Preparing for baby and one income

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Gropes & Ray
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Preparing for baby and one income

Post by Gropes & Ray » Sun Jan 18, 2015 9:38 am

Any advice for a dad-to-be on preparing for a baby and the loss of one spouse's income? I'm on about a 6-7 month countdown until pregnancy will make my wife unable to work, then 2-3 more months until our child arrives. She doesn't want to return to work after the birth, and I think that is reasonable, but we will have to cut back on a few things. My wife's salary produces about 1/3 of our take home pay.

A couple pieces of info. I have about $5k ear-marked for baby-related expenses such as car seats, cribs etc. We can't expect too much help from family members on defraying those costs. I also have a 6 month emergency fund.

I'm open to all advice, but a couple things concern me most: How to trim enough fat to reduce to one income, what expenses to expect during pregnancy and what expenses to expect post-birth. I have no doubt people will ask for more information, so I will try to update this first post as people ask questions. Thanks.

livesoft
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Re: Preparing for baby and one income

Post by livesoft » Sun Jan 18, 2015 10:04 am

Hmmm, last night must have been really special based on the timeline you just gave. Tell me it was due to the oatmeal you've been eating lately.

To get some quick help, just put "baby expenses" up there in the search box in the upper right and enjoy reading. For many of us, a baby was a $20 co-pay. They are really inexpensive.
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IMD801
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Re: Preparing for baby and one income

Post by IMD801 » Sun Jan 18, 2015 10:20 am

Since your spending is the one thing under your control now: Buy inexpensive baby paraphernalia and try to tune out the baby product industry. Whatever is cheap and functional. The baby simply cannot appreciate a $2,000 mahogany crib and Italian bibs. We spent a lot less than anticipated with this mindset, even if some of our friends weren't doing the same.

Also would consider good disability and life insurance policies if not already in effect.

coalcracker
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Re: Preparing for baby and one income

Post by coalcracker » Sun Jan 18, 2015 10:48 am

If you have friends or family who have have children of any age, ask their advice about tips for baby gear. The effect is twofold:

1. You get advice
2. Often it makes them realize they have lots of old baby gear just sitting around, and they give it to you

We were given, without asking, an umbrella stroller, infant bath, carseat base, swing chair, and countless toys and clothing. This is inaddition to all the crap from the baby shower.

Good luck!

PlayingLife
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Re: Preparing for baby and one income

Post by PlayingLife » Sun Jan 18, 2015 11:09 am

You said your wife's income is 1/3 of your take home pay. What is your monthly net and what are your current fixed monthly expenses including housing and all utilities (or give percentages if you don't want to say amounts)? Do you have any debt? How much money will be left over each month? What is your retirement plan, will you be able to hit your goals with your salary alone? Finally, what sort of lifestyle do you want to lead (pay off the house early, vacation within driving distance Vs. flying distance, etc)?

Naismith
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Re: Preparing for baby and one income

Post by Naismith » Sun Jan 18, 2015 11:17 am

You and your wife need to have a frank talk about what her job description will be after the baby is born and she is recovered from the birth.

If you have been sharing cooking duties, will that continue, or will she do most of it since she is at home now? Ditto for laundry? When the baby cries in the night, will you take turns or will she have duty on the weekdays so that you will not be sleep-deprived at the office?

There is no right or wrong answer to any of those questions. Different couples do it different ways, and maybe even different strategies at different times. But like anything else, good to have a plan.

We were pleasantly surprised at the lack of effect on our short-term bottom line during the years we had one parent at home. Yes, the loss of income and retirement contributions is not something that most would want to continue forever. But during this season, having the time to be thrifty can help a lot. Breastfeeding rather than formula, making more meals from scratch, using the public library to pre-order the latest videos, participating in a co-op preschool--there are lots of ways to save money while maintaining a decent quality of life.

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TxAg
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Re: Preparing for baby and one income

Post by TxAg » Sun Jan 18, 2015 11:29 am

I have a 9 month old. Daycare is the biggest expense by far, but you're forgoing that. Otherwise, our kiddo costs us roughly an extra $250 per month.

