Dear wife quits job and now we are down to 1 income

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Cuzz35
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Re: Dear wife quits job and now we are down to 1 income

Post by Cuzz35 » Wed Jan 24, 2018 3:12 pm

onourway wrote:
Wed Jan 24, 2018 2:58 pm
Cuzz35 wrote:
Wed Jan 24, 2018 2:51 pm

How does this set a wrong example? What's wrong with a spouse, male or female deciding to stay home and raise their children? Would you have anything to say if it were a male deciding to stay home? I work all the time and my son tells me (he's 6) he doesn't want to work when he grows up because that's all I do.

Also, the poster quoted only said it was for a few years. Their children won't even remember their mother not working if she decides to do so.

We can all understand that some decisions don't make sense financially. Having kids is not a good thing to do financially speaking, but we do it anyway.

You can find folks on both sides that think they would have worked if they could go back and do it over and others that would say working wasn't worth it.
In this case it doesn't sound like the family decided that one spouse should stay home and raise the children. The wife up and quit rather suddenly cutting the family income in half. Without a plan in place. Very different situations.
Different circumstances but they are still deciding on what to do moving forward. Everything I wrote is still valid.

jhawktx
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Re: Dear wife quits job and now we are down to 1 income

Post by jhawktx » Wed Jan 24, 2018 3:18 pm

miamivice wrote:
Wed Jan 24, 2018 1:20 pm
onourway wrote:
Wed Jan 24, 2018 1:18 pm
WpgGuy wrote:
Wed Jan 24, 2018 1:08 pm

This is a very old fashion way of thought. Even if it’s break even, a spouse *should* continue to work to maintain their skills and career prospects, especially one who was pulling in 70k (!!). It is well understood that women take huge future earnings hits by doing this, it’s bad for equality, it’s bad for your future and it sets the wrong example for children (especially daughters).

This isn’t 1978, it’s 2018. Sorry to push back hard, on this but reasoning like this needs to be tempered. It’s old, it’s out of date.
Agreed. Even if the spouse spends all take-home income on child-care, but can put away $10k/year in retirement funds, that translates to hundreds of thousands of extra dollars at retirement age for someone 33 years old. Not to mention the hit to future earnings.
What if the mom doesn't want to work?
Well, what if the dad doesn't want to work either.

njdealguy
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Re: Dear wife quits job and now we are down to 1 income

Post by njdealguy » Wed Jan 24, 2018 3:18 pm

miamivice wrote:
Wed Jan 24, 2018 12:55 pm
How many kids do you and your wife want?

I don't know your area, but daycare for 1 kid costs around $20k/year aftertax (maybe $28k pretax.) If you are thinking about having a baby brother or sister at some point, you'll be paying about $56k pretax dollars in child care.

If your wife is interested in raising them at home, you might find there isn't much difference financially whether she works or stays home for the next few years.
28k a year for daycare really? is this in the middle of a big city like Manhattan/San Francisco? In my area of central NJ I see rates more in the range of $1100-$1400 a month.

TOJ
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Re: Dear wife quits job and now we are down to 1 income

Post by TOJ » Wed Jan 24, 2018 3:21 pm

4) You find a way to increase income; additional work or a whole new job.

miamivice
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Re: Dear wife quits job and now we are down to 1 income

Post by miamivice » Wed Jan 24, 2018 3:22 pm

njdealguy wrote:
Wed Jan 24, 2018 3:18 pm
miamivice wrote:
Wed Jan 24, 2018 12:55 pm
How many kids do you and your wife want?

I don't know your area, but daycare for 1 kid costs around $20k/year aftertax (maybe $28k pretax.) If you are thinking about having a baby brother or sister at some point, you'll be paying about $56k pretax dollars in child care.

If your wife is interested in raising them at home, you might find there isn't much difference financially whether she works or stays home for the next few years.
28k a year for daycare really? is this in the middle of a big city like Manhattan/San Francisco? In my area of central NJ I see rates more in the range of $1100-$1400 a month.
$28k a year is PRETAX income. $20k a year is the actual cost for INFANT care. I'm assuming 28% tax bracket.

(Pretax income is only fair basis to compare staying at home versus paying for daycare.)

Other places have cheaper care. It all depends on location.

Finridge
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Re: Dear wife quits job and now we are down to 1 income

Post by Finridge » Wed Jan 24, 2018 3:22 pm

I'd vote for #1 (new full time job) or at least #2 (new part-time job).

Do what you can do reduce expenses--but that will be hard with the new child.

Also, it would have been better if your wife had negotiated for them to lay her off instead of resigning. She should apply for unemployment if it is available in your state. Even if she resigned, it's possible that she might still qualify if she explains that she had to resign because they were treating her poorly--I have seen people get unemployment benefits in these circumstances.

totesmagotes
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Re: Dear wife quits job and now we are down to 1 income

Post by totesmagotes » Wed Jan 24, 2018 3:33 pm

miamivice wrote:
Wed Jan 24, 2018 1:35 pm
onourway wrote:
Wed Jan 24, 2018 1:30 pm
miamivice wrote:
Wed Jan 24, 2018 1:20 pm
What if the mom doesn't want to work?
That's a family decision not a 'mom' decision. It's going to be a hard one when you are $700/month in the hole and no longer saving anything at all.
The OP has $67,000 in a taxable account. If the mom takes a year off to spend with the kid, they might use like 12% of the taxable account. While $700 a month in the hole might not be easy, it's also not the end of the world for the OP since they have a large taxable account.

