How can I afford a 2nd child and save for a house?

amother

Maroon

Wed, Oct 14 2015, 11:12 am

Between my husband and I our gross income is $130k. Net income every month is about $7300 and our budget leaves us with about $1300 a month extra to put into savings. The biggest expenses are rent and childcare. With one child our childcare is about $1200 a month. Rent is $1700 - we live in NY. (Note - my husband just started working and as a result we do not have much in savings, married 3 years.) I was wondering what other people's experiences were when having an additional child and trying to save for a house at the same time. In childcare alone, an additional child will add about $1000 a month. Tax savings doesn't yield that much, maybe a few thousand.

Thoughts?

The Happy Wife

Wed, Oct 14 2015, 11:24 am

Holy moly. Your monthly expenses sound very high for a family with one small child. Maybe if you give more details about your expenses people can give you suggestions on how to save more.

But it sounds like you have a good income so hopefully you can make it work! Smile

amother

Royalblue

Wed, Oct 14 2015, 11:44 am

We've been in same boat for past couple of years. Now dh got a job and I'm cutting back so combined will be around $165k. Still in tiny one bedroom because we can't afford a two bedroom yet (have some new, unexpected and not typical bills that add about $1500 to our monthly bills which is costing us the 2 bedroom apartment and any potential savings). I wish I could be thinking about savings for a house but I think I'm doomed to live in this tiny one bedroom forever. Even if we could pull off the extra rent can't pull off the moving costs. Still don't think a second child would put us over the edge though.

mha3484

Wed, Oct 14 2015, 11:51 am

My situation is a bit different in terms of childcare but I see that with many friends and family members, when they have more than one child and very full time jobs its easier to have someone come to their home instead of day care which might make your child care costs more affordable.

amother

Maroon

Wed, Oct 14 2015, 12:02 pm

OP here:
Here's a breakdown (I just started using mint.com - its great for budgeting, really eye-opening)

1700 rent
1200 childcare
118 verizon wireless
180 con ed (this is based on the amount we pay during the summer)
250 PT
60 internet
25 NY life
19 renters insurance
25 mikvah
125 gas
125 metrocard
75 entertainment (sundays, days off)
100 interest charge (old credit card, paying down currently)
45 coffee shops
100 fast food (includes very occasional take out and if husband buys lunch)
900 food, groceries
60 medical expenses (BH not often)
75 pharmacy items, toiletries
75 home improvement (not always used)
50 sheitel care
100 laundry/dry cleaning (costs me about $15 a week to do laundry plus dry cleaning)
100 cash/atm
36 charity
250 shopping (clothing, amazon, toys etc)
75 restaurants (very rare)

Income = 7400
Expenses = 5800
Excess = 1600
Savings = 1300
Unexpected expenses/special occasions = 300

Hope my math is right, I may have left something out.

saw50st8

Wed, Oct 14 2015, 12:08 pm

OP, your food budget is around $1,000. That's what mine is for 2 adults, 4 kids and lots of company. I would definitely work on reducing that.

I would also throw more money into reducing your debt rather than savings to get rid of that bill ASAP. How much is your total debt?

Do you use the $300 surplus every month?

amother

Maroon

Wed, Oct 14 2015, 12:12 pm

Op here.
I should be done with my credit card debt by November. I'm not putting the extra money into savings until its done with.
Also, this budget is brand new for us since my husband just started working.

I'm not sure how your food bill is that low. I think the kosher stores near me are just more expensive, I dont live in brooklyn and theres not that many places to shop around.
Weekly grocery bill is about 125 plus 75 for shabbos

Iymnok

Wed, Oct 14 2015, 12:18 pm

Break down your grocery bills. Buy bulk, sales, plan out what to get at the different stores. Cut out convenience foods when you can. That means premade, individual packets, takeout, soft drinks, etc.
Cooking from scratch is cheaper and healthier.

wifenmother

Wed, Oct 14 2015, 12:26 pm

OP, you may want to look further into what mha3484 suggested. I have found that having someone in the house with two kids is cheaper than sending two kids to childcare. It also frees up the time spent shepherding the kids to and from childcare, and many times the sitter will be able to assist with food prep, ironing and the like, resulting in a calmer mother and more attention for the kids than childcare.

I will also comment on your food expenses. I spend as much with 4+ kids per month. Perhaps look into what items you can eliminate from there.

Also, if restaurants ($75), medical ($60), and home improvement ($75) are indeed very rare, perhaps you can cut down on the $300 surplus/$100 ATM.

It's definitely doable. Good luck!

amother

Royalblue

Wed, Oct 14 2015, 12:27 pm

saw50st8 wrote:

I would love to see what your shopping cart looks like because I make very simple shabbos and rarely have guests lately and my shopping comes out to that or more monthly and that's besides constant take out because I don't cook much during the week due to long work hours.

amother

Maroon

Wed, Oct 14 2015, 12:37 pm

Op here.
Up until this past September my 2 year old daughter was at home with a sitter. It was about $1000. She was getting bored and she's a very smart social child so I put her in playgroup but I still need before / after care. The total is about $1200. It's not a huge difference in cost.
As for food - lunches and suppers are almost always homemade.
We both work long hours and I don't have extra time to spend in the kitchen. I can't cut back by starting to make bread etc etc
How do you make shabbos on such a small budget?
And we have seriously simple shabbos and almost never have company.

saw50st8

Wed, Oct 14 2015, 12:42 pm

amother wrote:

We don't do a lot of takeout because we just can't afford it.