Five Scoop
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Re: Preparing for baby and one income

Post by Five Scoop » Sun Jan 18, 2015 11:40 am

livesoft wrote:For many of us, a baby was a $20 co-pay. They are really inexpensive.
Statements like these can be confusing to new parents to be. And, matter-of-factly, this is simply not true. If somebody does not have much help from family (which the OP stated) and this is a first child, there are going to be unavoidable expenses. The baby will need a stroller, crib, high chair, clothes, bibs, potentially bottles and formula (this is definitely not inexpensive). diapers (again, not inexpensive), baby food. The formula and diaper expenses, as well as the expenses for clothes, are ongoing expenses as the child needs to eat and diapers need to get changed. I know from prior posts from livesoft (this is based off of my memory, not a recent re-reading of one of his 36,000 posts!) that he mentions that basically he got a lot of things for free or used hand-me-downs from family and friends or prior kids and had the neighbors babysit and feed the kids. Not everyone is in the position to be able to borrow clothes, cribs, strollers, etc, and not everyone will have trustworthy neighbors to rely on. Depending on the parents income, these expenses may be a minimal percentage of their take home pay or may be quite significant.

So, seriously, babies can be expensive to raise. I agree that subsequent children are less expensive to raise since you have some of the basic items already - assuming the crib, stroller, or car seat were not subject to recall.

To the OP:

Expenses during pregnancy that I can recall - maternity clothes as the pregnancy progresses, unusual food purchases to satisfy your wife's cravings, purchase of some of the items noted above - crib, stroller, high chair, car seat and base, bibs, a pack and play. Now, if you are planning to have a baby shower, I would not purchase any of these larger items, but rather would register for them. If you don't already have one, consider purchasing a cheap digital camcorder. Our daughter is nearly a year old and it's a joy to watch her grow up before our eyes by going back and watching videos from day 1!

Expenses post-pregnancy - formula if your wife is not planning or is unsuccessful breastfeeding, bottles regardless of formula or breastfeeding, diapers, wipes, baby food (after several months), clothes, pacifiers (some babies take to one brand more than others, but this is not an ongoing or recurring expense), supplies for bathing the baby. There are plenty more, but this is what I could think of at the moment.

Dave C.
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Re: Preparing for baby and one income

Post by Dave C. » Sun Jan 18, 2015 11:51 am

Congradulations on your soon to arrive bundle of Joy!!

+1 on IMD801"s advice.

If you folllow Fritch's advise your child will be 20 years old before you crawl out from under your spreadsheets and calculators!

Kiss your wife first, than the baby, then buy some insurance.
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Five Scoop
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Re: Preparing for baby and one income

Post by Five Scoop » Sun Jan 18, 2015 11:54 am

Missed a prior post with same information, so deleted.
Last edited by Five Scoop on Sun Jan 18, 2015 1:17 pm, edited 1 time in total.

Grt2bOutdoors
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Re: Preparing for baby and one income

Post by Grt2bOutdoors » Sun Jan 18, 2015 11:56 am

Use the next few months to stockpile cash - maybe you have a higher tolerance for risk than I, but with a loss of 1/3 take home moving to a single breadwinner status, I don't feel comfortable with only 6 months accessible liquidity.
Get your sleep now! if you haven't heard the first 6 months after birth involves getting up at all different times of the day including the wee hours of the day and could involve more than just a 20 minute feeding, it also involves cuddling them back to sleep - that could take as few as 5 minutes or longer than that.
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Twins Fan
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Re: Preparing for baby and one income

Post by Twins Fan » Sun Jan 18, 2015 12:15 pm

Yep, start living off just your salary now and save hers until she stops working. See what it's like and what needs to be cut out. When she stops working, you won't have to pay gas or commuting fees or maybe lunches out any longer. There may be some expenses cut by her not working.

Only to be replaced by baby expenses of course. :)

Notice my screen name... you could have two at once! :happy My now ex stayed home with the twins (also an older son) after they were born and we mde it off one salary. I'm not a high income earner, especially back then, and we made it. As someone mentioned, having no daycare bill helps a ton. I don't recall babies being shockingly expensive like I thought they would be. LOTS of diapers, formula, and food! But, realize they will either outgrow things or ruin things pretty quickly, so no need to go super expensive or name brand on clothes and toys and such, IMO. That keeps costs down. Of course, furniture, car seats, and necessities like that, but you have already figured for that.