I feel that people here are having a hard time with what I'm saying. I am not passing judgment on family choices. All I am saying is that daycare is expensive and often can wipe out most or all of one's income, especially since daycare is paid for with mostly after tax dollars. Having a couple kids in daycare can easily equal the salary of one parent (usually but not always the moms).

Often moms stay home with the kids when they are infants and then go back to the workforce when the kids are older (maybe 1, 2, or 5). They have plenty of money to provide that as an option for the OP's family. By having a large amount of taxable, they've have options available.

I don't see it as the crisis everyone is seeing it.
For what it's worth, I mostly agree with yours posts in this thread. If daycare expenses are almost as much as the take-home pay that a parent would earn, then it may make more sense to stay home. There are benefits to staying home with your infant child that cannot be seen in your net worth and financial statements. Of course the pros/cons of this choice are highly individualized.

My wife and I are in our mid-30s, have a lot of student loan debt (~$130k), have a $2k/mo housing payment (mortgage, PMI, insurance, and property taxes), and don't really have that much in savings (~$20k). I recently changed employers and got a nice pay raise, so we are now able to put more away each month (i.e., currently building up our emergency fund at the rate of ~$1k/mo). My wife is specially trained in a pretty niche field. If she works full time, she'd make as much as I do (~$75k/yr). However, she says she mentally cannot do that, partly because, since she works much closer to where we live and where our kids go to daycare/school, she tends to have much more of the pickup/drop-off responsibilities. So, she works about 3/4 time now. Note that she was let go from her last job when she was 36 weeks pregnant. We debated about getting a hold of a lawyer, but the risk of poisoning the well (there are very limited job options for her close to where we live) and the fact that she wasn't entirely satisfied at that job led us to opt out of pursuing legal action (that is, if she "won" anything, she wouldn't want to go back to work for them anyway after the way things ended).

Sure, she could work full time now, and we'd have more money, but our youngest then would be in daycare from ~8 am until 6 pm every weekday, and we'd need to pay for after-school care for our other child. We'd both get home about 6:30 pm every night, and be stressed trying to get dinner made and eaten, spend some quality time with the kids, and get them to bed by 8 pm. She did not like that plan, and I'm fully supportive of her decision not to work full time, even if the extra income would give us more breathing room. In addition, even though she's in a specialty field, she's never actually gotten any real benefits that come with working full time (no employer-sponsored retirement plan, no health insurance, no paid time off, etc.). This is generally possible because I have a stable job that provides insurance, and we're not able to max out my retirement contributions, so her not having employer-sponsored retirement hasn't been a big issue yet (though we did start an IRA for her this year). If I were more concerned about my own job and pay prospects, I'd be more concerned about our long-term financial health, though.

KlangFool
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Re: Dear wife quits job and now we are down to 1 income

Post by KlangFool » Wed Jan 24, 2018 3:39 pm

Applestock wrote:
Wed Jan 24, 2018 9:51 am
Hi all,

First post so please be gentle.

Background Info:
Me: 41- Income 72k/yr
DW: 33- was making 70k/yr. Now 0.
Son: 5 months

Debt: Mortgage 10 yrs left @3.2%. No other debt.
Monthly Expenses: about 5.5k/ month
Emergency Fund: 67k in savings earning 0.0000001%

DW comes back from 3 month maternity leave and her job is not the same (DW states Management not treating her the same) Everyday she would literally comeback miserable. The final straw was when DW had a huge disagreement with Management. She submitted her resignation last Friday.

We already had a budget in place, but we sat down over the weekend to see what else can be cut down. We got our expenses down to 5.5k/month,we cut down retirement savings to 0, Extra principal payment towards house, etc.

We will be approximately -700 every month.
Applestock,

1) You are making 72K per year. After cutting away a bunch of expenses, your annual expense is 66K per year. You believe that you are only down $700 per month? The numbers do not add up.

2) It is very simple. This is a wake-up call. What is your family's priority in life? There is not enough money for everything. You may be able to continue this path temporary with your emergency fund. But, it is not sustainable.

3) Even with your wife's full-time job and income, I do not believe you save any significant amount of money. And, with a new baby, your cash flow will be severely stressed even with her job. So, I do not believe your former lifestyle is sustainable even with your wife's income.

4) In summary, it has nothing to do with whether your wife gets another job. You need to cut your living expense significantly. In general, for folks in your income level, it comes down to the house.

KlangFool

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greg24
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Re: Dear wife quits job and now we are down to 1 income

Post by greg24 » Wed Jan 24, 2018 4:05 pm

I believe that your monthly deficit may be larger than $700.

You need to get that $5.5k number lower. It is possible, find a way.

Your $67k emergency fund should be earning at least 1%. Such a change would cover roughly one month of deficit.

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wander
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Re: Dear wife quits job and now we are down to 1 income

Post by wander » Wed Jan 24, 2018 4:08 pm

I don't know about you but $5.5k a month expense is quite high and easy to cut it down if you try.

AlwaysBeClimbing
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Re: Dear wife quits job and now we are down to 1 income

Post by AlwaysBeClimbing » Wed Jan 24, 2018 4:15 pm

Too little info to make any recommendation, other than maybe to take a couple of weeks to let things settle and then see where wife's head is at. The ball is really in her court(more than yours). Good luck.

mrpotatoheadsays
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Re: Dear wife quits job and now we are down to 1 income

Post by mrpotatoheadsays » Wed Jan 24, 2018 4:24 pm

Sorry, but it sounds like you got hit by an emotional (or overly-emotional) new mother. I wouldn't expect her to work any time soon.

