How did your savings change after kids?

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learning30
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How did your savings change after kids?

Post by learning30 »

Hello, I'm 31 and my wife is 26. We're thinking of having a two kids in the next 5 years. How did your retirement savings change after you had kids? Did it fall of a cliff? Were you still able to save 25-30% of HHI? For context, my wife and I both work remote and make low six figures each. Currently we are maxing out 401k, roth iras, I'm doing an HSA, ESPP, and $12kish to taxable every year.

I would love to not take my foot off the gas with this but I just don't know with 2 kids.
EnjoyIt
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Re: How did your savings change after kids?

Post by EnjoyIt »

learning30 wrote: Sun Mar 31, 2024 4:31 pm Hello, I'm 31 and my wife is 26. We're thinking of having a two kids in the next 5 years. How did your retirement savings change after you had kids? Did it fall of a cliff? Were you still able to save 25-30% of HHI? For context, my wife and I both work remote and make low six figures each. Currently we are maxing out 401k, roth iras, I'm doing an HSA, ESPP, and $12kish to taxable every year.

I would love to not take my foot off the gas with this but I just don't know with 2 kids.
Kids are expensive if you want them to be. You can spend as much or as little as you want on them. Plenty of people get used clothes, get lowest cost groceries, have a family member keep an eye on your kids while you’re at work, send them to public school with minimal activities and don’t pay for college.

Or

You can hire a nanny or two, buy name brand clothes, buy only organic groceries, send them to private school, buy a new car for them, set them up with lots of expensive extracurricular activities and pay for their private college.

Or

Something in between. It’s all up to you.
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livesoft
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Re: How did your savings change after kids?

Post by livesoft »

Really not much change. We were saving the entire gross salary of the highest paid earner. The lowest paid earner paid all expenses including taxes.

Both of you making 6-figures? At home? That should make day care less of a problem. For a short while we shared a nanny with another couple who had a child the same age. Otherwise we paid for external daycare. As for items that the children needed, we got most of them free from friends and family who had kids about year older than our kids.

Perhaps the main problem is succumbing to societal and peer pressure that your children should get more stuff that they don't need. For instance, our kids have never been to a Disney theme park and they are your ages.
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Topic Author
learning30
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Re: How did your savings change after kids?

Post by learning30 »

livesoft wrote: Sun Mar 31, 2024 4:44 pm Really not much change. We were saving the entire gross salary of the highest paid earner. The lowest paid earner paid all expenses including taxes.

Both of you making 6-figures? At home? That should make day care less of a problem. For a short while we shared a nanny with another couple who had a child the same age. Otherwise we paid for external daycare. As for items that the children needed, we got most of them free from friends and family who had kids about year older than our kids.

Perhaps the main problem is succumbing to societal and peer pressure that your children should get more stuff that they don't need. For instance, our kids have never been to a Disney theme park and they are your ages.
I plan on doing most things cheap with the kids. Why would working at home make day care less of a problem - do you think it would be possible to watch the kids ourselves while we both work from home? Cost wise, every day care I've looked prematurely is around $1k/mo per kid
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learning30
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Re: How did your savings change after kids?

Post by learning30 »

EnjoyIt wrote: Sun Mar 31, 2024 4:38 pm
learning30 wrote: Sun Mar 31, 2024 4:31 pm Hello, I'm 31 and my wife is 26. We're thinking of having a two kids in the next 5 years. How did your retirement savings change after you had kids? Did it fall of a cliff? Were you still able to save 25-30% of HHI? For context, my wife and I both work remote and make low six figures each. Currently we are maxing out 401k, roth iras, I'm doing an HSA, ESPP, and $12kish to taxable every year.

I would love to not take my foot off the gas with this but I just don't know with 2 kids.
Kids are expensive if you want them to be. You can spend as much or as little as you want on them. Plenty of people get used clothes, get lowest cost groceries, have a family member keep an eye on your kids while you’re at work, send them to public school with minimal activities and don’t pay for college.

Or

You can hire a nanny or two, buy name brand clothes, buy only organic groceries, send them to private school, buy a new car for them, set them up with lots of expensive extracurricular activities and pay for their private college.

Or

Something in between. It’s all up to you.
My kids will never set foot in a private school, that's the plan
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CyclingDuo
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Re: How did your savings change after kids?

Post by CyclingDuo »

learning30 wrote: Sun Mar 31, 2024 4:31 pm Hello, I'm 31 and my wife is 26. We're thinking of having a two kids in the next 5 years. How did your retirement savings change after you had kids? Did it fall of a cliff? Were you still able to save 25-30% of HHI? For context, my wife and I both work remote and make low six figures each. Currently we are maxing out 401k, roth iras, I'm doing an HSA, ESPP, and $12kish to taxable every year.

I would love to not take my foot off the gas with this but I just don't know with 2 kids.
Good article from Michael Kitces that includes the discussion of moving from DINKs to DEWKs and how it could impact retirement savings...

"But for many retirement accumulators, the biggest disruption to saving a percentage of income is the remarkably common decision to start a family and have children."

https://www.kitces.com/blog/empty-nest- ... etirement/

Sounds like you have a great dual income household, and are doing a fantastic job at front loading your retirement accounts. Congrats!

I can only speak about our experience when we decided to have kids (we were both in our 30's when we had kids). We had a big focus on saving for college educations after our kids were born, but didn't have the income level you have to be able to max out all retirement plans + front load college education funds at the same time. Not to mention, there were no Roth IRAs or HSAs back at that time for anyone to utilize. So we made choices that moved us from what we were doing via the starve and stack method for our retirement accounts and taxable accounts by living on one salary and saving the other one, to pulling back on our retirement saving which for us hovered in the 15-20% range. The rest went to college education funds as well as the obvious increased costs of parenting expenses. That also included a few years of only a single income while my wife was a SAHM with the young kids, and she slowly transitioned back to part-time and eventually full-time. We knew this all meant we would be working into our 60's, but were okay with that.

Long story short, this meant the empty nest red zone - as Kitces calls it - became a crucial additional starve and stack phase to play any catch up in retirement savings to fill the gap that was needed following the child rearing and college tuition years were completed. For us, that empty nest red zone phase was a seven year stretch that we completed last year.

CyclingDuo
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joechristmas
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Re: How did your savings change after kids?

Post by joechristmas »

We found that our spending changed as our family grew. When it was just one child there was very little change. All sedans can comfortably fit 2 car seats for example and a 3-bedroom house is fine for a family of 4.
But as our family grew (we are now 6), we started to need things like a minivan, a new house, started spending $50k per annum on childcare, etc. so some of our savings/investing has declined as a percentage of income. We see this as a season of life though. A very long, very expensive, seasoning.
runner3081
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Re: How did your savings change after kids?