It won't be as scary as you think it will be.

Gropes & Ray
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Re: Preparing for baby and one income

Post by Gropes & Ray » Sun Jan 18, 2015 1:12 pm

Livesoft: Due date is 36 weeks from the missed period as I understand it, but we're a few weeks removed from the magic hour.

IMD801: Thanks. I may need disability. I got life insurance that equals 10x my yearly income plus a smidge to make it a round number. But, I will review my work sponsored disability policy to see if I should beef it up. I think it covers 60% of my salary.

coalcracker: Great advice. This will be the first grandchild on either side, so it's been almost 30 years since a baby was born in our family. But, we do have some co-workers and friends with kids. Thanks!

Naismith: Thank you. We have an understanding of how things will (hopefully) work. I think we are both looking forward to the new division of labor. She has never been career oriented, and I really hate doing laundry. :happy But I love to cook, so we'll share that one.

Fritch: Fixed expenses:
Mortgage: 30%
Insurance: 4%
Student Loans: 13%
Utilities: 6%
Commuting: 4%
Groceries: 9% (could do better)

I have a budget planned that looks pretty good, but I worry that I have blind spots. Diapers, maybe formula... will I have medical bills? You obviously don't know my insurance, but it has a $2k co-pay (which I have the FSA maxed out for), but do you usually have to cover other costs of the delivery? EDIT: Percentages are after wife stops working and after diverting 15% of income into 401k.

Thanks to everyone else too. Too many to respond to each individually. Would love twins! I'm a value oriented person, and I see two for one as a great deal.
Last edited by Gropes & Ray on Sun Jan 18, 2015 5:03 pm, edited 1 time in total.

PlayingLife
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Re: Preparing for baby and one income

Post by PlayingLife » Sun Jan 18, 2015 1:24 pm

Your fixed expenses total 66% of your net take home pay? Is that after your wife stops working or before? If that's after your wife starts working, I would definitely do what you are doing, you definitely have plenty of room to live a comfortable life!

My questions above were just things to make sure you were considering...your original post was a little open ended so I just put some questions up to consider. My employer's insurance plan just changed to these ridiculous copays this year too...we're fine, but I definitely see a lot of people bypassing needed medical care to avoid paying so much out of pocket on the spot.

Best of luck with you wish for twins, congratulations!

livesoft
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Re: Preparing for baby and one income

Post by livesoft » Sun Jan 18, 2015 1:31 pm

coalcracker wrote:If you have friends or family who have have children of any age, ask their advice about tips for baby gear
May I suggest you all wait until the 5th month to spread the news.
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Toons
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Re: Preparing for baby and one income

Post by Toons » Sun Jan 18, 2015 1:35 pm

" but we will have to cut back on a few things. My wife's salary produces about 1/3 of our take home pay."


You will find that it is easier than you think.
We found more ways than one to reduce expenditures while one of us was home with the child.
More meals at home,less travel, less auto expenses.We found that when one of us decided to stay home to raise the child,that individual became more creative in ways to save money due to the amount of time they had to think about those issues. :happy
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Krischi
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Re: Preparing for baby and one income

Post by Krischi » Sun Jan 18, 2015 2:04 pm

There are some things you should get new - car seats and mattresses come to mind especially. For the rest, you can easily get hand-me-downs through consignment sales, Freecycle, and Craigslist, and then sell stuff again after you no longer need it. The savings on clothing, especially, are like you would not believe it, considering how quickly babies and toddlers outgrow their sizes. Our twins are five years old, and we still spend less than $250 net on their clothes per year. You should be able to find something for your area here: http://consignmentmommies.com/

Food has been a bigger expense than we anticipated before having kids. For breastfeeding, the mother needs to eat quite a lot more than normal, even more so than during the pregnancy. Diapers are not cheap, but the bulk cost are not bad. We've found them to be much cheaper online, but that was a while ago. Bigger box sizes are better for savings. As for healthcare, our insurance plan waives the co-pay for the regular checkups of children - you'll have to check what it is like with yours. Our biggest medical expense (aside on what we spent for birth) was checking for possible food insensitivities and allergies with our daughter. Kids can and do incur the occasional expense - accidents do happen-, so I would look into stocking up the emergency fund a little.
Last edited by Krischi on Sun Jan 18, 2015 2:14 pm, edited 1 time in total.

