Firebird
Senior Associate
Joined: Dec 29, 2010 12:55:06 GMT -5
Posts: 12,448
|
Post by Firebird on Jul 11, 2011 11:26:34 GMT -5
Cawiau's thread inspired me to take a look at DF's and my finances to see if we can nail down a realistic date for TTC. DF and I both agree on the following:
1. We want kids as soon as possible. 2. We want to be out of debt first. 3. We want one of us to have the option of staying home for at least a year. 4. We both plan to continue working after that.
Given that, here's where we're at now.
Income #1 (mine): $3,300 / month take home Income #2 (his): $2,600 / month take home (minimum; often more)
Together we gross about $110,000 per year not including bonuses or the raise DF just got because he's still negotiating it (will probably be a couple dollars per hour).
Monthly Expenses:
Rent: $1,250 Utilities: $150 Car #1: $350 (0%, ~$7,000 balance) Car #2: $365 (~5%, ~$10,000 balance) Ins #1: $160 Ins #2: $65 SL: $200 (6.8%, ~$13,500 balance) Dues: $125 Allowance: $500 Groceries: $200 Gas: $150 Other: $185 (includes stuff like copays, household/kitty expenses)
Total: $3,700
Remaining after expenses: $2,200
Assets: 401k (mine): ~$8,000 (10% contribution, no match) ROTH (mine) ~$13,000 (fully maxed every year, $1k left in 2011) EF (ours): ~$2,000
Total: $23,000
Liabilities: Car #1: (~$7,000) Car #2: (~$10,000) SL: (~$13,500)
Total: (~$30,500)
I'd like our EF to be $10,000 before we attack the debt. Taking expected one-offs into account, my target for that goal is the end of the year. Assuming that goes well, we'll plan to allocate the additional $2k per month to our debt.
By then, our liability balance should be closer to ($27,000) with regular payments. Obviously, we'd attack the highest interest debt first - my student loan. Paying $2,000 per month in addition to our regular $915 in payments means our debt will go down $2,915 per month. And given that, it should be gone in 9.5 months - or by October 2012, which coincidentally will be our first wedding anniversary! (We obviously wouldn't prepay the first car note at 0% with the lowest balance, but by the time we get the other two loans paid off it should be all but gone anyway).
With our expenses reduced to $2,785, we can just about make it on DF's income alone and bank mine. So my thought is that we could start trying in October 2012. We'd have at least an additional nine months to bank that $3,000 which means our EF would be at least $35,000 even if we had a couple of emergencies. And that would be a good amount to have in savings, I think, if one of us decided to take a year off work (with careful spending, we shouldn't even need to dip into it for normal monthly expenditures regardless of which one of us stayed home - and if that worked out, the EF could double as the beginning of a house downpayment).
We will both be covered by one another's insurance come October, and we both have life insurance so that's not a concern. We obviously need to kick up the retirement savings at some point, but DF just got a raise and I'm basically planning to allocate that money to either a 401k or a ROTH for him. I think 20% is a reasonable goal for us right now, and we're currently at about 10% (of our JOINT, GROSS income - it's 17% of my gross).
Does this sound reasonable? Am I missing anything huge? Sorry for the infodump, but I'm looking forward to telling DF that if everything goes to plan we could start trying for kids in a year and a few months ;D
|
|
NomoreDramaQ1015
Community Leader
Joined: Dec 20, 2010 14:26:32 GMT -5
Posts: 47,323
|
Post by NomoreDramaQ1015 on Jul 11, 2011 11:32:18 GMT -5
You should call your insurance companies and find out their maternity policy. Mine automatically covered pre-natal appointments and all taht came with it 70%, I did not have to meet my deductible first. Then I have an OOP max of $2k so for myself and DD I paid about $4k for everything. You can save yourself a lot of headaches and money by calling BEFORE you get pregnant. The insurance rep I talked to said she cannot count how many times she's had a pregnant woman call up and screech at her for the policy not covering this or that and she wants to say "Well if you had looked at your policy BEFORE getting pregnant". Then I also discussed how leave works with employee services so I knew when I had to get the paperwork filed and stuff. Makes life a lot easier to know that ahead of time than wait till the day off and have to remember to call people. I had my paperwork in at week 32. They just changed the start date when I contacted them after having DD a week earlier than my estimated due date. Also find otu how it works to add the baby to insurance, especially if you plan on having her on both policies. We just have one and I had 30 days after she was born to get her on my insurance. Lucky I did not have to have her SS yet because that took 6 weeks to show up. She was covered under me for the first 30 days and if I did not get her on by then I would have to wait till the next insurance renewal, which is in November.
