes, books, toys, cribs, carseats, strollers, paraphernalia, etc. unless one needs to project status symbols.$20 co-pays? (who? city workers? - no, I forget, they pay $10). I wish, even the mega-corps are becoming mega-frugal - it's all about cost-sharing these days - you pay more, they pay less. The more you use, the more you pay. Yes, one can go far with gifts, but only if you are the lucky recipient of such "gifts". Maybe I should hang a sign on my door or maybe a placard around my neck as I commute to work - "gifts welcome" :oops:
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Working2notWork
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Re: Reducing Expenses for Future Family

Post by Working2notWork » Mon Jun 23, 2014 8:01 pm

Grt2bOutdoors wrote:$20 co-pays? (who? city workers? - no, I forget, they pay $10). I wish, even the mega-corps are becoming mega-frugal - it's all about cost-sharing these days - you pay more, they pay less.
I guess we fall into the 'lucky' category. Our copays are $20, but we pay about $150/month (Not saying that is bad, just not used to paying that as it was free for us when living down south)

livesoft
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Re: Reducing Expenses for Future Family

Post by livesoft » Mon Jun 23, 2014 8:04 pm

Grt2bOutdoors wrote:Maybe I should hang a sign on my door or maybe a placard around my neck as I commute to work - "gifts welcome" :oops:
That does work. When I talked to my neighbors and family, I always asked if they had anything that their kids had grown out of. Stuff just poured in. Then I gave it all away when we were done with it.
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Re: Reducing Expenses for Future Family

Post by Crimsontide » Mon Jun 23, 2014 8:06 pm

Working2notWork wrote: I feel my other expenses (auto, auto gas, dinning, entertainment, etc ) are already cut to the bone.
This feeling is relative, maybe post your budget numbers for those things and let's see how close to the bone you really are... One thought on the car insurance, did you adjust your deductible and coverage levels to be in line with your available emergency fund? These will make a bigger difference than any competitor's quote.

Working2notWork
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Re: Reducing Expenses for Future Family

Post by Working2notWork » Mon Jun 23, 2014 8:15 pm

Crimsontide wrote:
Working2notWork wrote: I feel my other expenses (auto, auto gas, dinning, entertainment, etc ) are already cut to the bone.
This feeling is relative, maybe post your budget numbers for those things and let's see how close to the bone you really are... One thought on the car insurance, did you adjust your deductible and coverage levels to be in line with your available emergency fund? These will make a bigger difference than any competitor's quote.

Code: Select all

Mortgage	$1,800.00
Power	$120.00
Natural Gas	$100.00
Cable/Internet/Phone	$99.00
Car Gas	$160.00
Groceries	$500.00
Student loan	$500.00
Credit Card (0% int)	$500.00  <-- paying down furniture we bought for new house.  0% for 6 months
Entertainment	$300.00
Cell Phones	$60.00
Restaurants (Dining Out)	$300.00
Misc	$300.00 (House maint, gas for mower, charity, etc)

Grt2bOutdoors
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Re: Reducing Expenses for Future Family

Post by Grt2bOutdoors » Mon Jun 23, 2014 8:24 pm

$300 in monthly dining expenses? that's cut to the bone? if you're serious about reducing expenses that is the first thing that gets thrown out the window.
$300 in monthly entertainment? like what? a trip to Disneyworld every year?
I just found $600 of fat in the budget that needs to be trimmed.
Gas for a lawn mower? must be a John Deere tractor! Hire a goat, save on gas!
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Working2notWork
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Re: Reducing Expenses for Future Family

Post by Working2notWork » Mon Jun 23, 2014 8:31 pm

Grt2bOutdoors wrote:$300 in monthly dining expenses? that's cut to the bone? if you're serious about reducing expenses that is the first thing that gets thrown out the window.
$300 in monthly entertainment? like what? a trip to Disneyworld every year?
I just found $600 of fat in the budget that needs to be trimmed.
Gas for a lawn mower? must be a John Deere tractor! Hire a goat, save on gas!
I know it might seem excessive, but we go away each weekend to our families lake house (3 families total) and usually spend roughly what we've budgeted for.