Post by runner3081 »

Not a bit, you can still be very frugal with kids.
grsharky
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Re: How did your savings change after kids?

Post by grsharky »

I think we actually saved more after we had kids than we did when we were DINKS. We were pretty care free when it was just us, and we saved and invested but not to the level we should've been I suppose. Once kids came we became more focused financially and we still put around 18-20% of our pretax income into tax sheltered savings, plus some into 529's, and then some more into traditional savings. As was said above, having kids is expensive as you want to make it. If you want to buy top of the line everything they will be expensive. Whatever you get for kid number 1, keep that stuff for kid number 2. We had our son in 2016 and our daughter in 2021 and she wears a lot of his stuff that we kept, she uses his old high chair and cars seat, etc.

I will say daycare can be expensive depending on where you live, fortunately for us we live in an area where it's pretty affordable and that allowed us to keep our son in preschool until he turned 6 and then sent him to kindergarten. He has an August birthday and we figured it's better for him to be one of the oldest instead of the youngest. A good friend of mine from college has a son who's one day younger and they had to send him to kindergarten at 5 because childcare in their area is crazy expensive and they just couldn't pay for two kids for another year.
Normchad
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Re: How did your savings change after kids?

Post by Normchad »

I didn’t find kids to be all that expensive.

We did spend money though. Started having kids at thirty. As they aged, our careers progressed and earnings grew. So we actually saved more and more as the years went on.

Probably not generally useful information though. Our earnings growth at the time the family was growing is just a coincidence.
NotWhoYouThink
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Re: How did your savings change after kids?

Post by NotWhoYouThink »

Our income increased so much about that time that both our saving and spending increased. Increasing income does wonders for savings.
fulltilt
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Re: How did your savings change after kids?

Post by fulltilt »

learning30 wrote: Sun Mar 31, 2024 4:31 pm Hello, I'm 31 and my wife is 26. We're thinking of having a two kids in the next 5 years. How did your retirement savings change after you had kids? Did it fall of a cliff? Were you still able to save 25-30% of HHI? For context, my wife and I both work remote and make low six figures each. Currently we are maxing out 401k, roth iras, I'm doing an HSA, ESPP, and $12kish to taxable every year.

I would love to not take my foot off the gas with this but I just don't know with 2 kids.
Childcare was far and away the biggest expense and challenge. $1k a month per kid sounds about right but there is a range.

Kids will eat up PTO like mad when they are younger. They are sick constantly.

You don’t need to buy a ton of stuff, but there is a certain amount of baby paraphernalia that makes life more tolerable.

When they are babies, I would guesstimate we paid $16k per kid per year all in. We didn’t do fancy trips or fancy schools.
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Gradient Descent
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Re: How did your savings change after kids?

Post by Gradient Descent »

learning30 wrote: Sun Mar 31, 2024 5:01 pm
livesoft wrote: Sun Mar 31, 2024 4:44 pm Really not much change. We were saving the entire gross salary of the highest paid earner. The lowest paid earner paid all expenses including taxes.

Both of you making 6-figures? At home? That should make day care less of a problem. For a short while we shared a nanny with another couple who had a child the same age. Otherwise we paid for external daycare. As for items that the children needed, we got most of them free from friends and family who had kids about year older than our kids.

Perhaps the main problem is succumbing to societal and peer pressure that your children should get more stuff that they don't need. For instance, our kids have never been to a Disney theme park and they are your ages.
I plan on doing most things cheap with the kids. Why would working at home make day care less of a problem - do you think it would be possible to watch the kids ourselves while we both work from home? Cost wise, every day care I've looked prematurely is around $1k/mo per kid
You cannot watch infants/toddlers and work. They require 100% attention for the first year or two, and still high percentages thereafter.

You must live in a LCOL area. $2k/mo is more realistic for HCOL for younger kids.

Don’t worry if you can’t max out 401k while raising young kids.
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learning30
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Re: How did your savings change after kids?

Post by learning30 »

Gradient Descent wrote: Sun Mar 31, 2024 8:29 pm
learning30 wrote: Sun Mar 31, 2024 5:01 pm
livesoft wrote: Sun Mar 31, 2024 4:44 pm Really not much change. We were saving the entire gross salary of the highest paid earner. The lowest paid earner paid all expenses including taxes.

Both of you making 6-figures? At home? That should make day care less of a problem. For a short while we shared a nanny with another couple who had a child the same age. Otherwise we paid for external daycare. As for items that the children needed, we got most of them free from friends and family who had kids about year older than our kids.

Perhaps the main problem is succumbing to societal and peer pressure that your children should get more stuff that they don't need. For instance, our kids have never been to a Disney theme park and they are your ages.
I plan on doing most things cheap with the kids. Why would working at home make day care less of a problem - do you think it would be possible to watch the kids ourselves while we both work from home? Cost wise, every day care I've looked prematurely is around $1k/mo per kid
You cannot watch infants/toddlers and work. They require 100% attention for the first year or two, and still high percentages thereafter.

You must live in a LCOL area. $2k/mo is more realistic for HCOL for younger kids.

Don’t worry if you can’t max out 401k while raising young kids.
I live in a very high cost of living area in SoCal. You're saying it can be $2k per kid?
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learning30
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Re: How did your savings change after kids?

Post by learning30 »

fulltilt wrote: Sun Mar 31, 2024 8:22 pm
learning30 wrote: Sun Mar 31, 2024 4:31 pm Hello, I'm 31 and my wife is 26. We're thinking of having a two kids in the next 5 years. How did your retirement savings change after you had kids? Did it fall of a cliff? Were you still able to save 25-30% of HHI? For context, my wife and I both work remote and make low six figures each. Currently we are maxing out 401k, roth iras, I'm doing an HSA, ESPP, and $12kish to taxable every year.

I would love to not take my foot off the gas with this but I just don't know with 2 kids.
Childcare was far and away the biggest expense and challenge. $1k a month per kid sounds about right but there is a range.

Kids will eat up PTO like mad when they are younger. They are sick constantly.

You don’t need to buy a ton of stuff, but there is a certain amount of baby paraphernalia that makes life more tolerable.

When they are babies, I would guesstimate we paid $16k per kid per year all in. We didn’t do fancy trips or fancy schools.
So $12k in daycare then the other $4k covered everything else throughout the year?
vinhodoporto
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Re: How did your savings change after kids?