You're gonna have to cut your living expenses... sell fancy new cars to cut insurance cost and pocket money, cut cable/satellite, cut cell phone plans, no eating out, no vacations, etc. You may even have to downsize your home.

Finridge
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Re: Dear wife quits job and now we are down to 1 income

Post by Finridge » Wed Jan 24, 2018 4:47 pm

greg24 wrote:
Wed Jan 24, 2018 4:05 pm

Your $67k emergency fund should be earning at least 1%. Such a change would cover roughly one month of deficit.
Came back here to say this, but Greg beat me to it...

This is low-hanging fruit. You can invest the $67k into a high interest savings account that allows for immediate withdrawal and is FDIC insured. You should do this right away.

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BolderBoy
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Re: Dear wife quits job and now we are down to 1 income

Post by BolderBoy » Wed Jan 24, 2018 5:03 pm

soccerrules wrote:
Wed Jan 24, 2018 2:41 pm
take 30 days to breath. Let your wife unwind emotionally from the resignation/work situation. In 1-2 weeks you both will be in a better place to discuss next steps.
Take $700 from EF to cover expenses.
Best suggestions I've seen so far.

There is wiggle room for a bit. A new baby in the house is exhausting.
"Never underestimate one's capacity to overestimate one's abilities" - The Dunning-Kruger Effect

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Re: Dear wife quits job and now we are down to 1 income

Post by rcjchicity » Wed Jan 24, 2018 5:06 pm

Hikes_With_Dogs wrote:
Wed Jan 24, 2018 2:57 pm
kerplunk wrote:
Wed Jan 24, 2018 1:04 pm
Sounds like she wants to be a stay-at-home mom for the rest of her life. Otherwise, she would/should have found a another job before quitting.
That is a bizarre assumption considering she hasn't posted here and there is scant little information about what she actually wants in this thread.

If my job was making me miserable every day of my life, and I was still recovering from having a baby, probably not getting enough sleep, lactating, and healing from childbirth and we were financially stable - I'd probably quit without another job lined us as well.
I keep thinking this as well - "what does she want?" And it's very likely that at this point, she doesn't know what she wants, but is overwhelmed by a baby and working full time, and reached her breaking point.

When my children were infants, especially with my second, I was working full time, but had only been getting 3, maybe 4 hours of sleep/day for months. Even though my company has received "Working Mother 100 Best Company" awards for years, with onsite childcare, private lactation rooms everywhere, etc. working was extremely tough. I was physically and mentally drained - particularly when breastfeeding and pumping 3 x/day.

Give her some time to be able to express what she wants to do - without the fog and pressure of a lousy work environment hanging over her. Meanwhile, you examine the budget, with strong consideration of what housing costs contribute to your expenses. Then, when both of you are ready, have a big heart to heart conversation about your household finances and where to go from here.

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Re: Dear wife quits job and now we are down to 1 income

Post by LadyGeek » Wed Jan 24, 2018 5:26 pm

I removed several off-topic posts and replies, continuity is lost. I also removed an off-topic post (sexist remark) which derailed the thread. As a reminder, see: General Etiquette
We expect this forum to be a place where people can feel comfortable asking questions and where debates and discussions are conducted in civil tones.

...avoid profanities, obscenities, lewd and otherwise offensive words and remarks
Please stay on-topic, which is to help the OP.
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Applestock
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Re: Dear wife quits job and now we are down to 1 income

Post by Applestock » Wed Jan 24, 2018 6:09 pm

Hikes_With_Dogs wrote:
Wed Jan 24, 2018 12:52 pm
I guess it depends what you and your wife ultimately decide is the right thing to do with your family. The good news is you are on pretty solid footing and don't have to make rash judgments. You have a healthy EF and have some time to do some soul searching and figure out the best course of action.

First, is your wife, in general, happy and healthy following pregnancy and birth? Make sure there is no PPD entering into the picture before you make big decisions.

Second, does your wife want to work? Or is she interested in staying home with the kiddo for awhile? Does she just want a different job?

Third, I'm guessing (but not sure) that you could get your expenses down quite a bit. It might be harder (canceling cable, going down to one vehicle, etc) than you expect but usually there's always room to trim. Especially since now you shouldn't have child care expenses. Check out MMM if you want to know more.

Fourth, at -700 a month, you could use your emergency fund to cover this deficit until your son is in school full time. That's not to say this a good idea but you are doing ok and have a large emergency fund so you DO have options.

Fifth, given the size of your EF, I would not stop retirement savings. I would stop extra contributions to the house payment.

Best of luck with whatever you decide.
1. Yes, she is interested in working. The plan was always for her to go back to work after her maternity leave. She loved her job before maternity leave when she came back things changed. Yes, need to look into cutting down budget some more.

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Applestock
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Re: Dear wife quits job and now we are down to 1 income

Post by Applestock » Wed Jan 24, 2018 6:11 pm

miamivice wrote:
Wed Jan 24, 2018 12:55 pm
How many kids do you and your wife want?

I don't know your area, but daycare for 1 kid costs around $20k/year aftertax (maybe $28k pretax.) If you are thinking about having a baby brother or sister at some point, you'll be paying about $56k pretax dollars in child care.

If your wife is interested in raising them at home, you might find there isn't much difference financially whether she works or stays home for the next few years.
We have talked about it before, but for now only 1.

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Applestock
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Re: Dear wife quits job and now we are down to 1 income

Post by Applestock » Wed Jan 24, 2018 6:12 pm

dm200 wrote:
Wed Jan 24, 2018 12:58 pm
1. You seem in good shape to deal with this - short term at least.