livesoft
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Re: Preparing for baby and one income

Post by livesoft » Sun Jan 18, 2015 2:08 pm

I don't think one needs to get anything new nowadays including car seats, mattresses, or cribs. In the old days, cribs had wider gaps, but they got regulated to narrow gaps. Plus a baby doesn't need a crib until it is larger and starts crawling anyways. Car seats have been regulated quite a while, too. I am unaware of any new safety regulations that would require a new car seat. Spending on babies is a big racket for the non-poor in America.
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jstrazzere
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Re: Preparing for baby and one income

Post by jstrazzere » Sun Jan 18, 2015 2:09 pm

livesoft wrote:For many of us, a baby was a $20 co-pay. They are really inexpensive.
You either haven't had a child, or are answering a different question.

Perhaps you spent only a $20 co-pay for the cost of the birth.
I'd bet a lot of money that you had other expenses (furnishings, clothing, food, car seats, toys, continued medical care, education, sports, activities, perhaps daycare, perhaps weddings, etc, etc).

You didn't even address the "one income" aspect which is the crux of the question.

"Inexpensive" isn't a word the vast majority would use. Perhaps you are unique.

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Re: Preparing for baby and one income

Post by Krischi » Sun Jan 18, 2015 2:13 pm

livesoft wrote:I don't think one needs to get anything new nowadays including car seats, mattresses, or cribs. In the old days, cribs had wider gaps, but they got regulated to narrow gaps. Plus a baby doesn't need a crib until it is larger and starts crawling anyways. Car seats have been regulated quite a while, too. I am unaware of any new safety regulations that would require a new car seat. Spending on babies is a big racket for the non-poor in America.
Car seats are considered unsafe after they have been in accidents. Since you don't know the history of a used car seat, not getting a new one exceeds my tolerance for acceptable risk.

Mattresses are a borderline case. There are no safety issues, but a lot of people can't stand the yuck factor of a used one. If that is not an issue for you, then by all means get a used one. And I'd definitely get a used bed or crib.

livesoft
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Re: Preparing for baby and one income

Post by livesoft » Sun Jan 18, 2015 3:34 pm

jstrazzere wrote:
livesoft wrote:For many of us, a baby was a $20 co-pay. They are really inexpensive.
You either haven't had a child, or are answering a different question.

Perhaps you spent only a $20 co-pay for the cost of the birth.
I'd bet a lot of money that you had other expenses (furnishings, clothing, food, car seats, toys, continued medical care, education, sports, activities, perhaps daycare, perhaps weddings, etc, etc).

You didn't even address the "one income" aspect which is the crux of the question.

"Inexpensive" isn't a word the vast majority would use. Perhaps you are unique.
Or maybe I am just poor and figured out how to raise my children cheaply inexpensively. Perhaps I have out-moustached MMM in this area of life?

As for the one-income thing, I have often recommended that a two-income family live off the income of the lower-paid spouse.
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travelnut11
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Re: Preparing for baby and one income

Post by travelnut11 » Sun Jan 18, 2015 3:39 pm

livesoft wrote:
To get some quick help, just put "baby expenses" up there in the search box in the upper right and enjoy reading. For many of us, a baby was a $20 co-pay. They are really inexpensive.
This is a beyond ridiculous thing to say. I believe Livesoft has older kids so perhaps that was true for him but health insurance has changed significantly in the past few years. I'm 26 weeks pregnant and because I'm having prenatal care across two calendar years I will be subject to my deductible/maximum out-of-pocket twice. For 2014 I spent about $2000 (deductible $1750/OOO max=$3000) and am expecting to hit my out-of-pocket max after joining my husband's policy this year of $2850. So in medical care alone the baby is going to cost about $5K.

It is true that you don't need all the stuff peddled to new parents but at a minimum I would get a new car seat and probably mattress and keep an eye on Craigslist or Once Upon a Child for gently used stuff. Friends are great for getting hand-me-downs too. I have tons and tons of clothes already plus a bunch of swings, playmats, etc that I would've never purchased on my own but are great to have. People love getting baby gear out of their houses when they're done.

