Time for twins to go to daycare

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stlbrucefan
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Time for twins to go to daycare

Post by stlbrucefan » Thu Feb 22, 2018 2:28 pm

I love the advice offered on bogleheads, so I know no better place to go with my question that I have...

My wife's maternity leave ends after next week, and we are sending our twins to daycare at the expense of $1000 per month. We have always kept separate checking accounts and have never had a fight over money. We decided I would pay for one kid and she would pay the other, so we are split down the middle at $500.

I use the "pay yourself first" method when it comes to spending/saving my money. I get paid once a month, and two days later, all my money I save or invest is heading to its account. The money I have left over is my living money for the month, including mortgage, utilities, groceries, entertainment, etc. I like to think I'm responsible with my money and don't waste that money that is left in my checking account to get me through the rest of the month.

Here's my question. Where do you recommend that I skimp on my current savings/investing avenues to pay the daycare expenses? Here is my current savings/investing avenues and how much I put into each.

HSA: $250/mo
Roth IRA: $458/mo
Misc. Savings (I use this account to pay for larger, rare expenses, home improvements, vacations, etc.: $250/mo
Savings account for homewoners insurance: $100/mo
Money put into taxable Vanguard account (part of my emergency fund, the rest is in an online savings account): $200/mo. Currently have enough in here to cover 5-6 months of living expenses in case of emergency.

Appreciate any ideas. Thanks.

Darth Xanadu
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Re: Time for twins to go to daycare

Post by Darth Xanadu » Thu Feb 22, 2018 2:35 pm

I would think reduce Misc Savings, Vanguard, and HSA to come up with the $500. Related, have you explored the option of Dependent Care FSA for the tax benefit?
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veindoc
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Re: Time for twins to go to daycare

Post by veindoc » Thu Feb 22, 2018 2:44 pm

Congratulations on the twins!! Twice the fun.

This may sound harsh. You have had nine months and how many months of maternity leave to prepare for daycare expenses and you are asking a week out how to afford it? I know certain couples do this, split housing expenses and bills amongst themselves but I never really understood how that works. We have a joint account that we both contribute to pay for household expenses. I am the one however that pays all the bills from that account.

Are your salaries equal? Is that why you are splitting the twins? If you can’t find money in your budget to pay this, can your spouse swing the $1000. In general the higher earning spouse would take the bulk of the expenses in a manner proportional to the salaries.

But to answer your question based on the information offered it seems the only bucket to take this money out is the vanguard acct and unfortunately either the HSA or Roth. Could you afford this monthly nut without impacting savings? If no i would re-evaluate this arrangement you have with your wife. Where is her money going to?

This reminds me of my unemployed neighbor telling me she was going to have to sell her retirement accounts to pay for her half of the mortgage unless she got another job and fast. Her husband was a high income earner btw but they kept finances separate.
Last edited by veindoc on Thu Feb 22, 2018 2:49 pm, edited 1 time in total.

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ray.james
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Re: Time for twins to go to daycare

Post by ray.james » Thu Feb 22, 2018 2:45 pm

If I understand correctly you are asking which savings to slow down to meet the expenses. If your tax rate is high, I would slow down roth(350) + misc savings(by 150). Once you fill emergency fund to your needed, you can route that money to roth. Does you/spouse have Dependent care FSA.(unrelated but good to understand Dependent care credit works at tax time)

Do you also treat savings as separate or combined?(May not matter in community states. ) It is a bit hard to manage as "mine+ yours" with kids in picture. My wife and I do not have combined accounts, but we treat savings as 'us'. She pays for vacations, insurances, childcare while I pay for house, food, auto, utilities. A 40/60 split. But it is still us, just from where things are paid.
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stlbrucefan
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Re: Time for twins to go to daycare

Post by stlbrucefan » Thu Feb 22, 2018 3:02 pm

veindoc wrote:
Thu Feb 22, 2018 2:44 pm
Congratulations on the twins!! Twice the fun.