2. Perhaps MOST important - what does SHE want to do?

3. IMO, paying down extra on the house is at the lowest priority
Yes, she needs to figure out what she wants to do and I will support her decision within reason.

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Applestock
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Re: Dear wife quits job and now we are down to 1 income

Post by Applestock » Wed Jan 24, 2018 6:13 pm

N10sive wrote:
Wed Jan 24, 2018 12:58 pm
Can you change your withholdings from your paycheck now? Having a kid and reducing your gross income in half I imagine your taxes will be drastically different this year allowing to increase your withholdings from each paycheck and maybe be able to recoup the 700.
Yes, good idea. Ill contact my HR department.

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Applestock
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Re: Dear wife quits job and now we are down to 1 income

Post by Applestock » Wed Jan 24, 2018 6:17 pm

KlangFool wrote:
Wed Jan 24, 2018 1:03 pm
OP,

1) Move to a cheaper house or rent.

2) How much of the 5.5K is tied to the house?

3) What is the price of the house?

KlangFool
1. At this time we wouldn't want to that. If we didn't have an EF then I would agree.
2. About 1.9k
3. House valued at 480K, we owe about 121K

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Applestock
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Re: Dear wife quits job and now we are down to 1 income

Post by Applestock » Wed Jan 24, 2018 6:18 pm

kerplunk wrote:
Wed Jan 24, 2018 1:04 pm
Sounds like she wants to be a stay-at-home mom for the rest of her life. Otherwise, she would/should have found a another job before quitting.
Not the case.

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Applestock
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Re: Dear wife quits job and now we are down to 1 income

Post by Applestock » Wed Jan 24, 2018 6:19 pm

TravelforFun wrote:
Wed Jan 24, 2018 1:13 pm
Applestock, $5,500 expenses a month? If this is after-tax amount, your income alone won't sustain it. If your wife decided to stay home, you're gonna have to find other cuts in your budget (childcare, entertainment, etc.), take on a part-time job, or do both. I did that every time we had a new child, and we have three kids.

TravelforFun
Yes, after taxes expenses.

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Applestock
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Re: Dear wife quits job and now we are down to 1 income

Post by Applestock » Wed Jan 24, 2018 6:22 pm

HomerJ wrote:
Wed Jan 24, 2018 1:15 pm
Applestock wrote:
Wed Jan 24, 2018 9:51 am
Hi all,

First post so please be gentle.

Background Info:
Me: 41- Income 72k/yr
DW: 33- was making 70k/yr. Now 0.
Son: 5 months

Debt: Mortgage 10 yrs left @3.2%. No other debt.
Monthly Expenses: about 5.5k/ month
Emergency Fund: 67k in savings earning 0.0000001%

DW comes back from 3 month maternity leave and her job is not the same (DW states Management not treating her the same) Everyday she would literally comeback miserable. The final straw was when DW had a huge disagreement with Management. She submitted her resignation last Friday.

We already had a budget in place, but we sat down over the weekend to see what else can be cut down. We got our expenses down to 5.5k/month,we cut down retirement savings to 0, Extra principal payment towards house, etc.

We will be approximately -700 every month.

Options:
1. DW finds a full time job
2. DW finds a part time job
3. DW stays at home with Son

Any suggestions and or advice? What is the longest DW should stay at home with son?

I am concerned that we will not be saving for retirement or paying down house while wife is at home.
You only list your emergency fund. Do you have substantial other assets?

If that $67,000 is 10% of your total money, I suppose you could spend $30,000 of it while the wife stays home for a few years. Not saving anything at all during that time will hurt, but if you already have a good chunk saved, it might be doable.

If that $67,000 is 50% of your total money, I think it would be a very bad idea for her to stay home for years.

I think the wife should look for a part-time job, but she can be picky which one she takes. You have some time with that large emergency fund.

It's one thing to stay home with the kids and spend and save less. It's quite another to stay home and bleed NEGATIVE 700 dollars every month.

If you can't get the expenses down farther, she's going to have to go back to work sometime. And soon, if you guys don't already have a big retirement account.
Not a big retirement account only about 85k, most of the $$$ went to pay down house.

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Applestock
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Re: Dear wife quits job and now we are down to 1 income

Post by Applestock » Wed Jan 24, 2018 6:23 pm

matt fe2o3 wrote:
Wed Jan 24, 2018 1:24 pm
Applestock wrote:
Wed Jan 24, 2018 9:51 am
Hi all,

First post so please be gentle.

Background Info:
Me: 41- Income 72k/yr
DW: 33- was making 70k/yr. Now 0.
Son: 5 months

Debt: Mortgage 10 yrs left @3.2%. No other debt.
Monthly Expenses: about 5.5k/ month
Emergency Fund: 67k in savings earning 0.0000001%

DW comes back from 3 month maternity leave and her job is not the same (DW states Management not treating her the same) Everyday she would literally comeback miserable. The final straw was when DW had a huge disagreement with Management. She submitted her resignation last Friday.

We already had a budget in place, but we sat down over the weekend to see what else can be cut down. We got our expenses down to 5.5k/month,we cut down retirement savings to 0, Extra principal payment towards house, etc.

We will be approximately -700 every month.

Options:
1. DW finds a full time job
2. DW finds a part time job
3. DW stays at home with Son

Any suggestions and or advice? What is the longest DW should stay at home with son?

I am concerned that we will not be saving for retirement or paying down house while wife is at home.
I don't know what State you are in. If in California or a more progressive State wife should file for unemployment benefits citing working conditions after maternity leave. Basically it should be a slam dunk - though it may take some time - its usually retroactive.