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livesoft
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Re: Preparing for baby and one income

Post by livesoft » Sun Jan 18, 2015 4:00 pm

So you wouldn't accept a new car seat as a baby shower gift? I don't think we ever paid for a car seat.
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Ron Ronnerson
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Re: Preparing for baby and one income

Post by Ron Ronnerson » Sun Jan 18, 2015 4:22 pm

Twins Fan wrote:Yep, start living off just your salary now and save hers until she stops working. See what it's like and what needs to be cut out. When she stops working, you won't have to pay gas or commuting fees or maybe lunches out any longer. There may be some expenses cut by her not working.

Only to be replaced by baby expenses of course. :).
I second trying to live off of one salary prior to the arrival of the kid. That way you know if it's doable for your family. It would be much better to find out this information prior to your wife quitting her job.

Make sure you take into consideration variable expenses also such as vacations, furniture, clothing, entertainment, car repairs/maintenance, etc. along with new baby-related expenses. Also, do you plan to continue to save toward future goals such as retirement and college? If so, will you be able to do so with 1/3 of your income reduced and your expenses at least slightly higher because of the baby?

I think those who have posted previously saying that babies are expensive and those asserting that babies are inexpensive are actually both correct. The range of how much babies cost is big and it depends on individual circumstances. We have a 7 month old (our only child) and we're on livesoft's end of the spectrum. Daycare costs us only about $220/month (not week) due to a lot of family support, childcare FSA, and the fact that I have summers off. The lower taxes we pay because of the additional exemption and the child tax credit (which we qualify for by keeping our AGI under $110k) largely offsets diapers and other basic things. Furniture, toys, books, baby gear, etc. are usually obtained through gifts or are hand-me-downs from friends and family. Our baby expenses are certainly not $0 but are a lot less than many people's. Our way to accomplish this was by buying a house right next door to my sister and her family, across the street from my mom, and 10 minutes away from my in-laws. Not everyone is able to or interested in this sort of a set up. My point is simply that circumstances vary a lot and this affects how much kids cost.

In our case, my wife needed to continue working because we needed her income to pay some of the bills, save sufficiently for our future, and because her employer provides health benefits for our family (and she has some other great benefits too). Going back to work after a few months off was difficult but we've arranged things so that at least it's not too overwhelming. My wife reduced her hours slightly (just enough to still get benefits). She still works 4 days a week as she did prior to the arrival of our child but now leaves work early on a couple of days. Our household income is down only about 2% as a result of her reduced hours once taxes and commuting are taken into consideration. If you do find out that you're unable to pay your bills comfortably while still saving sufficiently for your future on one income, it may be worthwhile exploring different work configurations for your wife. It doesn't have to be all or nothing in terms of working.

Last but not least, congratulations! Kids are amazing and wonderful and you're in store for a wonderful new chapter in your lives!

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Re: Preparing for baby and one income

Post by Swampy » Sun Jan 18, 2015 4:28 pm

A newborn baby needs a stay at home mom for the first 5 years of their life. EVERYTHING else is secondary.

Looking back on it, the worst mistake I made as a parent was hiring a nanny to watch my kids during their early formative years.

I mean it with all sincerity.
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Re: Preparing for baby and one income

Post by Impromptu » Sun Jan 18, 2015 4:35 pm

Our first baby is due in 17 days. Back in October we set aside $1000 for baby expenses. We ended up spending $775. Most of our stuff has come from craigslist and Goodwill. What convinced me to go the craigslist route was walking through Babys R Us. Sticker Shock! There was no way I was going to spend that much money on baby furniture. Used items we found were a Crib/changing table combo, dresser, Pack and Play, High Chair, baby bath, sundry outfits, Glider/Ottoman. New items were a mattress and Stroller/Carseat combo, which was a clearance item, regularly $180 for only $56. Target currently has many clearance items.

You don't need nearly as much as the baby-industrial complex would like you to believe. In fact, you can buy a Pack and Play which includes a changing table and a bassinet and your baby can sleep in that for the first 3 months if you want.

If you go the used route, you have time on your side. You can check craigslist every couple of weeks to see if there is something you like.

Check out cloth diapers. They will save you money after the first year. If used for more than one kid, you'll save thousands. If you can find a good used set, you'll even save the start up costs. Plus, your babies won't get diaper rash nearly as much as those use disposable.