This may sound harsh. You have had nine months and how many months of maternity leave to prepare for daycare expenses and you are asking a week out how to afford it? I know certain couples do this, split housing expenses and bills amongst themselves but I never really understood how that works. We have a joint account that we both contribute to pay for household expenses. I am the one however that pays all the bills from that account.

Are your salaries equal? Is that why you are splitting the twins? If you can’t find money in your budget to pay this, can your spouse swing the $1000. In general the higher earning spouse would take the bulk of the expenses in a manner proportional to the salaries.

But to answer your question based on the information offered it seems the only bucket to take this money out is the vanguard acct and unfortunately either the HSA or Roth. Could you afford this monthly nut without impacting savings? If no i would re-evaluate this arrangement you have with your wife. Where is her money going to?

This reminds me of my unemployed neighbor telling me she was going to have to sell her retirement accounts to pay for her half of the mortgage unless she got another job and fast. Her husband was a high income earner btw but they kept finances separate.
Not harsh at all. I get it. I've put a lot of thought into myself before posting it here, just wanted some thoughts. It wasn't a thought that just popped in my head.

It's been a little more difficult for us to save for daycare though because my wife's entire maternity leave was unpaid, so we've been single income for 3 months. We needed to be able to save to offset this as well as buy we needed to get ready for twins. We were able to save about $7000 prior to her leave to cover that, and actually have about $3k left over.

Our salaries aren't equal...I make more than her. The reason why we decided to split was because my financial obligations were slightly higher than hers, so this makes it close to balancing out. She pays for our different insurances, car payment, groceries, etc.

We aren't rich by any means, but we aren't hurting either. That's why I just asked opinions on which it would be okay to save less.

bloom2708
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Re: Time for twins to go to daycare

Post by bloom2708 » Thu Feb 22, 2018 3:12 pm

The only constant is change.

Kids (twins) add a new dimension. This might be a great time to look at your current system and streamline it. Your money is her money. Her money is your money. Your money is "our" money.

Have both checks direct deposited into a new single joint checking account. Wrap up and close both previous checking accounts or transfer a small amount of "blow" money into your personal accounts. All bills are paid from the main checking. All saving is from the joint account or taken out pre-tax.

As your kids grow, you will get busier and busier. One will likely take more of the financial role. One will take more kid responsibilities. That doesn't mean one side checks out of the finances. Use a combiner like Personal Capital or Mint. Both help categorize transactions and make joint decisions. Keep each other updated on all topics.

If your wife is home with a sick kid and you stop for groceries, there isn't room for "you owe me $57 for groceries honey." :wink:

Does your wife follow similar savings? HSA? Roth? Pre-tax 401k? The uneven incomes would make it even harder. Who gets diapers, formula, wipes, kids clothes, 529 contributions? Many new adventures ahead.

Just another perspective. $1,000 for twin infants is very very reasonable.
Last edited by bloom2708 on Thu Feb 22, 2018 3:55 pm, edited 1 time in total.
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Cobra Commander
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Re: Time for twins to go to daycare

Post by Cobra Commander » Thu Feb 22, 2018 3:20 pm

I would add a different perspective than Bloom's. If you wish to continue separate finances consider having a joint account into which you both contribute in some % (possible pro rata by income) from which you pay all of the major joint expenses (mortgage, daycare, groceries, etc.). IMO this approach is a little easier with kids and the random misc. expenses associated with having them.

Back to your question. Savings account for homeowners insurance isn't really a savings account it's just pro-rating an expense so you can't cut that. Agree with Ray James to cut down Roth and Misc. savings if your tax rate is high, otherwise I would cut HSA and Misc.

miamivice
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Re: Time for twins to go to daycare

Post by miamivice » Thu Feb 22, 2018 3:42 pm

I would agree with the others that now is the time you need a joint bank account to pay for joint expenses. Your kids will cost a lot. Food, diapers, toys, extra curricular activities, injuries (trips to the ER). Some expenses might be easy to split like daycare, and some expenses will be very difficult to split, like the extra gas needed to drive them to / from birthday parties and other activities.