I don't think a goat would cut the same lines as the tractor, otherwise I'd be all over it. :wink:

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Crimsontide
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Re: Reducing Expenses for Future Family

Post by Crimsontide » Mon Jun 23, 2014 8:37 pm

Working2notWork wrote:
Crimsontide wrote:
Working2notWork wrote: I feel my other expenses (auto, auto gas, dinning, entertainment, etc ) are already cut to the bone.
This feeling is relative, maybe post your budget numbers for those things and let's see how close to the bone you really are... One thought on the car insurance, did you adjust your deductible and coverage levels to be in line with your available emergency fund? These will make a bigger difference than any competitor's quote.

Code: Select all

Mortgage	$1,800.00
Power	$120.00
Natural Gas	$100.00
Cable/Internet/Phone	$99.00
Car Gas	$160.00
Groceries	$500.00
Student loan	$500.00
Credit Card (0% int)	$500.00  <-- paying down furniture we bought for new house.  0% for 6 months
Entertainment	$300.00
Cell Phones	$60.00
Restaurants (Dining Out)	$300.00
Misc	$300.00 (House maint, gas for mower, charity, etc)
This is not bad, you can use the $600 spent on entertainment and dining out on formula and diapers :happy I tend to agree with davebarnes, if you have a stable relationship and a stable job then get on with the baby making.

Gecko10x
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Re: Reducing Expenses for Future Family

Post by Gecko10x » Mon Jun 23, 2014 8:42 pm

Seriously, that's $600 to cut.

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pteam
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Re: Reducing Expenses for Future Family

Post by pteam » Mon Jun 23, 2014 8:51 pm

And I'll say what has been said between the lines from just about every person in this thread: Working2notWork, your working has just been extended by many many years and as said above now you get to cut out all entertainment and dining out :shock:
Last edited by pteam on Mon Jun 23, 2014 8:51 pm, edited 1 time in total.

stan1
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Re: Reducing Expenses for Future Family

Post by stan1 » Mon Jun 23, 2014 8:51 pm

Expenses only matter in the context of income. How much are you saving? How will having the baby impact your savings?

If you are making $500K/year you don't have any problems. If you are making $75K/year you should still have the baby but you may need to make some choices.

Sometime folks are facing real choices in these "can I afford to ..." threads, but other times the choices are self-made theatrics.

Working2notWork
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Re: Reducing Expenses for Future Family

Post by Working2notWork » Mon Jun 23, 2014 9:06 pm

stan1 wrote:Expenses only matter in the context of income. How much are you saving? How will having the baby impact your savings?

If you are making $500K/year you don't have any problems. If you are making $75K/year you should still have the baby but you may need to make some choices.

Sometime folks are facing real choices in these "can I afford to ..." threads, but other times the choices are self-made theatrics.

My wife and I are making enough that we're able to max out our pre-tax retirement accounts and fund our Roth's up to the IRS limit and save around 2K a month in our taxable account. I guesstimate that we are saving around 43% of our income.

I'll devote as many resources as I can to raising a child, I'm here to get ideas on how to do that and be able to still contribute effectively to our retirement.

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Re: Reducing Expenses for Future Family

Post by livesoft » Mon Jun 23, 2014 9:10 pm

pteam wrote:And I'll say what has been said between the lines from just about every person in this thread: Working2notWork, your working has just been extended by many many years and as said above now you get to cut out all entertainment and dining out :shock:
OK, I know you are just kidding.

Our kids grew up dining out. I'm retired and I will have 2 kids in college next semester. OK, I made dinner tonight, but we did eat out last night. I'm pretty sure that my working was not extended by many many years. :)
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Watty
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Re: Reducing Expenses for Future Family

Post by Watty » Mon Jun 23, 2014 9:11 pm

Working2notWork wrote:
Crimsontide wrote:
Working2notWork wrote: I feel my other expenses (auto, auto gas, dinning, entertainment, etc ) are already cut to the bone.
This feeling is relative, maybe post your budget numbers for those things and let's see how close to the bone you really are... One thought on the car insurance, did you adjust your deductible and coverage levels to be in line with your available emergency fund? These will make a bigger difference than any competitor's quote.