Post by vinhodoporto »

learning30 wrote: Sun Mar 31, 2024 8:54 pm I live in a very high cost of living area in SoCal. You're saying it can be $2k per kid?
Yes, for very young kids. But keep in mind:
1. There are cheaper options out there like in home daycares. Even an Au Pair is cheaper for two kids if you have the space. Lots of people manage to make it work on a lot less than you make.

2. It’s only for a few years at most. Once they’re in preschool at 2 or 3 the cost is usually less, even with the extended day option or before/ after care. Once they’re in Kindergarten since you both WFH you might be able to get away with little or no daycare if you can structure your work hours so one parent can watch the kid(s) before school and the other after.

Our spending actually went down when we had our first kid. We spent more on some things but spent a lot less on going out, travel, entertainment. Our savings did take a hit because my spouse went 1/2 time and remote, but not as much as you might think because our taxes went down along with a bunch of work related commuting, lunch, wardrobe type expenses.
happy_statistician
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Re: How did your savings change after kids?

Post by happy_statistician »

I live in the Bay Area and infant day care is 2.5-3k/month. So it's all relative on cost of living, I suppose!

One thing I noticed about myself is that I'm way more willing to skimp on things for myself than for my kids. Not saying that's rational but it's true for me.

PS there is no way to wfh and watch your (infant-preschool aged) children, and still do a passable job, unless your job is insanely chill/low engagement.
BorqaZ
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Re: How did your savings change after kids?

Post by BorqaZ »

OP,

Since you have the income, you are likely to spend to make your life easier. Unless you live in a major city, you are likely to buy a 3k sqr ft house in the suburbs, as opposed to living in a condo. You are likely to buy a bigger car than a civic or corolla. Your career is likely to progress at a slower pace because you would rather spend time with your kids than doing the extra at work that often lead to promotion. etc.

But, what is money for if not to make life more enjoyable while you are alive?
Last edited by BorqaZ on Mon Apr 01, 2024 7:18 am, edited 1 time in total.
trumpet83
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Re: How did your savings change after kids?

Post by trumpet83 »

For our first, I wouldn't say that much changed because we had my mom watching. Groceries went up and baby supplies, but that stuff didn't put a large dent in anything. No retirement/savings contributions dropped.

Seems like the main ways it can really get expensive are daycare and/or feeling like you need to upgrade your housing situation.

We recently had twin boys and I can see the writing on the wall that we will need to be decreasing 401k/403b contributions to accommodate daycare cost. Roth IRA contributions should continue on as usual, but the other accounts will be where we look to increase cash flow. We also expect for us both to receive raises at work and instead of saving large percentages we will use them to increase margin for child expenses.

When you save a lot of money you always tell yourself that you can access all this cash flow if you just decrease your contributions...It's just mentally difficult to make that switch.
Ccthealias
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Re: How did your savings change after kids?

Post by Ccthealias »

My kids are 7 and 9. The biggest expense was childcare but we had utilized my mom in the early years so didn’t spend too much on childcare until 3. Things like clothes, food are pretty minimal and at young age I don’t spend too much on expensive clothes and they didn’t care that clothes were from Walmart or hand me down.
Travel is where it really cost a lot more- 4 plane tickets vs 2 and having to go at peak season. Also I m a lot more picky when traveling with kids, nicer hotel, only nonstop flights so it’s just more expensive overall. We used to do a lot of international travel prekids but when they were younger we just did more driving trip which was much cheaper anyways because it was easier and due to Covid.

In talking to people who have older kids, they tell us that the expenses really come when they are older when they want to buy nice clothes or do more expensive activity. I m starting to see this with my 9 years old who wants to try different activities. Also when going out I would spent on stuff that I would never spend the money on myself since I m pretty frugal (for example $8 bubble tea)

For us, we front-loaded the 529 and continue maxing out our retirement. When we wee DINks, we didn’t have any deductions so I started 529 before kids were born. Once they were born, I also put investments in custodian account for tax optimization and to earmark for some expenses as kids get older like international school trips or car.
BorqaZ
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Re: How did your savings change after kids?

Post by BorqaZ »

People saying expenses didn't go up because they used parents for daycare is akin to saying expenses didn't go up because I was gifted $18k after tax money per year to offset any increase in expenses.

Also, if you didn't change a house after you have (or in anticipation of having) a kid, you were living large.

Expenses do go up.
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simplesimon
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Re: How did your savings change after kids?

Post by simplesimon »

learning30 wrote: Sun Mar 31, 2024 4:31 pm Hello, I'm 31 and my wife is 26. We're thinking of having a two kids in the next 5 years. How did your retirement savings change after you had kids? Did it fall of a cliff? Were you still able to save 25-30% of HHI? For context, my wife and I both work remote and make low six figures each. Currently we are maxing out 401k, roth iras, I'm doing an HSA, ESPP, and $12kish to taxable every year.

I would love to not take my foot off the gas with this but I just don't know with 2 kids.
Kids cost some money, so mathematically it must affect savings unless you're spending less on them per year than the child tax credit.

Give yourself some grace to reduce savings during the early kid years...you're going to be paying for care one way or another either through daycare or reduced work hours unless you can get free help.
JSPECO9
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Re: How did your savings change after kids?

Post by JSPECO9 »

Kids are expensive, especially child care, no question. Expect savings to fall, which is absolutely OK, because the point of money is to spend it on things that matter to you, in this case having children. Financially, you will absolutely be fine.

Father of two. Worth every penny. There are more important things in life than money and wealth. No amount of money could bring me the joy that my kids bring me. Pre-family, I had savings rate of 30-40%, now I'm married with two children, savings rate is at about 20%. Even if I could only save 5-10%, I would still do it all over again. But I wouldn't have kids if I was underwater, it'd feel irresponsible to do so. But if you can afford it (which you definitely can) and you have the true desire, it's so worth it.

I'm not interested in growing old with a load of wealth but didn't get to enjoy the true pleasures of life. Remember, the point of money is to spend it on things that matter to you, and there is nothing that will bring you happiness like children do (if that's something you truly want).
livesoft
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Re: How did your savings change after kids?

Post by livesoft »

learning30 wrote: Sun Mar 31, 2024 5:02 pmMy kids will never set foot in a private school, that's the plan
I saw this and had to laugh. Our oldest went to a private kindergarten. That's because public schools had only half-day kindergarten, so that would have entailed paying for daycare for the other half of the day. Private kindergarten was full day. So at that time, it was a better value to pay for private kindergarten than to pay for daycare. First grade and on our oldest attended public schools until going to college.

Another thing is that our kids are more than 4 years apart, but not because of any particular planning. That meant that there was little doubling up of daycare and college expenses.