In going that route - remove all emotion - state facts and hostile work conditions forcing her out as discriminatory - she should get benefits, or at least may get them. In Calif that's roughly 2k a month so that will temper the panic you see.

On your savings - go out and shop some CDs you can get anywhere from 1% to 3% depending on duration. Read the fine print - but usually you are oly out interest for if you take 40K over a couple years - yea it's not a lot but it could pay a few months of groceries. Stay conservative.

5500/month is pretty big nut. Re-evaluate what you can. DO NOT have her start a self employed/consulting gig unless you understand the self employment tax, local business license and sales tax issues - or you can find yourself poorer for the effort. Especially if not done right. The States, counties and cities mine IRS and tax board data and if you do it wrong it's expensive.
Yes, I will transfer $$$ to capital one MMA or ally to earn higher interest.

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Applestock
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Re: Dear wife quits job and now we are down to 1 income

Post by Applestock » Wed Jan 24, 2018 6:26 pm

DCChak wrote:
Wed Jan 24, 2018 1:29 pm
HomerJ wrote:
Wed Jan 24, 2018 1:15 pm
You only list your emergency fund. Do you have substantial other assets?
This x 1000. Are you holding "Applestock" with substantial gains? What about your current retirement holdings and asset allocation? Any pensions? Expected inheritances?

All that said, you've probably got a bigger issue managing what appears to be postpartum depression in your wife. Might want to focus on helping with that first before making any rash housing or other financial moves.
Retirement not looking good right now only 85k. Ill post retirement holdings.

N10sive
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Re: Dear wife quits job and now we are down to 1 income

Post by N10sive » Wed Jan 24, 2018 6:27 pm

Applestock wrote:
Wed Jan 24, 2018 6:17 pm
KlangFool wrote:
Wed Jan 24, 2018 1:03 pm
OP,

1) Move to a cheaper house or rent.

2) How much of the 5.5K is tied to the house?

3) What is the price of the house?

KlangFool
1. At this time we wouldn't want to that. If we didn't have an EF then I would agree.
2. About 1.9k
3. House valued at 480K, we owe about 121K
While you weren't house poor when you had dual income 30% now is pretty high. I would really do refinance to a 30 year mortgage. That will help you out a lot. Then you can contribute to retirement accounts and be okay with meeting your monthly expenses. Only 85k in the retirement accounts is worrisome unless you have a pension.

$3600 in expenses a month is quite a lot given the fact your mortage is only $1900. I imagine you can cut that down a lot if you really wanted to. Especially having no other debt.

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Applestock
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Re: Dear wife quits job and now we are down to 1 income

Post by Applestock » Wed Jan 24, 2018 6:29 pm

HomerJ wrote:
Wed Jan 24, 2018 1:37 pm
Another option might be to refinance the house to a new 30-year mortgage.

That could lower the monthly expenses quite a bit. Then, once she is working again, or you're making more money, you can make extra payments again.
Its an option, but not considering that right now. DW might go back to work in a month or 2 for all I know.

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Applestock
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Re: Dear wife quits job and now we are down to 1 income

Post by Applestock » Wed Jan 24, 2018 6:33 pm

climber2020 wrote:
Wed Jan 24, 2018 1:49 pm
Applestock wrote:
Wed Jan 24, 2018 9:51 am

Monthly Expenses: about 5.5k/ month
You need to get this down. A lot. Unless you bought a ridiculous house (very common, unfortunately), you should be able to reduce this number by quite a bit.

Can you break down your monthly expenses? I'm sure people can help point out areas where you can cut costs until your combined income goes back up.
ill post breakdown at beginning.

chessknt
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Re: Dear wife quits job and now we are down to 1 income

Post by chessknt » Wed Jan 24, 2018 6:37 pm

WpgGuy wrote:
Wed Jan 24, 2018 1:08 pm


This is a very old fashion way of thought. Even if it’s break even, a spouse *should* continue to work to maintain their skills and career prospects, especially one who was pulling in 70k (!!). It is well understood that women take huge future earnings hits by doing this, it’s bad for equality, it’s bad for your future and it sets the wrong example for children (especially daughters).

This isn’t 1978, it’s 2018. Sorry to push back hard, on this but reasoning like this needs to be tempered. It’s old, it’s out of date.
Posts like this make me so sad. Looking down on a woman because she chooses to stay home and raise/care fot her family because it is expected that her career should define her is just as bad as assuming the opposite. I know plenty of sahm's who set an incredible example for their kids. Too many people think like this...

To op--it sounds like this wasn't planned so I would first try to have an honest discussion over what is going through her head to get an idea of what your options are.

veindoc
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Re: Dear wife quits job and now we are down to 1 income

Post by veindoc » Wed Jan 24, 2018 6:44 pm

Rather than refinance , can you see if they will recast the mortgage? Base the payment based on what you owe now. That should lower the payment.

retire57
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Re: Dear wife quits job and now we are down to 1 income

Post by retire57 » Wed Jan 24, 2018 7:22 pm

Cut your budget to the bone. Your wife's FT job is now home economist. No eating out, menu plan, shop using grocery circulars. Thrift stores for family clothing and shoes. Cut cable, read library books, take up hiking. With no debt but your house, you can live very well on your salary. And continue saving!

runner540
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Re: Dear wife quits job and now we are down to 1 income

Post by runner540 » Wed Jan 24, 2018 7:50 pm

LadyGeek wrote:
Wed Jan 24, 2018 5:26 pm
I removed several off-topic posts and replies, continuity is lost. I also removed an off-topic post (sexist remark) which derailed the thread. As a reminder, see: General Etiquette
We expect this forum to be a place where people can feel comfortable asking questions and where debates and discussions are conducted in civil tones.