With twins as well your time will radically decrease and you'll be hard pressed for a quiet minute to sit down and review your finances, and in a just a few years, your kids will probably consume all of the together time that you have with your wife, and you won't have a free moment to discuss finances. (if you have a free moment you might want to use it for something else besides financial discussions).

Now is the time for each of you to set some of your income into a joint account that you use to jointly pay expenses.

miamivice
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Re: Time for twins to go to daycare

Post by miamivice » Thu Feb 22, 2018 3:46 pm

I misread the original post, so I'm deleting my response.

But to the OP: You say daycare for two infants costs $500 per month per kid, or $12,000 per year? Where in the world do you get daycare that cheap? In my area it runs around $20,000 per year per kid, or about $40,000 for twin infants. And our daycare is relatively cheap compared to many.

Darth Xanadu
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Re: Time for twins to go to daycare

Post by Darth Xanadu » Thu Feb 22, 2018 4:25 pm

Cobra Commander wrote:
Thu Feb 22, 2018 3:20 pm
I would add a different perspective than Bloom's. If you wish to continue separate finances consider having a joint account into which you both contribute in some % (possible pro rata by income) from which you pay all of the major joint expenses (mortgage, daycare, groceries, etc.). IMO this approach is a little easier with kids and the random misc. expenses associated with having them.
I agree. Wife and I each get equal, fixed "discretionary" funds each paycheck into personal accounts. Balance goes to joint accounts. No arguments if/when one of us wants to splurge on something fun/wasteful.
My friends said stick to your guns, but instead I just got stuck.

JBTX
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Re: Time for twins to go to daycare

Post by JBTX » Thu Feb 22, 2018 4:29 pm

As to HSA, at least contribute to it, then use it for medical expenses. That way you’ll get the income tax deduction and FICA deduction if this is through employer.

I have seen several instances where married couples split finances to try to help the relationship and create a feeling of independence. The result is usually not good financially because they both have their own secret spending and end up not saving as much. Once you have kids it really is not the best way to go. Occasionally my DW wants to do this and i always insist that one is a deal breaker.

Snuffycuts99
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Re: Time for twins to go to daycare

Post by Snuffycuts99 » Thu Feb 22, 2018 4:35 pm

miamivice wrote:
Thu Feb 22, 2018 3:46 pm
I misread the original post, so I'm deleting my response.

But to the OP: You say daycare for two infants costs $500 per month per kid, or $12,000 per year? Where in the world do you get daycare that cheap? In my area it runs around $20,000 per year per kid, or about $40,000 for twin infants. And our daycare is relatively cheap compared to many.
Costs vary considerably in different areas of the country. I agree that $1,000 per month is very cheap, and I'm in a low cost area in PA. It would be about $1,500 to $2,000 where I'm at, depending on provider. At your costs, you must be a HCOL area.

Glockenspiel
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Re: Time for twins to go to daycare

Post by Glockenspiel » Thu Feb 22, 2018 4:50 pm

I agree that when you don't have kids, sometimes it's easier to split the bills and have separate accounts, but it truly does simplify everything to have combined accounts once you have kids.

There are going to be a number of expenses that you're going to have to make the same decision on. Daycare, food, diapers, clothing, kids activities, trips to the zoo, school, sports activities, etc, and it's way easier to just adopt the mindset of this is just one big family with one big pot of money.

miamivice
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Re: Time for twins to go to daycare

Post by miamivice » Thu Feb 22, 2018 5:11 pm

Snuffycuts99 wrote:
Thu Feb 22, 2018 4:35 pm
miamivice wrote:
Thu Feb 22, 2018 3:46 pm
I misread the original post, so I'm deleting my response.