And we didn't query random people on the Internet about our savings and family choices. LOL!
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Nowizard
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Re: How did your savings change after kids?

Post by Nowizard »

Primarily with recognition of the expense and availability of additional funds to invest. The investment has paid off. Though heavy at the time, they are stable and make absolutely no financial demands on us. In fact are ahead of where we were at the same ages.

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MillennialFinance19
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Re: How did your savings change after kids?

Post by MillennialFinance19 »

I think the biggest dip for us was during the childcare phase. Now that they're ~5 and 7, and only in before/after school care ($500 per month) we're exceeding pre-kid savings levels. This has also been the result of some good raises over the past 4-5 years.

I second what a lot of other posters said - try to take as much second hand clothes as you can, watch out for the "elite" travel sports teams at age 4 which are pretty much a racket, and budget as best you can.
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bogletiger
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Re: How did your savings change after kids?

Post by bogletiger »

My kids are currently ages 5 and 3. I agree with the posters above about the first kid not really impacting our savings a ton. We had a much lower income when the first was born so were not maxing out retirement accounts except two Roth IRAs. We live in a LCOL so daycare is $180 per week and is located at my place of employment, which is a HUGE advantage! The baby shower covered most big items (crib, stroller, car seat, some diapers, etc). Breastfeeding also saved a ton of money, but definitely NOT time. A big box of diapers is like $50 and lasts probably 2ish weeks. Formula is also like $50 per can and lasts about a week. We still went to restaurants and such because that one kid life was easy in retrospect. Life truly changed with the second kid (from a daily routine/hobby standpoint), first kid was a harder overall adjustment. You absolutely cannot work and watch a kid, unless you neglect one of the two or have a TV/ipad as the babysitter. My kids are 100% worth it and I wouldn’t change anything, even if it means that I won’t retire super early or won’t vacation a ton until they’re older
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SmileyFace
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Re: How did your savings change after kids?

Post by SmileyFace »

I can say with certainty that we did NOT have day care expenses when we had children.
BUT, the reason we didn't is because we made the decision to have a Stay-At-Home parent. So we dropped one income - less to save pre-tax since we lost access to a 401K :)
It was a decision driven by various reasons - few of which were related to finances.
No one has kids to HELP their finances. (at least not rational hard-working folks)
Having kids is a life decision - your finances will change and your savings rate will likely decrease (depending upon other life decision you may be able to change). But it will be worth it.
BackToSchoolDad
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Re: How did your savings change after kids?

Post by BackToSchoolDad »

As others have said, kids don't have to be expensive. Daycare is likely to be the biggest expense when they're young, but toys, clothes, whatever, can be gotten quite cheap and there's a ton of secondhand stuff that's basically new.

As they get older, incidental costs increase because you start doing more stuff with them, can go on better trips. But even in our small town there are tons of free or cheap activities to get into all the time.

Another big consideration is tax credits, they can definitely offset some of the costs, although your income may be too high. Thanks to our kiddos we have a negative tax rate.
Wanderingwheelz
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Re: How did your savings change after kids?

Post by Wanderingwheelz »

I misread the tile as “How did your savings change your kids.” I was all ready to dive right in.
Being wrong compounds forever.
FlowWithTheGo
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Re: How did your savings change after kids?

Post by FlowWithTheGo »

Wife became sahm, but income and savings percentage grew. Maybe kids give you more ambition, maybe just lucky timing. You are on this forum, you will be all right. Have lots of em.
Last edited by FlowWithTheGo on Mon Apr 01, 2024 12:11 pm, edited 1 time in total.
cshell2
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Re: How did your savings change after kids?

Post by cshell2 »

The early years childcare can be the killer. Then you enter the age where it's kind of a honeymoon period, they are in school and don't need round the clock care and activities are often inexpensive. It's easy to get complacent, then high school hits you like a ton of bricks! Expensive extracurriculars, class trips, drivers training, insurance on a teen, maybe another car, and then comes college...

I've been writing checks for my rising 9th grader practically every week it seems! Marching band trip $800, Summer camp $400, Scout trip $2000. I get all of this stuff is optional, but you might surprise yourself. I never thought I'd be sending my kids to private school either, but I did, and was very happy with the decision as well.
Johnnyappleseed
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Re: How did your savings change after kids?

Post by Johnnyappleseed »

I was a beyond poor E-3 in the military when I had my first child. Everyone is obviously right that the childcare is the one near mandatory expense. Everything else is up to choice and lifestyle. How much you save or extra you spend will depend upon your current and future lifestyle and none of us know that. On the practical side your savings will probably decrease, but you if can hold expenses steady during those early years and let yearly salary raises build back your savings rate everything will work out.

on a life advice side... it's great to plan ahead, but do not wait to have children until you are set financially. Something will ALWAYS come up in life and it will seem like if you just wait a little bit longer the time will be perfect... that's just not the way life works. You have the income to make it work and want to have children so do it.
zag00
Posts: 456
Joined: Wed Oct 29, 2014 3:15 pm

Re: How did your savings change after kids?

Post by zag00 »

3 kids under 5 checking in. Savings didn't decrease significantly yet - a little less going to the brokerage but the 401k and rIRA's are still getting maxed.
It's only as expensive as you make it.
invest4
Posts: 1931
Joined: Wed Apr 24, 2019 2:19 am

Re: How did your savings change after kids?

Post by invest4 »

As mentioned by others, it is completely up to you.

We have a family of 6 and our choices may not be yours:

* Spouse is SAHM from birth of the first

* Low cost with small children. Used clothes, etc.

* Costs increase as they grow…activities for example

* Costs continue to increase as we paid for used cars, insurance and the like. Activities continue.

* Kids get part time jobs and slowly take on financial responsibilities as they age…phone, car insurance, simple car maintenance, etc.

* We paid for college education…community college and then state university…all while living at home.

* First child graduated, working and transitioning to fully self sufficient. Others still in progress.

* We also ate better food and had more expensive family vacations over time. We also built and paid for a bigger house.

We always lived beneath our means and constantly saved. However, we also intentionally made choices to spend more on some things and less on others with full awareness and acceptance of the trade-offs…like working longer.

Best wishes.
gavinsiu
Posts: 4641
Joined: Sun Nov 14, 2021 11:42 am

Re: How did your savings change after kids?