Dinners really range in price. Some weeks, it's macaroni and cheese or vegetable omelets or pancakes and fruit. Other times it's meatballs or roast chicken or salmon. It depends how busy I am and what I have in the freezer and what's for sale.

I feel you on the long hours. When I am on it, I either buy in bulk, prep and freeze or I cook first thing in the morning before I leave (I leave around 5:30) and then when it's done, my husband puts it in the fridge for later.

I also have 4 young kids (7, 5, 4 and 2). My seven year old eats like a man, but the others still eat like kids :-)

amother

Brown

Wed, Oct 14 2015, 12:44 pm

I added up all my groceries last night for a family of two adults and a pre schooler who eats a fair amount. I think we spent 1k on food on the last credit card billing statement which included yomtov we were home for all meals the whole tishrei. My budget for a regular month is $800.

Shabbos is Fish either gefilte or salmon depends on sales, a few salads or dips, Chicken soup made with soup bones and veggies, Chicken, a veggie and a starch. Lunch is the same fish and salads, cholent and possibly one other dish. I make soup and challah alternating weeks and freeze. Same with dessert.

pesek zman

Wed, Oct 14 2015, 2:39 pm

gp2.0 wrote:

The childcare is jumping out at me as extremely expensive.

Really? For me it seems like a bargain! I guess it's all relative: I live in manhattan and my baby's daycare is a little of 2k/month, so by comparison OP's is a steal!

amother

Maroon

Wed, Oct 14 2015, 2:47 pm

OP here
My childcare is high because I need care for the hours of 7:30-6 everyday (Fridays are just a bit shorter). I'm out from 7 am to 5 pm and I need the leeway of the extra hour until 6 to run errands. My husband is out from 7:30 until 7 or later.

Playgroup is $550+100 for extended hours
Babysitter is about $125 a week for before and after playgroup. Also note, for these extra hours we share the sitter with a friend. So if I wouldn't be sharing it would be more like $250.
This comes to a total of about $1200 a month, give or take a bit.

Dolly Welsh

Wed, Oct 14 2015, 3:27 pm

Childcare is paid for out of post-tax money. Taxes are not nothing. If you pay $1000 in childcare, you had to make, what? $1600 or so in salary money.

Reduce your salary by that much, in your mind. You don't really make that $1600; it's phantom money.

Also take your work expenses out of your income (transportation, lunches and clothes) being careful to also add the taxes onto that sum. That amount also is phantom money. You didn't make anything yet.

Now you know what you really make. Your salary is much lower than you think it is. This is why some people don't work. With children, it may not pay.

Food goes into a slow cooker and that's dinner. This takes fifteen minutes before you leave for work. Do NOT put the deli workers' children through college. No take-out food.

I remark that people who buy a cup of brewed coffee are not being especially fiscally prudent. A little boiled water is not worth five dollars. A jar of instant coffee is handy.

It is true your husband just started his job. When you get a sense he is succeeding there, you may re-think how you allocate your time and energy, depending on your personal tastes. To each her own.

imasinger

Wed, Oct 14 2015, 8:03 pm

One minor addition to Dolly's excellent advice.

If either of your jobs offer a cafeteria plan, you can take at least some of your childcare (and medical) expenses out of pretax money. It's worth checkng into,and collecting the recepts.

Also, if you can do your errands at a different time (either with kid in tow, or late, after your DH returns), and pick up as soon as you finish work, you can save, what, about 500 per month? That's 6000 a year.

Last edited by imasinger on Wed, Oct 14 2015, 8:04 pm; edited 1 time in total

Wed, Oct 14 2015, 8:03 pm

Thanks for sharing your budget. I'm sure you are trying to keep expenses down, but there may be ways to reduce your expenses further without too much pain.

What is PT? Physical therapy?

I understand giving yourself $75 a month for fun - that's less than $20 a week, but enough to see an exhibit or get an ice cream - but I'm afraid I agree with Dolly about the take-out and coffee shop. The $75 "fun" money already covers the occasional slice of pizza. Yes, you work a full day and it's hard to make meals. But please try (as you say you are in one of your other posts). The crock pot is the working mom's best friend, at least in the kitchen.

Your shopping and pharmacy expenses seem a little high to me as well. Do you need new clothing and toys every month? Your child will need clothing and gear as she grows, but she won't care if the labels are from Target. If your pharmacy bill is high because of prescription copays, see if any of your medical needs may be met with $4 generics at big-box stores such as Target or Walmart.

$40 per month for dry cleaning...if dry-clean-only clothing just needs to de "freshened" and is not seriously soiled, use Dryel (assuming the use of the dryer is less than the cost of dry-cleaning), as long as the garment can be pressed reasonably easily at home if necessary. IME, Dryel is great for blouses, sweaters, and some dresses.

Good luck! It's not easy when you live in a high cost-of-living area.