But to the OP: You say daycare for two infants costs $500 per month per kid, or $12,000 per year? Where in the world do you get daycare that cheap? In my area it runs around $20,000 per year per kid, or about $40,000 for twin infants. And our daycare is relatively cheap compared to many.
Costs vary considerably in different areas of the country. I agree that $1,000 per month is very cheap, and I'm in a low cost area in PA. It would be about $1,500 to $2,000 where I'm at, depending on provider. At your costs, you must be a HCOL area.
Yeah, I understand it varies. I've just never seen daycare as cheap as $6,000 a year for infants for 1 kid.

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rcjchicity
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Re: Time for twins to go to daycare

Post by rcjchicity » Thu Feb 22, 2018 5:24 pm

Lots of good advice here.

I would echo the comments that say to do a joint account for joint expenses, and contribute proportionally according to your income (taking into consideration "joint"-type items that come out of your individual paychecks, such as family health care coverage). There are just too many one-off kid expenses to try to figure out who should cover what if it's all per individual earner.

And $1,000/mo. for twins (full time?) day care is a steal. We pay about $3,000/mo for a 1- and a 3-year old full time at my employer-sponsored daycare.

Glockenspiel
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Re: Time for twins to go to daycare

Post by Glockenspiel » Thu Feb 22, 2018 5:27 pm

miamivice wrote:
Thu Feb 22, 2018 3:46 pm
I misread the original post, so I'm deleting my response.

But to the OP: You say daycare for two infants costs $500 per month per kid, or $12,000 per year? Where in the world do you get daycare that cheap? In my area it runs around $20,000 per year per kid, or about $40,000 for twin infants. And our daycare is relatively cheap compared to many.
Daycare for my 2-year old at a nice in-home daycare is about $9,500-$10,000 per year in the suburbs of the 16th largest metro area in the country. $20,000 is insane. I know people in rural areas outside the metro who pay about $7,000 a year for daycare per child.

BuckyBadger
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Re: Time for twins to go to daycare

Post by BuckyBadger » Thu Feb 22, 2018 5:51 pm

I realize that some couples maintain separate finances like that after they get married. I don't really understand the point usually, but i realize that it happens.

But i just can't imagine how a family could continue like that after having a kid! Will you split soccer fees half and half? If one of you can't come up with the money does the kid not get to play?

I hope your wife was appropriately penalized for talking 12 weeks of unpaid leave to care for the child that you guys made together. I guess no dinners out for her, huh, what with her not making any money?

Take this opportunity to streamline your finances and combine your resources. Unless one of you has some crazy situation or spending problem there is no reason to keep things separate when you're dealing with a kid.

As others said, not to be harsh, but you need to really consider how this arrangement is going to work long term with the addition of a child. This is going to get a heck of a lot more complicated...

ETA or at least consider doing what Cobra Commander suggests.

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Re: Time for twins to go to daycare

Post by Grt2bOutdoors » Thu Feb 22, 2018 6:11 pm

Consider this: joint account- all money goes in, from that you each get X dollars to spend AFTER mortgage, home insurance, health care, food, clothes (necessities), daycare, baby needs, savings. You need to put priorities in order (not saying you are not), very difficult to keep track who is paying for what or if you have enough to cover monthly nut. Kids in picture as noted creates a whole new dimension of life. Simplify but enjoy it, goes by so quickly.
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mouses
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Re: Time for twins to go to daycare

Post by mouses » Thu Feb 22, 2018 6:14 pm

Why are you taking this out of savings instead of tightening up on the spending?

Snuffycuts99
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Re: Time for twins to go to daycare

Post by Snuffycuts99 » Thu Feb 22, 2018 6:17 pm

Grt2bOutdoors wrote:
Thu Feb 22, 2018 6:11 pm
Consider this: joint account- all money goes in, from that you each get X dollars to spend AFTER mortgage, home insurance, health care, food, clothes (necessities), daycare, baby needs, savings. You need to put priorities in order (not saying you are not), very difficult to keep track who is paying for what or if you have enough to cover monthly nut. Kids in picture as noted creates a whole new dimension of life. Simplify but enjoy it, goes by so quickly.
+1

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mouses
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Re: Time for twins to go to daycare

Post by mouses » Thu Feb 22, 2018 6:19 pm

There seems to be a lot of pressure in this thread for the OP and DW to merge their finances. I fail to see why that is necessary.