Post by gavinsiu »

The usual change are childcare expenses
  • If you don't have grand parent willing be do childcare, you will need to pay for child care, which can get quite expensive. The day care funding eventually becomes college savings.
  • Food expense will increase, because you are feeding more people.
  • Vacation cost will increase, because again you need to buy plane tickets for more people. However, you can offset that by changing the type of vacation. If you do road trips, the cost will be reduced to more food.
  • School programs and events can cost money. This will depend on how willing you are to pay for them. I have gotten my kids ice skating lessons, swimming lesson, etc. My parents would have said no, since they don't have the cash.
  • The same applies for stuff like Video Game system and such. I did buy my kids a switch, but you don't have to. I grew up without video games.
  • You can pay for private school, which can be as expensive as college. I end up moving to some place with a good school district and go to public school.
  • You could have unexpected expense. Your kids could end up having a medical condition and require additional help. One of my kids needed extra help.
  • You may have to pay for things like braces.
  • You may have additional insurance expense when your kids learn to drive. My kids are not at that stage, but I didn't learn to drive until my 20's. My younger sister got her license when she was still at home and cause the insurance rate to hike. You get to control whether they get cars or not.
  • I have notice additional cost due to increase price or safety or style inflation. For example, in the old days there weren't car seats. I notice some parents have super expensive carriages as well. You could choose to keep it cheap. You do not need to buy that $600 carriage.
In our case, the saving did not drop but did result in a lifestyle downgrade as fun things get reallocated to child expenses. Saving then increase to save for college and increase in Emergency funds.
wander
Posts: 4439
Joined: Sat Oct 04, 2008 9:10 am

Re: How did your savings change after kids?

Post by wander »

How did our savings change after kids? Nothing.
fulltilt
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Joined: Thu Dec 01, 2011 1:23 pm

Re: How did your savings change after kids?

Post by fulltilt »

learning30 wrote: Sun Mar 31, 2024 8:57 pm
fulltilt wrote: Sun Mar 31, 2024 8:22 pm
learning30 wrote: Sun Mar 31, 2024 4:31 pm Hello, I'm 31 and my wife is 26. We're thinking of having a two kids in the next 5 years. How did your retirement savings change after you had kids? Did it fall of a cliff? Were you still able to save 25-30% of HHI? For context, my wife and I both work remote and make low six figures each. Currently we are maxing out 401k, roth iras, I'm doing an HSA, ESPP, and $12kish to taxable every year.

I would love to not take my foot off the gas with this but I just don't know with 2 kids.
Childcare was far and away the biggest expense and challenge. $1k a month per kid sounds about right but there is a range.

Kids will eat up PTO like mad when they are younger. They are sick constantly.

You don’t need to buy a ton of stuff, but there is a certain amount of baby paraphernalia that makes life more tolerable.

When they are babies, I would guesstimate we paid $16k per kid per year all in. We didn’t do fancy trips or fancy schools.
So $12k in daycare then the other $4k covered everything else throughout the year?
Correct. Start-up costs for us: crib, carseat x2 (one for each car), stroller, breast pump were the big ones. Doctor's appointments, baby food, diapers and all that stuff add up.

That is just a ballpark estimate. I have no idea what we actually spent. We didn't buy new clothes for the most part and didn't go over the top with toys and stuff.
Walk a single path, becoming neither cocky with victory nor broken with defeat, without forgetting caution when all is quiet or becoming frightened when danger threatens. -- Jigoro Kano
fasteddie911
Posts: 466
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Re: How did your savings change after kids?

Post by fasteddie911 »

Kids don't have to be expensive. Depends on your wants and needs. Some of the big expenses are daycare, preschool, 529 or a larger home. We did 3 of those so our savings were affected.
pejp1
Posts: 23
Joined: Tue Mar 26, 2024 1:55 pm

Re: How did your savings change after kids?

Post by pejp1 »

learning30 wrote: Sun Mar 31, 2024 4:31 pm Hello, I'm 31 and my wife is 26. We're thinking of having a two kids in the next 5 years. How did your retirement savings change after you had kids? Did it fall of a cliff? Were you still able to save 25-30% of HHI? For context, my wife and I both work remote and make low six figures each. Currently we are maxing out 401k, roth iras, I'm doing an HSA, ESPP, and $12kish to taxable every year.

I would love to not take my foot off the gas with this but I just don't know with 2 kids.
Having kids is absolutely life changing and amazing. I can understand the idea of not having kids because you're living paycheck to paycheck, but the idea of being concerned that it'll slow down your saving rate is not something I think you should consider.

We have 4 year old twins. My wife became SAHM as the cost of childcare was crazy and she wasn't in love with her job anyway. There are lots of costs, yes you can buy used stuff, but you'll need childcare, they'll do activities, summer camps etc...in all likelihood you won't be maxing out all your savings. However, literally none of that matters relative to the life changing positive impact of having children. You only get one life.
Oddball
Posts: 371
Joined: Thu May 03, 2018 9:35 am

Re: How did your savings change after kids?

Post by Oddball »

As a father of a 5 and 3 year old, I can echo most of the statements already posted. So instead I will just add this saying that has stuck with me "Children are a 20 year investment for the last 40 years of your life".
alfaspider
Posts: 4883
Joined: Wed Sep 09, 2015 4:44 pm

Re: How did your savings change after kids?

Post by alfaspider »

EnjoyIt wrote: Sun Mar 31, 2024 4:38 pm
learning30 wrote: Sun Mar 31, 2024 4:31 pm Hello, I'm 31 and my wife is 26. We're thinking of having a two kids in the next 5 years. How did your retirement savings change after you had kids? Did it fall of a cliff? Were you still able to save 25-30% of HHI? For context, my wife and I both work remote and make low six figures each. Currently we are maxing out 401k, roth iras, I'm doing an HSA, ESPP, and $12kish to taxable every year.

I would love to not take my foot off the gas with this but I just don't know with 2 kids.
Kids are expensive if you want them to be. You can spend as much or as little as you want on them. Plenty of people get used clothes, get lowest cost groceries, have a family member keep an eye on your kids while you’re at work, send them to public school with minimal activities and don’t pay for college.

Or

You can hire a nanny or two, buy name brand clothes, buy only organic groceries, send them to private school, buy a new car for them, set them up with lots of expensive extracurricular activities and pay for their private college.

Or

Something in between. It’s all up to you.
There are three BIG expenses that are close to mandatory with kids. I don't agree (at least with DINKs) that it's realistic to skimp.

Childcare: Unless you have a selfless family member willing to do it for free, you are paying for childcare for 5 years and there are no safe/cheap options that will allow you to both continue working full time. One spouse quitting the workforce or scaling back their career is an even bigger financial hit if both are career professionals to start. As a parent of (recently) school age kids, I don't know a single one of my peers who has avoided paying a substantial amount of money for childcare.