Last thing, you should start living off of just one salary now. There is nothing stopping you from doing that. You'll build up a bit of a cushion and you won't have to sacrifice once the baby comes.

Congratulations!
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Watty
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Re: Preparing for baby and one income

Post by Watty » Sun Jan 18, 2015 5:13 pm

Within reason be careful of trying to over analyse how things will work. You will fret a about things that end up not being important and there will be unexpected twists and turns that you could not plan on. Every kid and family is different and it is best to be flexible and find out what works for you.

One thing that my wife did when my son was a toddler was that she did daycare in our home for one or two kids so that the financial numbers would work better since she wanted to stay home with him. Between not having to pay for daycare and what she paid that added up.

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Re: Preparing for baby and one income

Post by livesoft » Sun Jan 18, 2015 5:53 pm

Impromptu wrote: Most of our stuff has come from craigslist and Goodwill.
And whatever you buy, you may be able sell later, so the net cost could actually be a gain.
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Re: Preparing for baby and one income

Post by HIinvestor » Sun Jan 18, 2015 6:03 pm

Also, depending on what W does, she MAY be able to work during her pregnancy. I had a desk job and worked up to Tuesday (baby was born on Thursday). I didn't work on Wednesday just because I wasn't feeling great because the baby kept me up all night Tuesday. I actually preferred working because it was air-conditioned and liked bringing in the salary we could save.

I did appreciate the 2nd-hand things we got before baby was born from friends and relatives. I borrowed a crib from a woman who noticed I was pregnant and offered it to me. I returned it when the 2nd child was 2 and we were moving! We really didn't spend all that much on preparing for the baby and because of good insurance, the labor and delivery was 100% covered, as well all the well baby checkups. I agree that Craigslist and thrift shops are excellent places to acquire nice baby things, as long as you sanitize as needed--several friends have found amazing things this way.

I was grateful that I could afford to stay home with our kids when they were young--it is a wonderful luxury, even tho it meant we had to be more careful with our mone than ever.

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Re: Preparing for baby and one income

Post by arbtx » Sun Jan 18, 2015 7:41 pm

Remember to account for any additional premium costs you may incur by adding a child and/or spouse to your health insurance plan.

My husband and I are in a similar situation. Our first child is due in June. If I were to quit my job to stay at home, not only would we lose my income, but we would add about $5,000 annually in additional health insurance premiums. And that’s for a HDHP with substantial out-of-pocket costs. The standard plan his employer offers would add another $3,000 in premiums.

Other costs to consider are legal costs for creating or updating a will and costs associated with additional life insurance.

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Re: Preparing for baby and one income

Post by tainted-meat » Sun Jan 18, 2015 7:51 pm

Swampy wrote:A newborn baby needs a stay at home mom for the first 5 years of their life. EVERYTHING else is secondary.

Looking back on it, the worst mistake I made as a parent was hiring a nanny to watch my kids during their early formative years.

I mean it with all sincerity.
I disagree. Both of my parents worked and everything went fine. Also, if someone is out of the workforce for five years it will be very difficult (not impossible) to get a decent job.

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Re: Preparing for baby and one income

Post by HIinvestor » Sun Jan 18, 2015 8:20 pm

Actually, though it is challenging, many folks have had interruptions in their careers for raising kids, caring for loved ones, etc. and have still been able to get back into the working world. I have held numerous exciting and fascinating jobs since returning to the workforce after taking time out to raise our two kids. I have no regrets. I know other parents who have opted to stay in the workforce as well as others who have opted to have one parent stay at home for varying lengths of time. It can work, whichever way works out best for the couple and kids. The key is QUALITY childcare if that is what is chosen, which can be excellent.

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Re: Preparing for baby and one income

Post by ClevrChico » Sun Jan 18, 2015 8:31 pm

Avoid retail for clothes and toys as much as you can. We have friends with slightly older children, that gave us great hand me downs. Garage sales are golden for kids stuff. Kids consignment shops are quite reasonable. We bought our three year old's Christmas at Goodwill. (Nice toys practically free.)

Avoid used car seats. They expire and can take hours to clean up. Just a nightmare.

If you've active you can get a bike trailer for kids (when they're a bit older) that doubles as an all weather stroller. Being able to get out of the house as a family is lots of fun.