Code: Select all

Mortgage	$1,800.00
Power	$120.00
Natural Gas	$100.00
Cable/Internet/Phone	$99.00
Car Gas	$160.00
Groceries	$500.00
Student loan	$500.00
Credit Card (0% int)	$500.00  <-- paying down furniture we bought for new house.  0% for 6 months
Entertainment	$300.00
Cell Phones	$60.00
Restaurants (Dining Out)	$300.00
Misc	$300.00 (House maint, gas for mower, charity, etc)
That is a bit less than $5,000 a month, If having a kid increased that by a $1,000 a month that is 20%. There will also be some deductions and credits on your tax return that will help a bit too.

You are saving a lot and have some things in the budget that could be reduced some so there are lots of ways to make it work if you want to. Having kids is not a financial decision or no one would have them but it isn't like you are working some minimum wage job and having a lot of kids.

Working2notWork
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Re: Reducing Expenses for Future Family

Post by Working2notWork » Mon Jun 23, 2014 9:15 pm

pteam wrote:And I'll say what has been said between the lines from just about every person in this thread: Working2notWork, your working has just been extended by many many years and as said above now you get to cut out all entertainment and dining out :shock:
I understand that you feel as though this is high. My wife and I have sat down and figured this is the minimum we can do. Entertainment isn't just going to the movies or a concert. For us it's buying flowers for the house, purchasing mulch for the beds, laying down crabgrass killer, purchasing fertilizer, etc, etc. It is "things" we feel are necessary and enjoyable that we like to do around the house AND when we leave the house.

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Re: Reducing Expenses for Future Family

Post by GeauxBR » Mon Jun 23, 2014 9:22 pm

When we had our child we cut what we could but it was still tight. So we went with the other side of the equation and raised our income. I started cutting grass to make an extra 10-12k/yr.

No matter what, it's going to cost more than you think.

For us + our 2yr old:
Groceries, diapers, household items: $650
Childcare (we have a nanny in our subdivision): $450
Probably another 50-100 on clothes and stuff.

Childcare seems to vary a ton state to state. Our nanny is 100/wk. So it's either 400 or 500 a month depending on the weeks. For an actual daycare here it's like 160/wk.

One thing we didn't anticipate was all of our other friend's kid's birthdays. It seems like every other month its $50 on a card and gift. It's getting worse too as everyone is either on or planning their 2nd kid.

Bottom line: Pony up.

Working2notWork
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Re: Reducing Expenses for Future Family

Post by Working2notWork » Mon Jun 23, 2014 9:22 pm

Given everything that I've posted about my finances, I understand that many of you do not agree with them. What I am trying to do is get any ideas on how others have been able to decrease their expenses. For example, MMM suggests switching your cellphone provider or riding a bike instead of driving. I am looking for innovative ways that BH's have been able to cut their expenses are share their stories (the good, bad and ugly).

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Re: Reducing Expenses for Future Family

Post by livesoft » Mon Jun 23, 2014 9:40 pm

I don't think you need to cut your current expenses. It reads like you are contributing $17,500 + $5,500 times 2 = $46,000 a year to retirement plans plus an additional $24,000 for a total of $70K a year towards savings and investing.

The main thing is not to spend extra money when you have children. For example, if you only give a card for other children's birthdays, soon your kid won't be invited to those birthday parties and those costs will disappear. Also, don't give birthday parties for your kid either. They won't know what they've been missing anyways.

Don't buy those stupid shoes for your kids either. What a racket! Kids can go barefoot where we live until school age and then hand-me-down shoes work fine. We finally had to buy dress shoes for my son when he was 18. Before that, he wore flops or his athletic shoes or occasionally my shoes. It didn't matter if my shoes fit him or not since he was only going to use them for an hour every year or so. But since he isn't going to wear those dress shoes more than an hour a year, we bought the cheapest available at Walmart.