...avoid profanities, obscenities, lewd and otherwise offensive words and remarks
Please stay on-topic, which is to help the OP.
Thank you!! I saw it and didn't have time to log in and report, but I'm glad that this can be a place where sexism and mommy wars/gender roles are off limits.

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Cobra Commander
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Re: Dear wife quits job and now we are down to 1 income

Post by Cobra Commander » Wed Jan 24, 2018 8:06 pm

How much, if any, of that expense is daycare? You could cut that obviously if she stays home. OTOH, daycare slots are scarce in some places so if she is still deciding you may need to keep paying to hold the slot.

denovo
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Re: Dear wife quits job and now we are down to 1 income

Post by denovo » Wed Jan 24, 2018 8:23 pm

Applestock wrote:
Wed Jan 24, 2018 9:51 am


Any suggestions and or advice? What is the longest DW should stay at home with son?

I am concerned that we will not be saving for retirement or paying down house while wife is at home.
1. Put your savings in a better interest-bearing account.
2. Refinance to a 30 yr.
3. Post budget on top of the thread to be examined
4. Post your 401k-allocation to make sure everything is ok.

But at the end of the day, I think this is all shuffling chairs on the deck of a sinking ship. I doubt any of the above will be enough to eliminate your deficit and allow you to save for retirement. You guys need more income period. Whether that comes from you getting a 2nd job or her working is a family discussion.
"Don't trust everything you read on the Internet"- Abraham Lincoln

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2pedals
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Re: Dear wife quits job and now we are down to 1 income

Post by 2pedals » Wed Jan 24, 2018 8:32 pm

Applestock wrote:
Wed Jan 24, 2018 9:51 am

We will be approximately -700 every month.

Options:
1. DW finds a full time job
2. DW finds a part time job
3. DW stays at home with Son

Any suggestions and or advice? What is the longest DW should stay at home with son?

I am concerned that we will not be saving for retirement or paying down house while wife is at home.
Applestock

I think it is wonderful that your DW quit her job and will be spending that time with your Son. At this age your family memories are priceless and a young child needs to be nurtured and loved. I would take some time looking at how you and her could improve your income to make ends meet and cut costs. Can you work overtime? Can DW find a better job closer to home? Maybe she can find a higher paying job and you could be a stay at home Dad to ease her concerns.
Last edited by 2pedals on Wed Jan 24, 2018 9:10 pm, edited 1 time in total.

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WpgGuy
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Re: Dear wife quits job and now we are down to 1 income

Post by WpgGuy » Wed Jan 24, 2018 9:01 pm

chessknt wrote:
Wed Jan 24, 2018 6:37 pm
WpgGuy wrote:
Wed Jan 24, 2018 1:08 pm


This is a very old fashion way of thought. Even if it’s break even, a spouse *should* continue to work to maintain their skills and career prospects, especially one who was pulling in 70k (!!). It is well understood that women take huge future earnings hits by doing this, it’s bad for equality, it’s bad for your future and it sets the wrong example for children (especially daughters).

This isn’t 1978, it’s 2018. Sorry to push back hard, on this but reasoning like this needs to be tempered. It’s old, it’s out of date.
Posts like this make me so sad. Looking down on a woman because she chooses to stay home and raise/care fot her family because it is expected that her career should define her is just as bad as assuming the opposite. I know plenty of sahm's who set an incredible example for their kids. Too many people think like this...

To op--it sounds like this wasn't planned so I would first try to have an honest discussion over what is going through her head to get an idea of what your options are.
Please don’t be overly sensitive, I’m not looking down on anyone. The position for which I advocate is to not nudge or “suggest” a spouse give up their career; or even assume a spouse is OK with this (even if they quit their job).

Men in this day in age should be willing and offering to put their careers on hold (taking the career hit), or they shouldn’t be asking the same of their spouse.

If on the other hand, after reflection, a spouse does not wish to work anymore and is ok with the consequences, awesome.

Given the reactions to this position, it seems we have a ways to go in our society. This makes me so sad.

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cockersx3
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Re: Dear wife quits job and now we are down to 1 income

Post by cockersx3 » Wed Jan 24, 2018 9:21 pm

N10sive wrote:
Wed Jan 24, 2018 12:58 pm
Can you change your withholdings from your paycheck now? Having a kid and reducing your gross income in half I imagine your taxes will be drastically different this year allowing to increase your withholdings from each paycheck and maybe be able to recoup the 700.
+1. When my wife left her job to stay home with the kids, this is the one big thing that I misunderestimated. I assumed that our monthly take-home would be whatever it was from when she and I both were working, minus her take home pay. The giant tax refund we got the next spring was a big surprise. Ended up adjusting withholding and saving the extra.

beachplum
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Re: Dear wife quits job and now we are down to 1 income

Post by beachplum » Wed Jan 24, 2018 9:24 pm

chessknt wrote:
Wed Jan 24, 2018 6:37 pm
WpgGuy wrote:
Wed Jan 24, 2018 1:08 pm


This is a very old fashion way of thought. Even if it’s break even, a spouse *should* continue to work to maintain their skills and career prospects, especially one who was pulling in 70k (!!). It is well understood that women take huge future earnings hits by doing this, it’s bad for equality, it’s bad for your future and it sets the wrong example for children (especially daughters).

