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

tichellady

Wed, Oct 14 2015, 9:09 pm

Everyone is telling you to change your expenses- which you can try but may not work well for you. Honestly saving some money on groceries isn't going to get you a House that mug sooner. I think it takes at least a few years of both spouses working to save a nice amount of money. It's hard for young couples to balance all their expenses because childcare is expensive and salaries are usually on the lower end in the beginning of careers. You may need to choose between saving more money right now or having another kid. We can't tell you what you should do.

chani8

Thu, Oct 15 2015, 7:08 am

Why would you want to buy a house anyway? Then you are stuck in one place for years.

God said be fruitful and multiply. Nowhere is it written, own your own home.

Dolly Welsh

Thu, Oct 15 2015, 2:13 pm

It is so.

As for "errands", have stuff delivered, and food too.

As for dry cleaning, the men need that and we do sometimes. But there is microfiber. A woman can evade the dry cleaner if she is careful. Most of the time. The mesh laundry bags are good. Wash your stuff inside out in cold water. Hang to dry.

Nobody needs $ 75 a month in little pleasures. Pizza and ordering Chinese and take out will do this. These little things we do to ease the pain of working (if it didn't hurt, we would be paying them, not them paying us) is a hidden cost of working.

The minute you leave the house you see advertising, and you start spending on stuff you don't need. It's safer at home. Advertising is powerful culture and we all want to be members in good standing and part of culture. We are affected by it.

The tax man says that $75 is really $110.

That's a thousand a year. It is a cost of working. Add it to the other costs.

imaima

Thu, Oct 15 2015, 3:05 pm

chani8 wrote:

Why would you want to buy a house anyway? Then you are stuck in one place for years.

God said be fruitful and multiply. Nowhere is it written, own your own home.

My question is: why do you want to have another child if you barely have time for this one?

Dolly Welsh

Thu, Oct 15 2015, 3:17 pm

Do three people need a house?
Is a house necessarily a great investment always?

The Happy Wife

Thu, Oct 15 2015, 8:24 pm

amother wrote:

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.

Wow, it's really great that you are so on top of where your money goes.

I see that you wrote that groceries are very expensive where you live, but see if you can cut out a little here. Maybe you can buy some things online, or get deliveries from somewhere cheaper, or stock up on some items from regular (not specifically Kosher) stores once in a while.

Maybe you can try to cut down spending on coffee shops and take out Try to make lunches as often as possible. I would try to put coffee, fast food, and restaurants into one budget category, and try to make the amount a little lower. Set a new goal and see how you do! Smile

$250 seems high for clothes and toys and shopping. Is there anyone in the family that really needs new clothes every month? Does your child really need new toys every month? I would say try to break this category down further. Set an amount for clothes, and if you don't spend that amount have it roll over to the next month. If you're buying a new outfit every month, try to see if you can stretch it to every 3 months. Maybe see if you can re-sell older clothes to help you pay for newer. Try shopping sales or cheaper stores.

Is the $300 for unexpected expenses a regular thing? Try to see what sort of expenses these are so you can plan for them better. That's a lot to be unexpected every month.

What sort of home improvemnt expenses do you have? I would imagine one of the perks of renting is that the landlord pays for most problems that come up. Especially since you say this amount is not always used, maybe you can lower this number a bit and put any that's left into an emergency fund. I would say also for medical expenses, of you say it's not often needed, reduce the amount you budget for and put the rest into an emergency fund. Make sure you have a large enough emergeny fund before saving money for a house.

Do you keep track of where your cash/atm money goes? That also seems high for a miscellaneous expense.

Since your goal is saving for a house, try to set a specific amount that you want to save. Look at your goal, and try to decide where it would be worthwhile to make some cuts. When you see your savings going directly toward your goal, it might give the extra push to scrimp in some areas. I know mint has a feature for setting goals, and I really found that helpful.

Mint is great for seeing where you've been spending. Now you can take it to the next level and set some new money saving goals. Try to think of any other expenses you might have that you could have overlooked. Shul membership? Yontiv expenses (those always throw budgets off). Vacations/travel? See if you can figure how much per year you spend on these things, if applicable, and divide the total by 12 to fit into your monthly budget.