Ron Ronnerson
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Re: Preparing for baby and one income

Post by Ron Ronnerson » Sun Jan 18, 2015 9:03 pm

tainted-meat wrote:
Swampy wrote:A newborn baby needs a stay at home mom for the first 5 years of their life. EVERYTHING else is secondary.

Looking back on it, the worst mistake I made as a parent was hiring a nanny to watch my kids during their early formative years.

I mean it with all sincerity.
I disagree. Both of my parents worked and everything went fine. Also, if someone is out of the workforce for five years it will be very difficult (not impossible) to get a decent job.
I, respectfully, disagree too. Everyone's situation is different and moms staying home for 5 years may not always be best or even possible. Some scenarios, just to name a few that come to mind right away: single parents, mom earns much more than dad, mom doesn't want to stay home (for whatever reason), and both incomes are needed to support the household even with cutting costs as much as possible.

Staying home is a great choice for some but it isn't always so simple for everyone out there.

livesoft
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Re: Preparing for baby and one income

Post by livesoft » Sun Jan 18, 2015 9:05 pm

I'm skeptical of the reasons given for car seats expiring, but here's a link to that: http://www.parenting.com/article/car-seat-guidelines One can be mindful and avoid buying a used car seat that might expire while you own it.

As for cribs, Finnish babies sleep in a cardboard box provided by the government: http://www.bbc.com/news/magazine-22751415
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ThinkingRunner
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Re: Preparing for baby and one income

Post by ThinkingRunner » Sun Jan 18, 2015 9:45 pm

We have two-year old twins. The pregnancy was planned but the twins part was a surprise. I don't have any advice on the one income aspect as we are both on good career trajectories and continued to work. But if you are not going to have any daycare costs, your expenses likely aren't going to go up much at all. Since I track my spending closely, I can provide some of our costs for reference:

1. Delivery/hospitalization/medical: We had a pretty complicated pregnancy that included six weeks hospital bed-rest, C-section, the works. We were on a HDHP and basically hit the deductible that year and the next plus a little extra for co-pays (total ~ $6,000 from start of pregnancy until the twins' first birthday). Last year with the ACA mandating deductible-free well-child visits, our OOP medical costs dropped down to just a few hundred dollars.

2. Infant formula: Since the twins were premature, they needed special infant formula for their first year. This cost about $120/month until their first birthday, though I was able to get my insurance to cover some of it. It went away after year one.

3. Diapers: People complain about diaper costs, but they are actually really cheap. In a bit over two years, we have spent just over $1,300 on diapers/wipes. That is around $54 per month, or $27 per child per month. Hardly significant. We get the Walmart Parent's Choice variety which has been consistently cheap, problem-free, and gets delivered to our doorstep.

4. Cribs, strollers, car seats, high chairs, rockers, bottles over two years for two kids cost around $2,000. These are staggered expenses. We generally purchased value brands on Amazon or Walmart. Between hand-me-downs and gifts, we have spent less than $900 on baby clothes/apparel in the same period.

5. Groceries: Now that the kids are eating more "adult food" (some of it organic), our grocery bills have gone up by about $100-150 a month. Again, not a huge dent.

These are our actual costs and cost increases due to the kids, and as you can see, they are not very expensive at all. Your additional tax exemptions and credits if any should be more than enough to cover these costs.

To put these costs in perspective, we have spent over $70K in daycare during the same period. Now *that* is significant and you are foregoing it completely (at the cost of your wife's income). But we both make higher incomes and the daycare tradeoff is financially worth it to us.

P.S. I would think twice (pun intended) before wishing for twins. We had twins unexpectedly and they are great in many ways, but they can really sap your energy. There is no "break" or "peace". Also, they bring a higher chance of pregnancy complications and prematurity, both of which we experienced.

Naismith
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Re: Preparing for baby and one income

Post by Naismith » Sun Jan 18, 2015 10:09 pm

I second trying to live off of one salary prior to the arrival of the kid. That way you know if it's doable for your family. It would be much better to find out this information prior to your wife quitting her job.
While I am not disagreeing with this, I would add a caveat that this only accounts for half of the equation, the money not coming in.