|
|
Deleted
Joined: May 16, 2024 9:39:44 GMT -5
Posts: 0
|
Post by Deleted on Jul 11, 2011 11:34:26 GMT -5
Sounds reasonable. Kudos for the plan!
|
|
zibazinski
Community Leader
Joined: Dec 24, 2010 16:12:50 GMT -5
Posts: 47,869
|
Post by zibazinski on Jul 11, 2011 11:36:10 GMT -5
Do you want a house?
|
|
swasat
Senior Member
Joined: Apr 13, 2011 9:34:28 GMT -5
Posts: 3,735
|
Post by swasat on Jul 11, 2011 11:37:30 GMT -5
Since you plan to take an year off after having the baby, do you hope tp get the same job or same salary once you go back? IMHO that is something to consider. If you are very confident that you WILL be able to command that salary back, thats good! If not, consider that in your decision. You will have to pay childcare expenses that will eat up a HUGE chunk of your budget.
|
|
Deleted
Joined: May 16, 2024 9:39:44 GMT -5
Posts: 0
|
Post by Deleted on Jul 11, 2011 11:39:03 GMT -5
You should call your insurance companies and find out their maternity policy. Mine automatically covered pre-natal appointments and all taht came with it 70%, I did not have to meet my deductible first. Then I have an OOP max of $2k so for myself and DD I paid about $4k for everything. You can save yourself a lot of headaches and money by calling BEFORE you get pregnant. The insurance rep I talked to said she cannot count how many times she's had a pregnant woman call up and screech at her for the policy not covering this or that and she wants to say "Well if you had looked at your policy BEFORE getting pregnant". Then I also discussed how leave works with employee services so I knew when I had to get the paperwork filed and stuff. Makes life a lot easier to know that ahead of time than wait till the day off and have to remember to call people. I had my paperwork in at week 32. They just changed the start date when I contacted them after having DD a week earlier than my estimated due date. Also find otu how it works to add the baby to insurance, especially if you plan on having her on both policies. We just have one and I had 30 days after she was born to get her on my insurance. Lucky I did not have to have her SS yet because that took 6 weeks to show up. She was covered under me for the first 30 days and if I did not get her on by then I would have to wait till the next insurance renewal, which is in November. except who knows if she will still have the same health insurance when she gets pregnant and even when she delivers (if she crosses the end of the year), so while she can plan based on what she has now, it could change dramatically.
|
|
muttleynfelix
Junior Associate
Joined: Dec 20, 2010 15:32:52 GMT -5
Posts: 9,406
|
Post by muttleynfelix on Jul 11, 2011 11:43:33 GMT -5
Definately research your insurance options. I think your plan looks reasonable.
|
|
Deleted
Joined: May 16, 2024 9:39:44 GMT -5
Posts: 0
|
Post by Deleted on Jul 11, 2011 11:47:46 GMT -5
Firebird, could each of you take off 6 months instead of one person taking 1 year off? How much will your car insurance change when you get married?
|
|
telephus44
Well-Known Member
Joined: Dec 23, 2010 10:20:21 GMT -5
Posts: 1,259
|
Post by telephus44 on Jul 11, 2011 11:51:07 GMT -5
I think it looks reasonable. I would just add to try and make a "post baby" budget that includes diapers, daycare, and formula (even if you're going to stay home and nurse. You should still have a plan of what it costs just in case).