Also, this thread makes me think I ought to go into the daycare business, as those folks seem to be making a mint.

DarthSage
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Re: Time for twins to go to daycare

Post by DarthSage » Thu Feb 22, 2018 7:02 pm

I think you guys need to re-evaluate your whole financial picture. Whether or not you continue with separate finances is less important than making sure you are both continuing together towards your financial goals.

Spending issues and priorities definitely change once you have kids. I know others have said to cut down on the HSA, but I wouldn't. As the mother to 4, basically healthy kids, I can tell you--they are expensive, and health costs can come up out of the blue. For example, my oldest broke her arm jumping off a step. Same kid, different arm, broken while turning a cartwheel. Another kid broke his arm falling off a bunkbed ladder and needed surgery. There have been plenty of other random ER visits, minor surgeries, a PICU visit, and last week, the removal of a Plantar's wart. That's not even including glasses and braces (which may not fall under HSA guidelines). My point is, having funds available in an HSA may be a Godsend.

As others have mentioned, there are so, so many other costs associated with having children--you think it's pricey with diapers and daycare, just wait for music lessons, gymnastics, school field trips, scouting, art camp, and on and on. Your housing and vacation costs will go up. You'll look at vehicles differently. And then there's college!

My recommendation would be, decrease the Vanguard and misc. savings. Look at your budget, see what else needs to be cut back. Make a plan for future large expenditures. Work out something you and your partner can both live with.

BuckyBadger
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Re: Time for twins to go to daycare

Post by BuckyBadger » Thu Feb 22, 2018 7:18 pm

mouses wrote:
Thu Feb 22, 2018 6:14 pm
Why are you taking this out of savings instead of tightening up on the spending?
This.

I meant to mention this as well, but forgot to while typing up my (probably unwelcome) discourse.

Cut spending if you can before cutting savings.

haban01
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Re: Time for twins to go to daycare

Post by haban01 » Thu Feb 22, 2018 7:42 pm

veindoc wrote:
Thu Feb 22, 2018 2:44 pm
Congratulations on the twins!! Twice the fun.

This may sound harsh. You have had nine months and how many months of maternity leave to prepare for daycare expenses and you are asking a week out how to afford it? I know certain couples do this, split housing expenses and bills amongst themselves but I never really understood how that works. We have a joint account that we both contribute to pay for household expenses. I am the one however that pays all the bills from that account.

Are your salaries equal? Is that why you are splitting the twins? If you can’t find money in your budget to pay this, can your spouse swing the $1000. In general the higher earning spouse would take the bulk of the expenses in a manner proportional to the salaries.

But to answer your question based on the information offered it seems the only bucket to take this money out is the vanguard acct and unfortunately either the HSA or Roth. Could you afford this monthly nut without impacting savings? If no i would re-evaluate this arrangement you have with your wife. Where is her money going to?

As someone expecting baby two, I kinda find this offensive. Atleast he is reaching out for help! :!:

This reminds me of my unemployed neighbor telling me she was going to have to sell her retirement accounts to pay for her half of the mortgage unless she got another job and fast. Her husband was a high income earner btw but they kept finances separate.
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clown
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Re: Time for twins to go to daycare

Post by clown » Fri Feb 23, 2018 1:17 am

I advocate a different approach, though it admittedly may not fit your situation.

Are grandparents available?

When our first granddaughter was born, we made a deal with our daughter and her husband. We told them we would babysit full-time until the child went to school --- IF --- they would put the money into a college fund for the child. They decided how much the babysitting would cost and performed as they promised. Now it is 12 years later, and the fund is a respectable sum. Not enough to put the granddaughter through college -- but enough to make a real difference.