The savings that many of us find when someone is home fulltime are not going to be realized yet, because that person is still not in a position to do those money-saving things. And it is not going to happen during maternity leave, either, which is mostly a challenge in sleep deprivation and trying to get a shower.

I don't feel that it was a luxury to be at home. I worked my ass off, put systems of home management that helped us when I returned to the workforce, and helped my husband's career a lot.

Krischi
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Re: Preparing for baby and one income

Post by Krischi » Sun Jan 18, 2015 10:11 pm

A little off topic, but twins get a lot easier by age 3 or so. They also make terrific playmates and entertain each other, so as they have gotten older, we've actually had to spend less time on entertaining them than we would have with a single child. The first twelve months were really tough, though. And getting double of some stuff to cover basic needs can get expensive.

Runner01
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Re: Preparing for baby and one income

Post by Runner01 » Sun Jan 18, 2015 10:45 pm

We bought almost everything except the car seat used for very little money. The biggest expense by far was the pregnancy and birth. The pregnancy carried over two years so we had to spend about $2k the first year and an additional $7k (c section delivery) the second year. My wife only works 15 hours per week (5 of which are at home doing paperwork) so we have very little childcare costs.

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papito23
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Re: Preparing for baby and one income

Post by papito23 » Sun Jan 18, 2015 11:45 pm

Congrats on the tax deduction! If your income is low enough, understand how both the Earned Income Tax Credit and the Saver's Credit work. A Trad-IRA here or there in just the right amount can yield wonders.

I'm frugal, so I'll say this: Don't set foot into a baby store unless you haven't found a way to beg/borrow/steal what you need. For us, this means we went in and bought a brand new car seat, maybe a few little other things. Other than that, babies/toddlers don't cost much money unless you get sucked into it. They cost much more in sanity, personal goals, free time, blood/sweat/tears. Not that I'm counting! Our baby (2nd) is 1 month... it's tempting to think that the next consumer purchase will solve our problems. There are a few helpful things out there. My understanding is that the temptation to substitute quality time and careful thinking with $$$ does not go away in the course of parenting.

In regards to daycare vs. stay-at-home, that's a very personal decision and people have strong feelings and lots of anecdotal evidence. I'm biased towards stay-at-home. Consider the regret minimization framework for decision making (explained byby Jeff Bezos). Looking back 20 years from now... do you have a hunch that you are more likely to regret one than the other?

Congrats!
A thing is right when it tends to preserve the integrity, stability, and beauty of the biotic community. It is wrong when it tends otherwise. -Aldo Leopold's Golden Rule of Ecology

elbryn1000
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Re: Preparing for baby and one income

Post by elbryn1000 » Mon Jan 19, 2015 12:11 am

just to add another place to look for used stuff - the local facebook buy/sell/trade groups. it takes a bit of effort and time but there is a good bunch of clothes/toys to be found at huge discounts. plus provides a good place to get rid of your stuff. eventually, you might figure out a few folks who have kids that precede yours a year or two and you can follow them about or get direct messages from them when they got stuff to sell and a list of folks who you can get rid of your stuff too.

we used to the garage sale thing quite a bit as well as the local rec center would sponsor a baby resale event that drew lots of people. after the facebook group was found, we stopped. far easier to look at posts than seek out diminishing returns from unknown garage sale events.

for new stuff - right now if you have some stuff on a list to buy new, kohl's has a 30% with kohls cc that stacks with free shipping and an additional $10 off 30 baby/toddler stuff. codes can be found from fatwallet/slickdeals forums with a bit of searching.

one replacement for table bumpers on the cheap if you don't care what they look like is to buy pipe insulation from home depot/lowes of appropriate size. 3/8 - 1/2" worked for our coffee tables. cut to size with scissors and some duct tape/electrical tape finished it off.

one idea we had to help our 3 year old remember our phone number was to make it our tablet password. less than 24 hours later, kid knew the number. motivation :)

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tarheel
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Re: Preparing for baby and one income

Post by tarheel » Mon Jan 19, 2015 7:53 am

Posters above have done a great job on the baby items.....I would say to streamline the budget as much as possible. For us, that was: 1) Get rid of cable, or at least downgrade to basic, and 2) If you can, switch cell phones over to MVNOs. This could easily save ~$100-$200 a month depending on your circumstances.

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