You sound like you are headed in the right direction. A second child can certainly fit into your budget, too. You might need to look into different childcare options with a second child. You might need to tighten the belt some more, or in different areas, but you can probably make it work. I personally would try to save as much as possble before expenses go up. Hope this helps!

Amarante

Thu, Oct 15 2015, 8:40 pm

Dolly Welsh wrote:

Do three people need a house?
Is a house necessarily a great investment always?

Not exactly on topic but in general, a house is the best investment a middle class person can make. Of course with the proviso, that it is a long term investment.

At the beginning, it may be a stretch but if you don't feel the need to keep buying bigger houses, in a few years your costs would be far less than a comparable rental.

At the end of twenty years, you have a really good amount of money. You can live mortgage free or down size or even use as a reverse mortgage as income when you retire.

For most people, it will represent most of their net worth when they retire.

Of course, that assumes people are prudent and pay off their mortgage and don't use the equity as an ATM. And it's a long term investment but at the end if twenty or thirty years, you have a valuable asset and a renter has nothing.

Now people might say that a renter is spending less money but in general a house is the best investment a regular person can make. In the US, there are tax benefits and most people don't take the amount saved if they rent and invest for retirement so it's not a good argument to make.

lucky14

Thu, Oct 15 2015, 9:13 pm

There are so many additional costs to owning a home. You have to pay for so many things to keep up with it. If you're renting, that's all taken care of for you hopefully. You really have to think about that stuff when deciding if you have enough money to buy a house.

Amarante

Thu, Oct 15 2015, 9:28 pm

lucky14 wrote:

Of course there are costs to owning a home that are more than just the mortgage. And one would be financially stupid not to figure those costs into monthly housing expenses.

But for most people, as a long term investment, a house can't be beat. Your fixed housing costs remain pretty much remain constant whereas rent is going to increase - and at the end of 30 years, you are left with nothing versus a substantial amount of value in a fully paid off house.

If you can't afford, you can't afford. Most of the "middle class" people I know have most of their net worth in their house - again assuming you look upon it as a long term investment. Back to the old fashioned way of buying a house - foregoing expensive furniture and improvements for awhile and then in a few years, things even out in terms of monthly housing expenses - and then in a few years you are ahead of the game and then in 20 years, you have amassed a huge amount of money and a renter probably has nothing. Now if you are one of those renters who is paying $100 a month for a rent controlled apartment and investing the difference between rent and a mortgage diligently, that's different but I am talking about an average person.

amother

Mauve

Fri, Oct 16 2015, 12:33 pm

How much does MINT cost? if it is free I think it might be super handy for us... I have been tracking our receipts on excell but lose them, forget to add them in etc and I am a month behind...

Maybe

Fri, Apr 13 2018, 1:28 pm

amother wrote:

How much does MINT cost? if it is free I think it might be super handy for us... I have been tracking our receipts on excell but lose them, forget to add them in etc and I am a month behind...

Mint is free ,

Jewish existence is supernatural, so is Hashem's ability to sustain us.

Maybe

Fri, Apr 13 2018, 1:29 pm

chani8 wrote:

Why would you want to buy a house anyway? Then you are stuck in one place for years.

God said be fruitful and multiply. Nowhere is it written, own your own home.

Well said

fbmommy

Fri, Apr 13 2018, 5:09 pm

OP, I was actually quite impressed with your budget.
Two points about small ways to reduce it-you may want to look into combining your phone and internet with a cable company which may save you a bit.
Also, you mentioned that food is high in your area. Wal Mart and Target both have really good prices on lots of basics (cereal, snacks, paper goods, cleaning suppliets etc) and you may want to look into ordering what you could from them instead of buying in your local store.

esther11

Fri, Apr 13 2018, 5:15 pm

This thread is from oct 2015, hopefully OP has a financial plan in place by now!

amother

Rose

Fri, Apr 13 2018, 5:45 pm

Looks like you have about a good $500. Extra in there between entertainment/ restaurants / fast food / Ny life / coffee / and the $250 shopping (which is rather high, since not including pharmacy, toiletries, any food)
I’m not the super frugal type at all, but if you want to save money seems like you definitely can - without austerity measures.