I also want to say it's a great idea to have a whole first year of marraige just to yourselves before the kids get there. Both are big life changing events.
|
|
alabamagal
Junior Associate
Joined: Dec 23, 2010 11:30:29 GMT -5
Posts: 8,121
|
Post by alabamagal on Jul 11, 2011 11:54:51 GMT -5
Some quick points: Definitely look into the insurance and estimate cost for delivery. Also remember that many times deliveries cost more due to complications, so maybe estimate for C-section delivery. I also remember when I had kids ~20 years ago, we also had a $800 bill for the child (which is applied toward their own deductable). Medicall costs are the biggest "uncontrollable" expense you are going to have. When planning a budget for going from 2 incomes to 1 income, remember that your taxes will be reduced, should be quite a bit. Plus hopefully you will have a nice new "deduction" Depending on how you currently have your withholding set up, when you go to one working, you can adjust your withholding so that the one paycheck is larger (due to less taxes). You should be able to find an online estimator for this.
|
|
Firebird
Senior Associate
Joined: Dec 29, 2010 12:55:06 GMT -5
Posts: 12,448
|
Post by Firebird on Jul 11, 2011 11:58:45 GMT -5
You should call your insurance companies and find out their maternity policy. Mine automatically covered pre-natal appointments and all taht came with it 70%, I did not have to meet my deductible first. Then I have an OOP max of $2k so for myself and DD I paid about $4k for everything.
Good call. It actually didn't occur to me that my leave would be covered, but who knows?
Do you want a house?
Yup, but we're in no rush. Unless we happen to find a screaming deal when we have the money, DF and I don't want to buy a house in this state. We plan to leave California in five years or so and buy a house in our new state.
Since you plan to take an year off after having the baby, do you hope tp get the same job or same salary once you go back? IMHO that is something to consider. If you are very confident that you WILL be able to command that salary back, thats good! If not, consider that in your decision. You will have to pay childcare expenses that will eat up a HUGE chunk of your budget.
I'm only taking as much time as my current employer will allow and still let me come back afterward. If that's six months, fine - if I can take a year off and still have a place at the end of the year, I'd prefer that.
As for child care, DF and I basically work opposite schedules and while I hope that won't be the case forever, it is somewhat to our advantage when it comes to kids. Assuming our current schedules don't change much, we should only need child care 3-4 days per week. And assuming that nothing radically changes, my mother would very much like to be our kids' caregiver. She's said so many times. We will, of course, pay her something but I imagine it'll be less than the market rate for daycare.
Firebird, could each of you take off 6 months instead of one person taking 1 year off? How much will your car insurance change when you get married?
Sure, that would be fine. To be quite honest, I don't really care which of us stays home with the baby or how long we do it, especially if my mom can be our DCP. And from a strictly financial perspective, it would be better if DF did.
Car insurance shouldn't change. DF can't be added to mine, unfortunately. At some point I hope we can get rid of one of our cars, but that won't be feasible for awhile.
|
|
Deleted
Joined: May 16, 2024 9:39:44 GMT -5
Posts: 0
|
Post by Deleted on Jul 11, 2011 11:59:38 GMT -5
I also want to say it's a great idea to have a whole first year of marraige just to yourselves before the kids get there. Both are big life changing events. ^^^THIS^^^ I've read that the highest reported happiness levels in a marriage are just before the birth of a first child and they drop significantly after that. Even couples with rock solid relationships struggle after the birth of their first, so take the time to build yourselves up as a married couple before introducing a baby to the mix. I've been married twice and both marriages suffered a lot the first year of baby. The first marriage didn't survive, the second we've made it to the baby's 13 month mark and are getting our bearings again, but it was a rough ride! If I hadn't been 40 when I remarried I would have definitely waited awhile, but as it was our son was born just a few days before our first anniversary.
