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August 2019 Moms
WinchesterGirl
member
Budgeting and Babies, April
WinchesterGirl
member
Babies cost money. But it can be a lot, or a lot less! What is your strategy for handling the changes a baby brings to your financial life? Personal finance is just that, personal! Every family approaches things in their own way and has their own means. Let's keep this thread positive and a safe space to discuss finances to support the new baby.
This will be a monthly thread to talk babies & finance/budgeting.
Special for April: Free for all! Bring up any money topic/question you'd like. Baby related, retirement related, articles you'd like to discuss. Or just, you know, any burning finance question that you have. Bring it!
This will be a monthly thread to talk babies & finance/budgeting.
Special for April: Free for all! Bring up any money topic/question you'd like. Baby related, retirement related, articles you'd like to discuss. Or just, you know, any burning finance question that you have. Bring it!
Rainbow baby Dean is due 2/17/17!
Re: Budgeting and Babies, April
CapitalOne joint checking - this gets my paycheck every month minus $2,000. Is used to autopay most bills.
SECU joint checking - we can have this because as a grad student at a state university DH is technically a state employee. It earns about a half a percent a month. It gets DH's paycheck, plus $1,000 of mine. It is used to pay our car loan, and childcare costs.
Discover joint saving account - This is amazing, I recommend it to everyone. It gets 2% a year. We put in $1,000 a month from my paycheck.
3 investment accounts - (1) a 401(k) from my employer, I put in 3% a paycheck (2) an investment account that was started for me when I was very little with some money I inherited from a great-grandmother. (3) an investment account that was started for DH by his grandparents when he was born as a birth gift. These three accounts are our rainy day funds, and we never touch them. They are also the only assets that we did not combine when we got married.
2 cars - one was a wedding gift from my parents, the other we bought almost 2 years ago, our loan is through SECU which means we got an amazing rate. We pay $500 a month on it, which is more than the minimum payment, but we really want to pay it off as soon as we can.
1 mortgage - every time I complain that the interest payments are more than 50% of our monthly payment, DH reminds me that's how mortgages work.
Also, DH and I finally did our 2018 year in review, and it turns out that the amount we put in saving for 2018, equals the amount that our childcare costs will increase, that so that makes me a little nervous...
My work is amazing, and gives us a raise every year in July. They say that it is performance based, but will at least cover the cost of inflation. So I know that there will be that little extra.
We operate out of 1 main joint checking, but use YNAB to track finances and it allows us to have categories so that even though our money is in one pile, it is broken up into jobs.
Our plan is to eventually move it all to SECU, and close the CapitalOne account, once we do that we will take more advantage of the mobile deposit option, and be more careful about making sure we have enough cash for emergencies (there is an ATM right near DH's building on campus). But we are taking our time phasing it out because we spent money on checks, and we want to use them all up... We will probably give up on that as we write like 2-3 a month, and still have at least 2 books left...
Our main checking account is with our local bank. The majority of our paychecks go there.
Other accounts we have are:
- Another checking account with the local bank that we use strictly for reimbursements (both DH and I travel for work from time to time and until the money is routed out, it can be annoying)
- A CapitalOne Savings account that houses our emergency fund (which, for the past 4 years that we've owned a home, is ALWAYS depleted by the end of the year, which drives me crazy. This year we actually had emergencies - our water heater busted and flooded our basement and we had to replace it AND the furnace. But in other years it has been more of a "oops! we're over budget this month!" and I'd really like to break us of that habit/mindset)
- An American Express Savings Account (2.1%!) that is our vacation fund. DH and I are planning a second honeymoon for our 10 year anniversary in 2 years and we automatically put in $200 a month from our paychecks.
Savings wise we have:
- My 401k (currently 5% of salary) and DH's (8% of salary).
- 2 529s, soon to be 3. We put $100/month each 529. My dad often gives them a check for baptisms, birthdays, etc as well. Never look at a 529 calculator, though, because it will terrify you about the cost of college.
- My former 401ks rolled into a rollover IRA which is a more balance portfolio and an old 403b that I can't touch until I'm 55
- A traditional IRA and a few CDs to help out IRA money that can't grow much anyway
Debt wise we have:
- A mortgage
- DH's massive student loans (we are trying to pay off as fast as we humanly can, which eats into our take home pay pretty significantly)
- Car payments (I pay $650/month for mine, which is above the agreed terms because I am trying to pay it off ASAP and DH pays $250 for his because *FFC* my dad paid cash for it so we wouldn't have to have a loan and we are paying him back interest free and we are taking our SWEET TIME).
- I only have 2 credit cards and ideally I would only have one. Ideally I always pay in full, I think I have only not a handful of times in my long credit history.
Other expenses:
- I carry our insurance for the family - for now my company's insurance is pretty good. Talk to me after I've had my c-section though.
- We will be sending DD1 to a parochial school, so we have been "modern tithing" for the last 4 years. The issue is that we will still be hit up for school fundraising but will still need to give to the church during this time, so I've been working on a giving budget for 2020.
- Childcare costs are about to get CRAZY up in here. In 2020, we will pay $4,500 a month between daycare and aftercare and tuition. Yes. I'm going to be working for the rest of my life.
My "side hustles":
I've really started to try to get cash back or sell things more frequently. It's not in my nature, but this year I've already consigned a lot of the girl's outgrown clothes to Bagsy, have made a lot with Ebates, and have been trying to utilize Ibotta. My goal is to get $150 from these ventures this year, and steadily go up each year.
My spending weaknesses:
- https://www.smockedauctions.com/
- https://www.hannaandersson.com/
On life insurance we each each have a plan. Mine is fairly small and basically is enough for DH to take a year off and then hire a full time nanny and house keeper to do all the things I normally do (makes my life sound so glamorous huh?!). He’s the breadwinner so he has a better policy than I do. We also have a separate long term disability plan in case he couldn’t work anymore beyond what he gets from his employer. The younger you buy life insurance though the better your rate since you are likely more healthy and will have longer to contribute.
@peachy0709 Does your DH have a Roth option?
@heml @peachy0709 As far as 529s and Life insurance, we don't do either of those yet. (I do get life insurance through work, but I have no idea what it pays out.) DH technically is working part-time, but he picked the job because it helps further his research area, and not because of any monetary considerations. So there isn't a ton of extra room in our budget. My FIL opened an account for both my boys, and puts money in regularly, but I don't know if that a 529 or a savings (I only know about it because he asked for their SS#). Once we're officially a two income household we will look into all those things.
@heml we put in a decent amount each month into each kids 529 and plan to up the amount monthly when they hit 10 and then 15. Our goal is to have enough for each kid to cover out of state or private tuition should that be the route they choose and if there is extra they can apply it to grad school or simply pay the tax on it to use it for approved non education purposes post graduation such as a car or down payment on a home. We figure since all of the interest can grow and compound tax free for 18 years even if they do have to pay taxes on it down the road it’s a worth while savings account for them.
For 20 year policies, it was $440 and $580 for me and him respectively. Which, I mean, I guess that's ok? They give us good rates on homeowner policies.
I am thinking I need to ask for 25 year term, just because if we decide on another LO down the road I'd like them to be over 18 before the policy expires.