Housing: Another huge cost of kids is housing if you don't already live in a house with the space you would want with kids. We'd still happily be in our 1600sq ft house if it were just the two of us. Granted, nothing mandates more space with kids, but very few people would be comfortable in a 1bd apartment with 4 kids.

College: Yes, you can refuse to pay for college, but parents who can afford to pay for college but refuse put their kids in a tough spot with financial aid. Very few parents of means are going to be that stingy.
 
Stuff like clothes and groceries are a rounding error compared to the big 3 daycare/housing/college. I also think the cultural environment has shifted a lot over the last 50 years that have made it much more difficult to do the "cheap kid" thing coming from a professional class. Single wage earner households are more rare, college is now far more expensive, and housing is also relatively more expensive compared to physical goods like clothes.
alfaspider
Posts: 4883
Joined: Wed Sep 09, 2015 4:44 pm

Re: How did your savings change after kids?

Post by alfaspider »

learning30 wrote: Sun Mar 31, 2024 4:31 pm Hello, I'm 31 and my wife is 26. We're thinking of having a two kids in the next 5 years. How did your retirement savings change after you had kids? Did it fall of a cliff? Were you still able to save 25-30% of HHI? For context, my wife and I both work remote and make low six figures each. Currently we are maxing out 401k, roth iras, I'm doing an HSA, ESPP, and $12kish to taxable every year.

I would love to not take my foot off the gas with this but I just don't know with 2 kids.
We were in your shoes 10 years ago (now have kids 5 and 7). One thing that helped us quite a bit was simply the fact that our careers continued an upward trajectory post-kids. While our savings rate as a percentage of our income went down slightly, the absolute dollar amount of our savings has increased post kids because we make more money. Most professionals in their late 20s/early 30s still have a lot of upward salary growth ahead of them, which fortunately dovetails with kid expenses.

That said, kids have a strong tendency to promote lifestyle creep. While we've saved very well considering, kids have pushed our FI date out by at least 10 years. We'd probably already be FI without kids.
EnjoyIt
Posts: 8362
Joined: Sun Dec 29, 2013 7:06 pm

Re: How did your savings change after kids?

Post by EnjoyIt »

alfaspider wrote: Tue Apr 02, 2024 2:00 pm
EnjoyIt wrote: Sun Mar 31, 2024 4:38 pm
learning30 wrote: Sun Mar 31, 2024 4:31 pm Hello, I'm 31 and my wife is 26. We're thinking of having a two kids in the next 5 years. How did your retirement savings change after you had kids? Did it fall of a cliff? Were you still able to save 25-30% of HHI? For context, my wife and I both work remote and make low six figures each. Currently we are maxing out 401k, roth iras, I'm doing an HSA, ESPP, and $12kish to taxable every year.

I would love to not take my foot off the gas with this but I just don't know with 2 kids.
Kids are expensive if you want them to be. You can spend as much or as little as you want on them. Plenty of people get used clothes, get lowest cost groceries, have a family member keep an eye on your kids while you’re at work, send them to public school with minimal activities and don’t pay for college.

Or

You can hire a nanny or two, buy name brand clothes, buy only organic groceries, send them to private school, buy a new car for them, set them up with lots of expensive extracurricular activities and pay for their private college.

Or

Something in between. It’s all up to you.
There are three BIG expenses that are close to mandatory with kids. I don't agree (at least with DINKs) that it's realistic to skimp.

Childcare: Unless you have a selfless family member willing to do it for free, you are paying for childcare for 5 years and there are no safe/cheap options that will allow you to both continue working full time. One spouse quitting the workforce or scaling back their career is an even bigger financial hit if both are career professionals to start. As a parent of (recently) school age kids, I don't know a single one of my peers who has avoided paying a substantial amount of money for childcare.

Housing: Another huge cost of kids is housing if you don't already live in a house with the space you would want with kids. We'd still happily be in our 1600sq ft house if it were just the two of us. Granted, nothing mandates more space with kids, but very few people would be comfortable in a 1bd apartment with 4 kids.

College: Yes, you can refuse to pay for college, but parents who can afford to pay for college but refuse put their kids in a tough spot with financial aid. Very few parents of means are going to be that stingy.
 
Stuff like clothes and groceries are a rounding error compared to the big 3 daycare/housing/college. I also think the cultural environment has shifted a lot over the last 50 years that have made it much more difficult to do the "cheap kid" thing coming from a professional class. Single wage earner households are more rare, college is now far more expensive, and housing is also relatively more expensive compared to physical goods like clothes.
I'm not a dink and in my opinion those items are things I have/would/do spend on our kids because I could. But, none of them are mandatory. For example I started my young life living in a 1 bedroom apartment with my parents living in the projects. It wasn't until later in life where they earned enough money to upgrade. My child care was my grandparents. My parents could not afford paying for college but they did help with some expenses. I am now a physician.
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alfaspider
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Re: How did your savings change after kids?

Post by alfaspider »

EnjoyIt wrote: Tue Apr 02, 2024 3:37 pm
alfaspider wrote: Tue Apr 02, 2024 2:00 pm
EnjoyIt wrote: Sun Mar 31, 2024 4:38 pm
learning30 wrote: Sun Mar 31, 2024 4:31 pm Hello, I'm 31 and my wife is 26. We're thinking of having a two kids in the next 5 years. How did your retirement savings change after you had kids? Did it fall of a cliff? Were you still able to save 25-30% of HHI? For context, my wife and I both work remote and make low six figures each. Currently we are maxing out 401k, roth iras, I'm doing an HSA, ESPP, and $12kish to taxable every year.

I would love to not take my foot off the gas with this but I just don't know with 2 kids.
Kids are expensive if you want them to be. You can spend as much or as little as you want on them. Plenty of people get used clothes, get lowest cost groceries, have a family member keep an eye on your kids while you’re at work, send them to public school with minimal activities and don’t pay for college.

Or

You can hire a nanny or two, buy name brand clothes, buy only organic groceries, send them to private school, buy a new car for them, set them up with lots of expensive extracurricular activities and pay for their private college.

Or

Something in between. It’s all up to you.
There are three BIG expenses that are close to mandatory with kids. I don't agree (at least with DINKs) that it's realistic to skimp.

Childcare: Unless you have a selfless family member willing to do it for free, you are paying for childcare for 5 years and there are no safe/cheap options that will allow you to both continue working full time. One spouse quitting the workforce or scaling back their career is an even bigger financial hit if both are career professionals to start. As a parent of (recently) school age kids, I don't know a single one of my peers who has avoided paying a substantial amount of money for childcare.

Housing: Another huge cost of kids is housing if you don't already live in a house with the space you would want with kids. We'd still happily be in our 1600sq ft house if it were just the two of us. Granted, nothing mandates more space with kids, but very few people would be comfortable in a 1bd apartment with 4 kids.