|
|
Firebird
Senior Associate
Joined: Dec 29, 2010 12:55:06 GMT -5
Posts: 12,448
|
Post by Firebird on Jul 11, 2011 12:00:40 GMT -5
I also want to say it's a great idea to have a whole first year of marraige just to yourselves before the kids get there. Both are big life changing events.Agreed, even if we were in perfect shape now I would want DF to myself for awhile longer When planning a budget for going from 2 incomes to 1 income, remember that your taxes will be reduced, should be quite a bit. Plus hopefully you will have a nice new "deduction" Depending on how you currently have your withholding set up, when you go to one working, you can adjust your withholding so that the one paycheck is larger (due to less taxes). You should be able to find an online estimator for this. I wonder if this factor could change the picture enough that DF could be a stay at home dad for awhile? Thoughts? Because that's pretty much our ideal situation in many ways, and it's a lot less of a hit to a man's career to raise babies for a few years than it is to a woman's.
|
|
Deleted
Joined: May 16, 2024 9:39:44 GMT -5
Posts: 0
|
Post by Deleted on Jul 11, 2011 12:02:28 GMT -5
[ I wonder if this factor could change the picture enough that DF could be a stay at home dad for awhile? Thoughts? Because that's pretty much our ideal situation in many ways, and it's a lot less of a hit to a man's career to raise babies for a few years than it is to a woman's. It is? I would think it is the opposite.
|
|
qofcc
Well-Known Member
Joined: Dec 20, 2010 13:30:58 GMT -5
Posts: 1,869
|
Post by qofcc on Jul 11, 2011 12:03:14 GMT -5
Sounds like a good plan. Compare the family coverage health insurance from both your employers to see which offers the best option. Remember your income taxes will go down once you add a dependent and if only one of you is working, so if you were the one to stay home, calculate your DH's take home based on married with 3 exemptions. Would you be able to go back to your job same job after a leave of absence or would you be looking for a new job? Would this be the time to move to the LCOLA you were talking about?
|
|
midjd
Administrator
Your Money Admin
Joined: Dec 18, 2010 14:09:23 GMT -5
Posts: 17,719
|
Post by midjd on Jul 11, 2011 12:04:31 GMT -5
This is a great idea - DH's grandma is the sole childcare provider for both our nephews, and I think SIL pays her $150 for 3-4 days a week, which is WAY less than she'd be able to find anywhere else. Plus the kiddos get quality time with great-grandma (she had kids way young so is only 68 or so and still has the energy to run around after them, somehow...) However, I know WiBeth was in a similar situation, and her dad had some health problems that left them unable to serve as childcare providers - so you may want to have a plan B built into your budget, lest you end up like Doxie
|
|
swasat
Senior Member
Joined: Apr 13, 2011 9:34:28 GMT -5
Posts: 3,735
|
Post by swasat on Jul 11, 2011 12:06:27 GMT -5
I'm only taking as much time as my current employer will allow and still let me come back afterward. If that's six months, fine - if I can take a year off and still have a place at the end of the year, I'd prefer that.
Check beforehand. Technically FMLA does not exceed 12 weeks. And most companies follow the FMLA guidelines.