When your kids get older, they can do all the lawn mowing, the power washing, the house painting, etc. You are allowed to have maids though. :)
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Gecko10x
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Re: Reducing Expenses for Future Family

Post by Gecko10x » Mon Jun 23, 2014 9:44 pm

Ok, so here are some ideas, in no particular order:

- Cooking at home is FAR cheaper than eating out
- Cutting back on meat will save lots. Or find someone who hunts to get cheap venison.
- Eating more whole grains, pastas, and starchy veggies will save even more
- kids don't have to be super expensive:
- breast-feeding is much cheaper than formula (and better)
- cloth diapers can be cheaper than disposables
- 2nd hand clothes
- babies will happily play with utensils, pots, boxes, etc.
- kids don't need different food than you (for the most part). Don't cook twice.
- don't let them watch commercials.
- try dropping to 1 car if you have 2
- consider 1 spouse staying home. Weigh lost wages against child care costs.
- garden
- xeriscaping?

NorCalDad
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Re: Reducing Expenses for Future Family

Post by NorCalDad » Mon Jun 23, 2014 9:47 pm

You're probably not going to be able to save 43% of salary when you have a kid unless you make more money. That's life. Kids take up your time and resources. This is one of those "only on Bogleheads" threads where someone who saves nearly $6,000/month starts clearing space for ramen noodles in the pantry (though I totally appreciate the sentiment).

Agree with others that child care is the biggest expense if you both work. We have it good where we live, but I've heard of crazy rates in some parts of the country where child care costs as much as public university tuition. Figure on several hundred dollars a month at the very least. Take full advantage of the dependent care FSA.

You can save a ton of money on everything else in early childhood as long as you don't use it as an excuse to go on a shopping spree. We've spent virtually nothing on clothing for our kids so far, relying on an abundance of hand-me-downs, secondhand sales and gifts from grandparents/friends. We registered for car seats and baby strollers and got them as shower gifts. We mostly did cloth diapers. My wife breastfeeds. We look for ways to save on admission to kids' parks and museums.

I'm just guessing that you can save much more than $20/month on insurance. Assuming you have a lot in savings, did you increase your deductibles and/or consider dropping comprehensive/collision if your cars are old? You'll need that money to purchase/increase term life insurance, anyway.

And that $2,000/month going to taxable? Even if you can save that, it might go to the 529 instead.

wilked
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Re: Reducing Expenses for Future Family

Post by wilked » Mon Jun 23, 2014 9:59 pm

Where are the following:

Car Insurance
Homeowner's Insurance
Property Taxes

$75/week eating out is too much, you should reduce
You should itemize your misc

How did you get those budget numbers, estimating or from real data? Given the round numbers my gut says estimating. You should spend 2 months charging everything to credit card, then go back and itemize

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pteam
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Re: Reducing Expenses for Future Family

Post by pteam » Mon Jun 23, 2014 10:01 pm

Nice thing we did lately was switch to airvoice wireless / AT&T mvno for $10 a month each and wifi only for cell phones saves us $1700 a year
Last edited by pteam on Tue Jun 24, 2014 4:15 pm, edited 1 time in total.

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alec
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Re: Reducing Expenses for Future Family

Post by alec » Mon Jun 23, 2014 10:02 pm

My wife and I are about 5 years ahead of you. The first 5 years were where we spent most of the money (mostly on daycare), but now they're pretty cheap. We get most of the kids' clothes from handmedowns from other families, and the rest from grandparents. Apparently, my kids' grandparents remembered their parents not being able to help out with clothes, etc, so they're constantly annoying my wife with the "I'm at Kohl's. Do your kids need anything?" calls.

Kids tend to break, write on, spill on, all kinds of stuff, so we have pretty cheapo furniture. Apparently, this mentality lasts even when your kids leave, because our parents still have pretty cheap furniture.

As far as saving money, we still live in the 3br, 1.5 bath, duplex we bought 10 years ago. That has really helped out. I bring my lunch to work and where the same old brown shoes, khakis, and a blue or green shirt to work everyday.

Overall, it sounds like you're doing excellent. I think once you get past the first few years (where expenses can be large), you'll be fine.