This isn’t 1978, it’s 2018. Sorry to push back hard, on this but reasoning like this needs to be tempered. It’s old, it’s out of date.
Posts like this make me so sad. Looking down on a woman because she chooses to stay home and raise/care fot her family because it is expected that her career should define her is just as bad as assuming the opposite. I know plenty of sahm's who set an incredible example for their kids. Too many people think like this...

To op--it sounds like this wasn't planned so I would first try to have an honest discussion over what is going through her head to get an idea of what your options are.
So glad to see there are people on this forum who aren't so judgmental. It's obvious that anyone posting that a women not working to care for a child sets the wrong example for children (especially daughters) either doesn't know what they are talking about and or hasn't known the many women who have been and are stay at home moms who raised children and set excellent examples (regardless of the era). BTW, this also applies to all the men who stay home to raise children who also set excellent examples. Your right it's not 1978, when often society wasn't so kind to stay at home moms. They weren't always considered worthy of any attention by those people who did work. I would like to think we've progressed since that time. but apparently not enough.

FraggleRock
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relax

Post by FraggleRock » Wed Jan 24, 2018 9:30 pm

Take a deep breath.
Do nothing for a week.
Stay away from here.
Relax.

See you in 2 weeks.

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randomizer
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Re: Dear wife quits job and now we are down to 1 income

Post by randomizer » Wed Jan 24, 2018 9:39 pm

Applestock wrote:
Wed Jan 24, 2018 9:51 am
Options:
1. DW finds a full time job
2. DW finds a part time job
3. DW stays at home with Son

Any suggestions and or advice? What is the longest DW should stay at home with son?
I think it is something for you to talk about with her, probably a lot. It may be a tough conversation. Ultimately, a large portion of the decision will likely fall on her. You can focus on the things that are in your power to change, like developing your earning potential.
87.5:12.5, EM tilt — HODL the course!

crit
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Re: Dear wife quits job and now we are down to 1 income

Post by crit » Wed Jan 24, 2018 9:42 pm

I agree with Fraggle.

Original poster, you sound pretty stressed. In a year, you've had a lot of big changes. Both you and your wife are new parents (congrats), and that comes with lots of joy, and stress.

Obviously, your situation wouldn't be tenable for 10 or 20 years, but ... you know that, and you'll make adjustments. People here lean towards financially conservative, so you're getting (good) conservative advice. But really, you can afford to chill for a month or six, and adjust. I think that's your biggest need here. Even a refi can wait.

Take care of your relationship first. If your wife felt the need to quit that abruptly ... talk to her. Listen to her. Take care of that first, and you'll figure out the money together.

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TxAg
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Re: Dear wife quits job and now we are down to 1 income

Post by TxAg » Wed Jan 24, 2018 9:59 pm

Sending a child to daycare is not insensitive and doesn’t mean your child is unloved. It can be a hot button issue, but there is no right or wrong answer...it is dynamic and depends on personalities and income levels.

In your situation, given your expenses and savings, I’d want her to get back to work asap!! For reference, I have 2 kiddos under 4, and we both work. Daycare is phenomenal and our children flourish. It costs $20k/yr total.

OldSport
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Re: Dear wife quits job and now we are down to 1 income

Post by OldSport » Wed Jan 24, 2018 10:04 pm

miamivice wrote:
Wed Jan 24, 2018 12:55 pm
How many kids do you and your wife want?

I don't know your area, but daycare for 1 kid costs around $20k/year aftertax (maybe $28k pretax.) If you are thinking about having a baby brother or sister at some point, you'll be paying about $56k pretax dollars in child care.

If your wife is interested in raising them at home, you might find there isn't much difference financially whether she works or stays home for the next few years.
$28k daycare for 1 kid?? Where is this?? That is crazy expensive!! A top notch program in my area is ~$1k/month before tax.

DriveMyPrius
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Re: Dear wife quits job and now we are down to 1 income

Post by DriveMyPrius » Wed Jan 24, 2018 10:05 pm

OP's wife is 33 years old. It's not as if the retirement ship has sailed and they can now only look forward to a future of cat food dinners.

OP, when I was the young mother of a five month old, I was exhausted and tapped out. I wasn't thinking clearly because of hormones and sleep deprivation. Why not just take a breather and make a decision in a month? Your wife might have a completely different perspective at that point. Some other ideas: consider being a day care provider, consider working at the same profession for a different employer, or take a temporary part time job.

As far as the comments about a SAHM not "setting a good example" - I can't post what I really think about that without getting banned. Suffice it to say that my own daughter was raised by a SAHM and has done nothing but achieve and excel in school and work. Thankfully she didn't let my very "bad" example ruin her! :|

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Applestock
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Re: Dear wife quits job and now we are down to 1 income

Post by Applestock » Wed Jan 24, 2018 10:46 pm

an_asker wrote:
Wed Jan 24, 2018 2:01 pm
Applestock wrote:
Wed Jan 24, 2018 9:51 am
Hi all,

First post so please be gentle.

Background Info:
Me: 41- Income 72k/yr
DW: 33- was making 70k/yr. Now 0.
Son: 5 months

Debt: Mortgage 10 yrs left @3.2%. No other debt.
Monthly Expenses: about 5.5k/ month
Emergency Fund: 67k in savings earning 0.0000001%

DW comes back from 3 month maternity leave and her job is not the same (DW states Management not treating her the same) Everyday she would literally comeback miserable. The final straw was when DW had a huge disagreement with Management. She submitted her resignation last Friday.

We already had a budget in place, but we sat down over the weekend to see what else can be cut down. We got our expenses down to 5.5k/month,we cut down retirement savings to 0, Extra principal payment towards house, etc.