|
|
Firebird
Senior Associate
Joined: Dec 29, 2010 12:55:06 GMT -5
Posts: 12,448
|
Post by Firebird on Jul 11, 2011 12:18:57 GMT -5
It is? I would think it is the opposite. How so, Arch? In my experience, women are much more harshly penalized for being on the "mommy track." Men seem almost admired for making the same choice. But perhaps this is anecdotal. In my case, I really can't take a few years off and just go back whenever - I'm on a very specific career track and if I don't spend the next 5-10 years working my butt off, there's no way I'll be where I want to be long term. I don't want to put kids on hold until then, because then I might never have them. Also, I'd prefer to sacrifice time with them when they're babies and don't specifically need me as much in exchange for more time with them when they're older and attention from Mom is more valuable. Would you be able to go back to your job same job after a leave of absence or would you be looking for a new job? Would this be the time to move to the LCOLA you were talking about? I wish, but no. Not unless it took us three or four years to conceive. We won't be ready to move to the LCOLA until my career is in a very different place and we have enough saved, not only for the move but also for our down payment. I'm looking to change departments here at my current job. If that works out, I'm totally cool with staying at this employer until we're ready to move. However, I know WiBeth was in a similar situation, and her dad had some health problems that left them unable to serve as childcare providers - so you may want to have a plan B built into your budget, lest you end up like Doxie Good Lord, no. We'll have a line item in the budget for market daycare every month in case we need it. If we don't, then Mom will get a nice little year-end bonus ;D
|
|
telephus44
Well-Known Member
Joined: Dec 23, 2010 10:20:21 GMT -5
Posts: 1,259
|
Post by telephus44 on Jul 11, 2011 12:20:17 GMT -5
When planning a budget for going from 2 incomes to 1 income, remember that your taxes will be reduced, should be quite a bit. Plus hopefully you will have a nice new "deduction" Depending on how you currently have your withholding set up, when you go to one working, you can adjust your withholding so that the one paycheck is larger (due to less taxes). You should be able to find an online estimator for this. I wonder if this factor could change the picture enough that DF could be a stay at home dad for awhile? Thoughts? Because that's pretty much our ideal situation in many ways, and it's a lot less of a hit to a man's career to raise babies for a few years than it is to a woman's. [/quote] It's possible. The tax savings obviously won't cover his entire take home, but it will make a dent. At your current combined income you'll probably be unable to take the entire child tax credit, but the added deduction will make a difference. It would at least be worth running it through an online calculator.
|
|
NomoreDramaQ1015
Community Leader
Joined: Dec 20, 2010 14:26:32 GMT -5
Posts: 47,323
|
Post by NomoreDramaQ1015 on Jul 11, 2011 12:23:01 GMT -5
It actually didn't occur to me that my leave would be covered, but who knows?
I had to use vacation/sick time up to 250 hours (8 weeks) and then I could take the remaining four unpaid.
FMLA only runs for 12 weeks, after that point I could petition for more time off but it was up to the discretion of my employer if he wanted to allow me that AND keep my job open.
|
|
Firebird
Senior Associate
Joined: Dec 29, 2010 12:55:06 GMT -5
Posts: 12,448
|
Post by Firebird on Jul 11, 2011 12:28:43 GMT -5
It's possible. The tax savings obviously won't cover his entire take home, but it will make a dent. At your current combined income you'll probably be unable to take the entire child tax credit, but the added deduction will make a difference. It would at least be worth running it through an online calculator.
I'm thinking too about the potential daycare cost. If we paid my mom, say, $1000/month for 3 days a week (which I think is a little low), that's a huge potential cost savings. Plus, with DF home he could spend a lot more time on things like smart grocery shopping (he's really great at finding deals... when he has the time).
Plus I just think that he would like it... a lot. I would too. It would be great having a SAHS, especially since I want to work outside the home forever. But I think one or both of us needs to be earning what we currently earn together before I'll be okay with such a serious step.
|
|
Firebird
Senior Associate
Joined: Dec 29, 2010 12:55:06 GMT -5
Posts: 12,448
|
Post by Firebird on Jul 11, 2011 12:30:59 GMT -5
Check beforehand. Technically FMLA does not exceed 12 weeks. And most companies follow the FMLA guidelines.