Alec
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Working2notWork
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Re: Reducing Expenses for Future Family

Post by Working2notWork » Mon Jun 23, 2014 10:06 pm

wilked wrote:Where are the following:

Car Insurance <-- comes out of paycheck directly
Homeowner's Insurance <-- comes out of paycheck directly
Property Taxes <-- part of mortgage payment

$75/week eating out is too much, you should reduce <-- I'm not sure where you live, but that is a single meal for my wife and I where we live. Friday's are our 'relax and have dinner made for us' night. Granted we sometimes trim this expense with a local mom&pop pizza, but for the most part we try and eat on the healthier side

You should itemize your misc

How did you get those budget numbers, estimating or from real data?
They're real numbers that we round up on

Given the round numbers my gut says estimating. You should spend 2 months charging everything to credit card, then go back and itemize
We are already doing that with Mint

NorCalDad
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Re: Reducing Expenses for Future Family

Post by NorCalDad » Mon Jun 23, 2014 10:23 pm

Working2notWork wrote:
wilked wrote:Where are the following:

Car Insurance <-- comes out of paycheck directly
Homeowner's Insurance <-- comes out of paycheck directly
Property Taxes <-- part of mortgage payment
Look into paying your car insurance and homeowner's insurance annually. Insurers usually charge a few bucks a month for installment payments.

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dm200
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Re: Reducing Expenses for Future Family

Post by dm200 » Mon Jun 23, 2014 11:25 pm

I would not ditch the gym membership - unless it is really expensive and you have an alternative to keep you healthy. The entire famiy benefits with a healthy parent.

There is the benefit of reduced income tax when you have a larger family.

With children, you may stop doing and spending money on some things you do now.

If everyone waited to have children until they believed they could afford it, most of us would not have been born ;)

jenlinc2006
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Re: Reducing Expenses for Future Family

Post by jenlinc2006 » Tue Jun 24, 2014 12:29 am

Why do people still do cable? Do you pay for internet also? Your computer with the internet on it is an entertainment machine from cheapskate heaven. There's an endless supply of free films, documentaries, and tv shows on it (without having to illegally download one thing). Ditch cable, buy a nice $40 set of speakers, and saddle up in front of the notebook for 50 cheap nights this year.

As for kids, what do I know, but maybe instead of thinking of just how to cut back, force the issue by opening a college fund for him from the beginning. Always use time to your advantage.

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Langkawi
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Re: Reducing Expenses for Future Family

Post by Langkawi » Tue Jun 24, 2014 1:35 am

jenlinc2006 wrote:Why do people still do cable?
Sports.

denovo
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Re: Well

Post by denovo » Tue Jun 24, 2014 3:37 am

davebarnes wrote:Ditch cable/satellite.
Never eat in a restaurant again.
Move to a part of the country with a lower cost of living.
Move to another country with a lower cost of living.
Shop for clothes at Goodwill.
Learn to love Craigslist.

Forget all this nonsense and just have a child.
Be happy.
You convinced me and like 10 of my friends who I forwarded this to. No kids. (not the op)
"Don't trust everything you read on the Internet"- Abraham Lincoln

Working2notWork
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Re: Reducing Expenses for Future Family

Post by Working2notWork » Tue Jun 24, 2014 6:03 am

NorCalDad wrote:
Working2notWork wrote:
wilked wrote:Where are the following:

Car Insurance <-- comes out of paycheck directly
Homeowner's Insurance <-- comes out of paycheck directly
Property Taxes <-- part of mortgage payment
Look into paying your car insurance and homeowner's insurance annually. Insurers usually charge a few bucks a month for installment payments.
Good idea, will look into that!

Working2notWork
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Re: Reducing Expenses for Future Family

Post by Working2notWork » Tue Jun 24, 2014 6:06 am

Langkawi wrote:
jenlinc2006 wrote:Why do people still do cable?
Sports.
Sports (world cup, english premier league, nfl, mlb), Science Channel, History Channel, NatGeo, Comedy Central... I wish the future would get here for al la carte (it WILL eventually happen) :sharebeer

wilked
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Re: Reducing Expenses for Future Family

Post by wilked » Tue Jun 24, 2014 8:24 am

So just to summarize what is off-limits...

-Eating out
-Cable
-Entertainment

The remaining allowable categories are a bit tougher

-Mortgage: Short of refinancing or moving I don't see much that can be done
-Power: Turn off lights when not using
-Natural Gas: Turn down water heater temperature setting
-Car gas: Hypermile
-Groceries: Consider starting a garden
-Student Loan: Not much to do here
-Cell phones: Looks pretty low, not much to improve
-Misc: Difficult to assess if not itemized

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