The bonus was that our daughter and husband have learned something too. They watched values to up, fall significantly in 2008 (since it's a 529 they could not remove the money), and rise nicely since the recession. They are also aware that they bought more shares at lower prices during the recession. A nice education for them. Knowing these things academically is one thing -- actually experiencing them is different.

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eye.surgeon
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Re: Time for twins to go to daycare

Post by eye.surgeon » Fri Feb 23, 2018 1:28 am

Maybe I'm old school but I would also suggest the days of splitting the check are over. You have a team now, time to play the game as a team.
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celia
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Re: Time for twins to go to daycare

Post by celia » Fri Feb 23, 2018 1:51 am

I'd say it's time for a family meeting after kids go to bed. For all you know (or don't), your wife may not have figured out how she'll pay her half either.

As a family you should decide how much you should continue to save as well as look at all the other budget categories. The amounts allotted for each category will be changing as time goes on and you both need to acknowledge that. After you agree on the big picture, you can then decide (again) who pays what.

If you don't yet have a budget, that's probably your first priority. You can't control expenses if you don't already know where the money goes.

An idea: Maybe one of you should change your payroll withholdings since you now have 2 more dependents.

mmmodem
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Re: Time for twins to go to daycare

Post by mmmodem » Fri Feb 23, 2018 2:08 am

Are you sure you didn’t miss-hear $1000 per month per child?

I’d continue to fund the HSA and home insurance. Stop saving to the taxable Vanguard, misc savings, and decrease your Roth IRA contribution $50 to come up with $500 a month. 5-6 months EF in your taxable Vanguard will have to suffice. Use your Roth IRA as a second tier EF.

Welcome to parenthood, you can no longer afford to fund a Misc savings account. When the rare expense occurs, reduce your Roth IRA for the month. In effect, this passively limits your spending by forcing you to login to your Roth IRA to reduce your contribution. The extra hassle makes you think about whether the rare expense is worth it or justified.

There are typically 3 tiers of daycare costs: newborn, toddler, and diaper trained. That’s roughly 0-1, 1-2, 2-5. Costs go down at each tier. So you might get your Misc Savings back in 9 months. And then you can decide with your spouse when to diaper train to save more.

pennywise
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Re: Time for twins to go to daycare

Post by pennywise » Fri Feb 23, 2018 7:58 am

Darth Xanadu wrote:
Thu Feb 22, 2018 4:25 pm
Cobra Commander wrote:
Thu Feb 22, 2018 3:20 pm
I would add a different perspective than Bloom's. If you wish to continue separate finances consider having a joint account into which you both contribute in some % (possible pro rata by income) from which you pay all of the major joint expenses (mortgage, daycare, groceries, etc.). IMO this approach is a little easier with kids and the random misc. expenses associated with having them.
I agree. Wife and I each get equal, fixed "discretionary" funds each paycheck into personal accounts. Balance goes to joint accounts. No arguments if/when one of us wants to splurge on something fun/wasteful.
Same here-we started our marriage using the same independent split-the-bills system as OP, then evolved into creating a joint account once we had kids and realized how much easier it would be to manage household expenses from a single pot. We each deposited a proportional percentage according to what we were earning at the time into what we call the house account; what was left went into our individual savings and checking accounts which we managed however we chose.

As time passed the house account became the source of 99.9% of our spending because neither of us really had an encompassing expense the other wouldn't or couldn't financially agree to support. Now after 30+ years of marriage we are depositing all our net pay into each month into the joint account because it makes life easier.

So long winded suggestion to consider creating a house/joint account, fund it and have one less administrative aggravation in running the Family Corporation :wink:

Leemiller
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Re: Time for twins to go to daycare

Post by Leemiller » Fri Feb 23, 2018 8:14 am

I would stop the long term emergency fund but keep the Roth, which can also be tapped in the event of a bad emergency. For HSAs, we have spent less than we’ve added each year, so that may be somewhere to cut.

