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Stay at Home Moms
For those of you SAHMs that stretch to make ends meet...
I am currently a working mom considering leaving work to SAH. I was just wondering, for those of you SAHMs that have to stretch to survive on one salary, do you still save any money (i.e. 401K, etc.)? I guess this is the one concern I have. I know that we could make ends meet on my DH's salary alone, however we have always been very focused on saving and I am not sure how much we would be saving without my salary. Any info. you are willing to share would be appreciated!
TIA
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Re: For those of you SAHMs that stretch to make ends meet...
DH is contributing to his 401k, and we are able to put a small amount into our savings account each month. But then sometimes we have to take some back out....some months are better than others.
I don't plan on being unemployed forever, because we do want more financially then we have right now. So I think of this as just taking some time off and we don't intend on trying to save a lot right now. We'll get back on track next year when I go back to work.
I worked for 3 years before becoming a SAHM & started a 401K, etc. Now we barely are able to save, though DH makes below average & is considered "self employed" so we pay taxes quarterly. That said, anything we save goes to paying those taxes, thankfully we don't have to pay a mortgage or rent either, that would kill us! I don't plan on being a SAHM forever. I'm thinking about going back part time in the spring & work a year or so before having a second child.
We have our bank make an automatic deduction every month from checking to savings. Sometimes, we can put even more into savings. Sometimes not. I have not contributed to my IRA since becoming a SAHM, but DH contributes monthly to his retirement.
I think 401K and savings should always be in one's budget. One thing were doing is paying off ALL bills.
You may also have to make some sacrifices. For example, my car and DH's car are both 10 years old and paid for.
this is the reason I am still working PT. I ran the numbers over and over and over again, and I was not able to figure out how to do it all. I worked FT for the first 2 years of DD's life, and we worked in that time on paying off cars and socking away some money in savings, etc. This past summer, I quit my old job and started working PT for a friend of mine. If we didn't have life insurance and weren't putting money away in savings and putting money in DD's 529 and putting money into my retirement, we'd be able to make up the money in my PT salary, but we just don't think that is very smart of us. We feel like THAT would be living on the edge, you know?
DH is getting to a point salary wise where we could do it all on his salary now that he is moving jobs, but this situation works well for all of us -me working 2 days a week and DD in a center/school while DH works FT AND goes to school PT. I'd probably feel differently if DH was home more.
And, again, we don't think putting off savings and retirement savings and what not is the type of cuts we are willing to do.
We're continuing to save a lot. DH puts 6% (I think) into his 401k and we each have an IRA. Last year, we maxed out our contributions to both of them, thanks to his work bonus and our tax refund.
Before I quit work, we paid off all our bills so that we could start paying for things as we had money. In the year before I quit, we paid off two new cars, a home equity loan, and one of my student loans. Unfortunately, we still have my stafford loans and the mortgage, but they're both tax-deductible, which helps come tax-time. And, the rate on my stafford loans is something like 2%, so it's less than inflation even in a good economy and makes it almost pointless to try to pay it off early.
The biggest cuts to our budget have come easily- I make DH a lunch to take to work, DD and I stay home or go to free library storytimes and things (no classes we have to pay for), and I try to walk or ride a bike as many places as possible to save gas money. We cancelled satellite TV and just have an antenna for local channels. We joined Sam's club for non-perishable groceries and things we can freeze, like meat, and I buy very few packaged foods (usually just cereal and plain pasta) because they're more expensive per serving. We also buy a lot for DD secondhand and at rummage sales. We've cut back to eating out just on special ocassions. Our only real splurges these days are on high-speed internet and our cell phones because I work from home 10 hours a week and need the broadband for that and DH travels for work about 1 week a month and we have free mobile-to-mobile calls.
Sometimes I feel like a loser because we don't have the nicest clothes and toys, and DD and I don't go to all the playgroups at the bounce-house place up the road or out to lunch with the other moms after the library group. But I feel like I'm teaching her that experiences and family are more important than things and trying to impress others.
I work part time (15-20hr/wk), so I still contribute to a 401k and so does DH. He puts in 10% and I put in 20% (because I earn so much less, so he still puts in more $ than I do). We also put money in a college account for SS, but not for DD yet.
My paycheck goes straight to general savings (we're not saving for anything in particular). Most months we end up taking some of it out to cover extras, so it's not growing a whole lot, but it gives us some padding.
When we looked at the numbers before DD was born, we thought we'd be about $200 short each month. I think we are doing better than that on a regular basis. Now my job is more for extras that we'd just skip if I wasn't working at all.