College: Yes, you can refuse to pay for college, but parents who can afford to pay for college but refuse put their kids in a tough spot with financial aid. Very few parents of means are going to be that stingy.
 
Stuff like clothes and groceries are a rounding error compared to the big 3 daycare/housing/college. I also think the cultural environment has shifted a lot over the last 50 years that have made it much more difficult to do the "cheap kid" thing coming from a professional class. Single wage earner households are more rare, college is now far more expensive, and housing is also relatively more expensive compared to physical goods like clothes.
I'm not a dink and in my opinion those items are things I have/would/do spend on our kids because I could. But, none of them are mandatory. For example I started my young life living in a 1 bedroom apartment with my parents living in the projects. It wasn't until later in life where they earned enough money to upgrade. My child care was my grandparents. My parents could not afford paying for college but they did help with some expenses. I am now a physician.
I agree that you CAN live in a 1 bedroom apartment with kids. Some are forced to do so through economic necessity, but it's not a realistic expectation for a couple who each make six figures in their late 20s/early 30s. Regardless, you still need to pay for childcare if you plan to keep working unless you have a family member willing to work for free. Not everyone has parents who are willing and able to do so. In fact, it's a relatively unusual situation these days. My parents still work and my in-laws were pretty direct that they had no interest in being our free nanny (and we did not even ask!).
EnjoyIt
Posts: 8362
Joined: Sun Dec 29, 2013 7:06 pm

Re: How did your savings change after kids?

Post by EnjoyIt »

alfaspider wrote: Tue Apr 02, 2024 3:45 pm
EnjoyIt wrote: Tue Apr 02, 2024 3:37 pm
alfaspider wrote: Tue Apr 02, 2024 2:00 pm
EnjoyIt wrote: Sun Mar 31, 2024 4:38 pm
learning30 wrote: Sun Mar 31, 2024 4:31 pm Hello, I'm 31 and my wife is 26. We're thinking of having a two kids in the next 5 years. How did your retirement savings change after you had kids? Did it fall of a cliff? Were you still able to save 25-30% of HHI? For context, my wife and I both work remote and make low six figures each. Currently we are maxing out 401k, roth iras, I'm doing an HSA, ESPP, and $12kish to taxable every year.

I would love to not take my foot off the gas with this but I just don't know with 2 kids.
Kids are expensive if you want them to be. You can spend as much or as little as you want on them. Plenty of people get used clothes, get lowest cost groceries, have a family member keep an eye on your kids while you’re at work, send them to public school with minimal activities and don’t pay for college.

Or

You can hire a nanny or two, buy name brand clothes, buy only organic groceries, send them to private school, buy a new car for them, set them up with lots of expensive extracurricular activities and pay for their private college.

Or

Something in between. It’s all up to you.
There are three BIG expenses that are close to mandatory with kids. I don't agree (at least with DINKs) that it's realistic to skimp.

Childcare: Unless you have a selfless family member willing to do it for free, you are paying for childcare for 5 years and there are no safe/cheap options that will allow you to both continue working full time. One spouse quitting the workforce or scaling back their career is an even bigger financial hit if both are career professionals to start. As a parent of (recently) school age kids, I don't know a single one of my peers who has avoided paying a substantial amount of money for childcare.

Housing: Another huge cost of kids is housing if you don't already live in a house with the space you would want with kids. We'd still happily be in our 1600sq ft house if it were just the two of us. Granted, nothing mandates more space with kids, but very few people would be comfortable in a 1bd apartment with 4 kids.

College: Yes, you can refuse to pay for college, but parents who can afford to pay for college but refuse put their kids in a tough spot with financial aid. Very few parents of means are going to be that stingy.
 
Stuff like clothes and groceries are a rounding error compared to the big 3 daycare/housing/college. I also think the cultural environment has shifted a lot over the last 50 years that have made it much more difficult to do the "cheap kid" thing coming from a professional class. Single wage earner households are more rare, college is now far more expensive, and housing is also relatively more expensive compared to physical goods like clothes.
I'm not a dink and in my opinion those items are things I have/would/do spend on our kids because I could. But, none of them are mandatory. For example I started my young life living in a 1 bedroom apartment with my parents living in the projects. It wasn't until later in life where they earned enough money to upgrade. My child care was my grandparents. My parents could not afford paying for college but they did help with some expenses. I am now a physician.
I agree that you CAN live in a 1 bedroom apartment with kids. Some are forced to do so through economic necessity, but it's not a realistic expectation for a couple who each make six figures in their late 20s/early 30s. Regardless, you still need to pay for childcare if you plan to keep working unless you have a family member willing to work for free. Not everyone has parents who are willing and able to do so. In fact, it's a relatively unusual situation these days. My parents still work and my in-laws were pretty direct that they had no interest in being our free nanny (and we did not even ask!).
My parents provide free daycare and wish they can do it more often. We opt to pay for child care as well because too many days with grandparents and no rules/discipline causes problems. My spouse and I hope to one day be as close with our kids family as my parents are with us.

I know plenty of parents who have this attitude that nothing is too good or too expensive for their kids while others are more frugal. What kids need is a roof, food, clothing and most importantly love. Love is free, and the rest can cost as much as you let it. The only thing I will agree with you on is that if there are no relatives that can help, both parents work and make good income, then hiring daycare help is less expensive than one of the spouses being a stay at home parent. On the other hand, I know of one family who paid for the stay at home parent to go back to work. This is because of their high tax bracket the spouse made less than they paid for daycare.
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BrooklynInvest
Posts: 1199
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Re: How did your savings change after kids?

Post by BrooklynInvest »

Not much.

We used to go out a lot. Then we had a kid and stayed home a lot ;-)

We had a nanny for a little while but then covid hit. His preschool was an additional expense but not insane. Summer activities can add up and we want him to be busy and have fun. We don't have family close but have a wonderful extended family in the neighborhood. We bought some used kid stuff and the only expensive clothes he has/had were gifts. His food can be expensive - we aim for organic when we can, but he doesn't eat much... yet. Thankfully the public schools by us are great else the math would change drastically.

Overall, I think we spend more than we did pre-kid. But I thought it'd be worse.

Good luck OP!
alfaspider
Posts: 4883
Joined: Wed Sep 09, 2015 4:44 pm

Re: How did your savings change after kids?