My husband and I keep separate accounts, but he makes more and takes care of our bigger expenses, such as the mortgage. I buy all kids stuff, including nanny and clothing. The problem with the 50/50 approach is you do not need to be discussing with your wife why she should buy a cute pair of shoes for the twins. I’ve heard of women giving up and buying things out of their money for the kids - this doesn’t add to marital happiness. So generally, I agree combined is better. We just got married older, and frankly both make quite a bit of money.

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Re: Time for twins to go to daycare

Post by basspond » Fri Feb 23, 2018 8:38 am

In your situation, what happens if one spouse can't come up with the $500? Will you have to return the child?

wilked
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Re: Time for twins to go to daycare

Post by wilked » Fri Feb 23, 2018 9:29 am

miamivice wrote:
Thu Feb 22, 2018 3:46 pm
I misread the original post, so I'm deleting my response.

But to the OP: You say daycare for two infants costs $500 per month per kid, or $12,000 per year? Where in the world do you get daycare that cheap? In my area it runs around $20,000 per year per kid, or about $40,000 for twin infants. And our daycare is relatively cheap compared to many.
I was wondering this as well. I sort of think OP may have misinterpreted what the cost is - $1000 for both or $1000 each? If it's both, is it really full time care? That is something like $3/hr for each child.

BuckyBadger
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Re: Time for twins to go to daycare

Post by BuckyBadger » Fri Feb 23, 2018 9:41 am

wilked wrote:
Fri Feb 23, 2018 9:29 am
miamivice wrote:
Thu Feb 22, 2018 3:46 pm
I misread the original post, so I'm deleting my response.

But to the OP: You say daycare for two infants costs $500 per month per kid, or $12,000 per year? Where in the world do you get daycare that cheap? In my area it runs around $20,000 per year per kid, or about $40,000 for twin infants. And our daycare is relatively cheap compared to many.
I was wondering this as well. I sort of think OP may have misinterpreted what the cost is - $1000 for both or $1000 each? If it's both, is it really full time care? That is something like $3/hr for each child.
Come December I'll be paying $1500 a month for one baby, so I'm also amazed at the price. Even in low COL areas can daycare really be this cheap?

smitcat
Posts: 1525
Joined: Mon Nov 07, 2016 10:51 am

Re: Time for twins to go to daycare

Post by smitcat » Fri Feb 23, 2018 10:03 am

BuckyBadger wrote:
Fri Feb 23, 2018 9:41 am
wilked wrote:
Fri Feb 23, 2018 9:29 am
miamivice wrote:
Thu Feb 22, 2018 3:46 pm
I misread the original post, so I'm deleting my response.

But to the OP: You say daycare for two infants costs $500 per month per kid, or $12,000 per year? Where in the world do you get daycare that cheap? In my area it runs around $20,000 per year per kid, or about $40,000 for twin infants. And our daycare is relatively cheap compared to many.
I was wondering this as well. I sort of think OP may have misinterpreted what the cost is - $1000 for both or $1000 each? If it's both, is it really full time care? That is something like $3/hr for each child.
Come December I'll be paying $1500 a month for one baby, so I'm also amazed at the price. Even in low COL areas can daycare really be this cheap?
Agreed but maybe they only need 3 days a week, or maybe 4-5 hours a day, or maybe that is the cost after a company/military or community assistance. If it is full time and 5 days it costs much more that that for full time centers to committ the resources required.

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MikeWillRetire
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Re: Time for twins to go to daycare

Post by MikeWillRetire » Fri Feb 23, 2018 10:03 am

I was paying $20,000 per year for two kids twenty years ago!

getthatmarshmallow
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Re: Time for twins to go to daycare

Post by getthatmarshmallow » Fri Feb 23, 2018 10:15 am

Congratulations on the babies! And best wishes for the return to work for your wife; IME it's rewarding, but a very stressful transition.