My company is very young, so we've actually never had a pregnancy here. But, my company is pretty cool - I'm almost sure I could swing an additional twelve weeks unpaid, just based on the ethos around here. Of course, I don't know that for a fact. And unless things shift wildly over the next year or two, I'm going to want to come back to work after my maternity leave.
|
|
Firebird
Senior Associate
Joined: Dec 29, 2010 12:55:06 GMT -5
Posts: 12,448
|
Post by Firebird on Jul 11, 2011 12:32:14 GMT -5
Any recommendations on a deductions calculator?
|
|
Deleted
Joined: May 16, 2024 9:39:44 GMT -5
Posts: 0
|
Post by Deleted on Jul 11, 2011 12:32:26 GMT -5
So how do you think you would be able to take 6 month- 1 year off?
|
|
Deleted
Joined: May 16, 2024 9:39:44 GMT -5
Posts: 0
|
Post by Deleted on Jul 11, 2011 12:34:08 GMT -5
I just did the math on the 1040 and my state form myself.
|
|
Firebird
Senior Associate
Joined: Dec 29, 2010 12:55:06 GMT -5
Posts: 12,448
|
Post by Firebird on Jul 11, 2011 12:35:01 GMT -5
So how do you think you would be able to take 6 month- 1 year off?
Well, I wouldn't if DF was instead. One of us needs to be working. My thought was that we'd both see how much time we could get off in addition to the 12 weeks mandated by FMLA, and whoever was offered the better deal could stay home with the kiddo for up to a year after those first three months. The other would return to work.
|
|
midjd
Administrator
Your Money Admin
Joined: Dec 18, 2010 14:09:23 GMT -5
Posts: 17,719
|
Post by midjd on Jul 11, 2011 12:35:07 GMT -5
Make sure you have an agreed-upon budget before you go the SAHS route... DH and I had planned it out for him to quit work and go back to school for 2 years, but we've still hit some hiccups as far as the yours-mine-ours goes.
You guys seem like you're pretty much on the same page, so as long as you can solve disagreements without going the Dark-Loop route, you're probably okay - but it's still good to have something hammered out like "We each get $X per month spending money, all other purchases come out of the joint account, confer with each other on anything over $50, etc."
|
|
NomoreDramaQ1015
Community Leader
Joined: Dec 20, 2010 14:26:32 GMT -5
Posts: 47,323
|
Post by NomoreDramaQ1015 on Jul 11, 2011 12:37:58 GMT -5
DH was lucky to be able to take his vacation time (2 weeks). His company fought him tooth and nail on leave even though technically he was entitled to it. We decided it was more important for him to keep his job rather than have the leave.
Technically they could not fire him for FMLA, but what they did with a co-worker who used her full 12 weeks is they carefully documented every little thing she did for several months and then came at her with a list of "reasons" why they were going to fire her.
I think it's great to plan in case you have the opportunity, but you won't know how your company or his is going to react until you actually are pregnant and announce it.
|
|
Firebird
Senior Associate
Joined: Dec 29, 2010 12:55:06 GMT -5
Posts: 12,448
|
Post by Firebird on Jul 11, 2011 12:38:54 GMT -5
Good point, midwesternjd. We're still hammering out things like that. We're good at agreeing to the budget, not so good when it comes to sticking to it ;D I think we need to be at least 200% better at that part before going the SAHS route. Honestly, though, I really think we'd save a boatload of money with one of us home.
|
|
Deleted
Joined: May 16, 2024 9:39:44 GMT -5
Posts: 0
|
Post by Deleted on Jul 11, 2011 12:41:28 GMT -5
So how do you think you would be able to take 6 month- 1 year off? Well, I wouldn't if DF was instead. One of us needs to be working. My thought was that we'd both see how much time we could get off in addition to the 12 weeks mandated by FMLA, and whoever was offered the better deal could stay home with the kiddo for up to a year after those first three months. The other would return to work. Well you could do a couple weeks before the birth, you, the remaining 6-10 weeks you, then you DF for 12 weeks. That would give you 4.5-5.5 months off and then maybe your companies would be willing to give you a few more weeks off over time.
|
|