We will be approximately -700 every month.

Options:
1. DW finds a full time job
2. DW finds a part time job
3. DW stays at home with Son

Any suggestions and or advice? What is the longest DW should stay at home with son?

I am concerned that we will not be saving for retirement or paying down house while wife is at home.
Not enough information to provide suggestions/answers/advice. Need to know at least:

- is DW planning to return to work? If not now, then when?
- what's DW's field? Is it easy or tough to get a job in that field?
- break out of monthly expenses to see which are necessary and which are fluff.

BTW, FWIW we've been there done that (with one exception - in our case, she didn't quit because of any disagreement; just wanted to spend more time with son). Years down the road, ... no biggie.
I need to have that discussion with DW. Ill post budget on top. I don't she will have a problem getting a job.

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Applestock
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Re: Dear wife quits job and now we are down to 1 income

Post by Applestock » Wed Jan 24, 2018 10:48 pm

ICMoney wrote:
Wed Jan 24, 2018 2:32 pm
OP, congratulations on your growing family! Not sure the circumstances at your wife's former place of employment of course, but "mommy tracking" women is real and I appreciate that could be in play here. I'm sorry she's had to go through all of this at such a special time in your family's life.

I started a thread related to our stay-at-home mom decision a few weeks ago (viewtopic.php?f=1&t=235516&p=3680209) - the numbers and replies may be helpful for you to read as our numbers are relatively similar. I also listed out our expenses so maybe that could be a starting point for you to compare yours to (and read some of the replies we got related to expenses, as they were helpful).

Best,
ICM
Ok thanks ill check it out. Congratulations and Good luck to you as well.

cherijoh
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Re: Dear wife quits job and now we are down to 1 income

Post by cherijoh » Wed Jan 24, 2018 10:49 pm

Applestock wrote:
Wed Jan 24, 2018 9:51 am
Hi all,

First post so please be gentle.

Background Info:
Me: 41- Income 72k/yr
DW: 33- was making 70k/yr. Now 0.
Son: 5 months

Debt: Mortgage 10 yrs left @3.2%. No other debt.
Monthly Expenses: about 5.5k/ month
Emergency Fund: 67k in savings earning 0.0000001%

DW comes back from 3 month maternity leave and her job is not the same (DW states Management not treating her the same) Everyday she would literally comeback miserable. The final straw was when DW had a huge disagreement with Management. She submitted her resignation last Friday.

We already had a budget in place, but we sat down over the weekend to see what else can be cut down. We got our expenses down to 5.5k/month,we cut down retirement savings to 0, Extra principal payment towards house, etc.

We will be approximately -700 every month.

Options:
1. DW finds a full time job
2. DW finds a part time job
3. DW stays at home with Son

Any suggestions and or advice? What is the longest DW should stay at home with son?

I am concerned that we will not be saving for retirement or paying down house while wife is at home.
Your current position is not viable for anything but the short term, so I would say option 3 is out unless you make some big changes and can be cash flow positive while contributing something towards retirement.

However, the fact that you were looking at how to trim the budget AFTER your wife quit her job suggests that her decision to quit was emotional/spur of the moment rather than rational and well-thought out. ( If it were the latter, she would have taken the weekend to cool off and crunch the numbers to see if you could afford to be a single income household before she quit). This tells me that she probably needs more time to adjust to being a mom before she looks for a new FT position. A low stress part-time job might be a good stop-gap solution, but it might be tough to find something that nets money if it means putting the baby in daycare. Watching another baby in your home or doing something like pet-sitting might work.

You avoided mentioning the amount of your mortgage, so I suspect that you might not have qualified for the mortgage had your wife not been working and that it currently represents the lion's share of your expenses. Is this a 30-yr mortgage that you have been paying down aggressively (to the point that it will be paid off in ten years) or did you start with a 15-year mortgage? If you have been aggressively paying down your mortgage, you could check with your lender to see if they would be willing to do a recast. Not all lenders offer the option, but it is probably worth investigating. That would maintain the interest rate and original term of your loan but will reduce the monthly payment going forward. This could take a chunk out of your negative cash flow issue. Another option would be to refinance to a longer term mortgage to reduce the payment, but you might have to take a hit on the interest rate.

Where do you stand regarding retirement savings? How much were you saving when you were a two-income household?

getthatmarshmallow
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Re: Dear wife quits job and now we are down to 1 income

Post by getthatmarshmallow » Wed Jan 24, 2018 10:51 pm

4-6 months old, IME, was the worst time for me with a baby, both times. Their schedule shifts as they move out of newborn rhythms, and they're rarely content, and you're out of parental leave. My son developed a timbre in his shriek that shredded my nerves. There's a reason bad guys use sleep deprivation are torture. It might not be a bad idea to raise the question of PPD/PPA with her. It's totally normal, nothing to be ashamed of, and easily treated.

You have an emergency fund, and I imagine a little room for belt tightening. On the assumption that you're not house-poor, you can probably easily find $700 in the budget to break even for a while while DW figures out her next steps.

Topic Author
Applestock
Posts: 37
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Re: Dear wife quits job and now we are down to 1 income

Post by Applestock » Wed Jan 24, 2018 10:52 pm

KlingKlang wrote:
Wed Jan 24, 2018 3:04 pm
Just a couple of small suggestions:

That $67k emergency fund could earn about $80/month in interest if you transferred it into a 1.40% online savings or money market account. Every little bit helps.

With your incomes basically cut in half and a new child your income tax bills should be dramatically lower. Have you factored this into your monthly expenses?
Good point, I have not factored this on expenses but I will.

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