Post by alfaspider »

EnjoyIt wrote: Tue Apr 02, 2024 4:12 pm
alfaspider wrote: Tue Apr 02, 2024 3:45 pm
EnjoyIt wrote: Tue Apr 02, 2024 3:37 pm
alfaspider wrote: Tue Apr 02, 2024 2:00 pm
EnjoyIt wrote: Sun Mar 31, 2024 4:38 pm

Kids are expensive if you want them to be. You can spend as much or as little as you want on them. Plenty of people get used clothes, get lowest cost groceries, have a family member keep an eye on your kids while you’re at work, send them to public school with minimal activities and don’t pay for college.

Or

You can hire a nanny or two, buy name brand clothes, buy only organic groceries, send them to private school, buy a new car for them, set them up with lots of expensive extracurricular activities and pay for their private college.

Or

Something in between. It’s all up to you.
There are three BIG expenses that are close to mandatory with kids. I don't agree (at least with DINKs) that it's realistic to skimp.

Childcare: Unless you have a selfless family member willing to do it for free, you are paying for childcare for 5 years and there are no safe/cheap options that will allow you to both continue working full time. One spouse quitting the workforce or scaling back their career is an even bigger financial hit if both are career professionals to start. As a parent of (recently) school age kids, I don't know a single one of my peers who has avoided paying a substantial amount of money for childcare.

Housing: Another huge cost of kids is housing if you don't already live in a house with the space you would want with kids. We'd still happily be in our 1600sq ft house if it were just the two of us. Granted, nothing mandates more space with kids, but very few people would be comfortable in a 1bd apartment with 4 kids.

College: Yes, you can refuse to pay for college, but parents who can afford to pay for college but refuse put their kids in a tough spot with financial aid. Very few parents of means are going to be that stingy.
 
Stuff like clothes and groceries are a rounding error compared to the big 3 daycare/housing/college. I also think the cultural environment has shifted a lot over the last 50 years that have made it much more difficult to do the "cheap kid" thing coming from a professional class. Single wage earner households are more rare, college is now far more expensive, and housing is also relatively more expensive compared to physical goods like clothes.
I'm not a dink and in my opinion those items are things I have/would/do spend on our kids because I could. But, none of them are mandatory. For example I started my young life living in a 1 bedroom apartment with my parents living in the projects. It wasn't until later in life where they earned enough money to upgrade. My child care was my grandparents. My parents could not afford paying for college but they did help with some expenses. I am now a physician.
I agree that you CAN live in a 1 bedroom apartment with kids. Some are forced to do so through economic necessity, but it's not a realistic expectation for a couple who each make six figures in their late 20s/early 30s. Regardless, you still need to pay for childcare if you plan to keep working unless you have a family member willing to work for free. Not everyone has parents who are willing and able to do so. In fact, it's a relatively unusual situation these days. My parents still work and my in-laws were pretty direct that they had no interest in being our free nanny (and we did not even ask!).
My parents provide free daycare and wish they can do it more often. We opt to pay for child care as well because too many days with grandparents and no rules/discipline causes problems. My spouse and I hope to one day be as close with our kids family as my parents are with us.

I know plenty of parents who have this attitude that nothing is too good or too expensive for their kids while others are more frugal. What kids need is a roof, food, clothing and most importantly love. Love is free, and the rest can cost as much as you let it. The only thing I will agree with you on is that if there are no relatives that can help, both parents work and make good income, then hiring daycare help is less expensive than one of the spouses being a stay at home parent. On the other hand, I know of one family who paid for the stay at home parent to go back to work. This is because of their high tax bracket the spouse made less than they paid for daycare.
Doesn't apply to the OP, however. You'll almost always come out ahead working (financially) if the spouse makes at least ~$75k. The OP says both spouses make six figures. And you also have to consider the potential for permanent loss of career progression if you leave the workforce for an extended period of time. It's not a big issue for some careers (like school teachers), but it's extremely difficult for other paths (like lawyers). Regardless, childcare is rarely truly free.

My kids have been an enormous expense, but I don't think it has much to do with wanting to spoil them. They don't get fancy clothes or organic food. They went to the most reasonably priced daycare/preschool we could afford and now attend public school. We did spend more on housing with two kids, but that was for OUR sanity rather than for our kids. We weren't planning on moving, but two kids in a small house with no yard was not something we were willing to live with when we didn't have to.
Maverick3320
Posts: 1129
Joined: Tue May 12, 2015 2:59 pm

Re: How did your savings change after kids?

Post by Maverick3320 »

learning30 wrote: Sun Mar 31, 2024 5:01 pm
livesoft wrote: Sun Mar 31, 2024 4:44 pm Really not much change. We were saving the entire gross salary of the highest paid earner. The lowest paid earner paid all expenses including taxes.

Both of you making 6-figures? At home? That should make day care less of a problem. For a short while we shared a nanny with another couple who had a child the same age. Otherwise we paid for external daycare. As for items that the children needed, we got most of them free from friends and family who had kids about year older than our kids.

Perhaps the main problem is succumbing to societal and peer pressure that your children should get more stuff that they don't need. For instance, our kids have never been to a Disney theme park and they are your ages.
I plan on doing most things cheap with the kids. Why would working at home make day care less of a problem - do you think it would be possible to watch the kids ourselves while we both work from home? Cost wise, every day care I've looked prematurely is around $1k/mo per kid
If you have an even remotely involved job, trying to watch a child while working is nigh on impossible. Perhaps some can do it. We absolutely could not.
Maverick3320
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Joined: Tue May 12, 2015 2:59 pm

Re: How did your savings change after kids?

Post by Maverick3320 »

learning30 wrote: Sun Mar 31, 2024 8:57 pm
fulltilt wrote: Sun Mar 31, 2024 8:22 pm
learning30 wrote: Sun Mar 31, 2024 4:31 pm Hello, I'm 31 and my wife is 26. We're thinking of having a two kids in the next 5 years. How did your retirement savings change after you had kids? Did it fall of a cliff? Were you still able to save 25-30% of HHI? For context, my wife and I both work remote and make low six figures each. Currently we are maxing out 401k, roth iras, I'm doing an HSA, ESPP, and $12kish to taxable every year.

I would love to not take my foot off the gas with this but I just don't know with 2 kids.
Childcare was far and away the biggest expense and challenge. $1k a month per kid sounds about right but there is a range.

Kids will eat up PTO like mad when they are younger. They are sick constantly.

You don’t need to buy a ton of stuff, but there is a certain amount of baby paraphernalia that makes life more tolerable.

When they are babies, I would guesstimate we paid $16k per kid per year all in. We didn’t do fancy trips or fancy schools.
So $12k in daycare then the other $4k covered everything else throughout the year?
I live in a MCOL college town of 250,000. Childcare is $1500/kid/month, roughly.
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