Like many others here, I'm going to recommend at least combining expenses. Here's why. No doubt you two have a fair and equitable division now, but you're living like roommates, where the cable more or less cancels out the other utilities so you just each take a bill. But kids' expenses a) are a giant bite of most people's budgets and b) change rapidly. E.g., your wife pays for groceries now. But in two years you're going to have two toddlers who will adorably begin their project of eating you out of house and home. Will you expect her at that time to reduce her retirement contributions, or to feed the kids only peanut butter and bargain chicken nuggets, or to cancel one of 'her' bills to make up for it? (That's rhetorical.) You occasionally will do the shopping because she's running them to a doctor's appointment. She'll put gas in the car because you didn't have time because you were up all night with one of them.

I also think it's potentially unhealthy to think of one kid's expenses as 'yours' and the other kid's as 'hers.' Even as you've stated it, it doesn't make sense. You earn more. Why is daycare, a joint expense, then shared 50/50 instead of in proportion?

I think the mental accounting will likely drive you nuts in a few years. If you don't want to combine accounts and give yourself a budget of discretionary fun money you might, at a minimum, add up all your expenses, budget extra for random kid occurrences, and contribute that in proportion to your incomes into a joint account out of which the bills are paid each month. And if you don't want to do that, you at least need to have a talk about joint financial goals. So you don't have to figure out how to save $500 on your salary. You need, between the two of you, to come up with $1000 for day care while saving for retirement, goals, vacations, etc.

And with the information you've given, it's hard to say. What are your expenses?

sjt
Posts: 58
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Re: Time for twins to go to daycare

Post by sjt » Fri Feb 23, 2018 10:34 am

Darth Xanadu wrote:
Thu Feb 22, 2018 2:35 pm
Related, have you explored the option of Dependent Care FSA for the tax benefit?
As a father of twins who just turned 4, I know where you're coming from. Darth Xanadu makes a great point - explore a Dependent Care FSA for childcare through your employer. I believe mine is capped at $5000 annually but that saves us a good amount in taxes being in the 25% bracket. Every little bit helps when your kids are in daycare / using diapers, etc.

I also agree with others - are you able to cut from other areas? Tone down the entertainment budget - kids are entertaining enough and if you're not too exhausted after putting them to bed you can put something on TV and pass out soon thereafter. Vacations - can you cut back on vacations? Our kids just turned 4 and vacations have been low cost - driving and staying with family. We're just now thinking about air travel after 4 years. Mr Money Mustache has some good strategies to reduce monthly spend.

Congrats on the twins and it doesn't get easier, but it does get more fun!
"The one who covets is the poorer man, | For he would have that which he never can; | But he who doesn't have and doesn't crave | Is rich, though you may hold him but a knave." - Wife of Bath tale

LasixDrip
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Joined: Fri Dec 08, 2017 10:20 pm

Re: Time for twins to go to daycare

Post by LasixDrip » Fri Feb 23, 2018 9:13 pm

Twins- congratulations!
Things get too messy to keep things separate. There’s no way to keep things “even” or “fair” without combining them. It’s at risk to breed resentment or animosity. Kids are a great time to combine things and make sure both spouses are on the same financial planning page.
Others might know where to get the cash from better than I.

Hug401k
Posts: 264
Joined: Fri Mar 28, 2014 7:49 pm

Re: Time for twins to go to daycare

Post by Hug401k » Fri Feb 23, 2018 9:26 pm

I have to agree with what everyone is saying.. that is some inexpensive daycare. Also, separate expenses can create resentment once kids enter the picture. I've seen it happen. Those babies are going to need new wardrobes every 3-6 months for the next 2 years. Who is paying for that? Who's dropping $100 month in diapers? Who's buying baby's first shoes and gym classes. It gets really old really fast if it's supposed to be just one of you. I highly recommend a family account that you each contribute to that covers mortgage, insurance, utilities, kid expenses, groceries etc. If you make more, perhaps you can contribute more to that account. A % of salary?

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