Case Study: One-Income Family of 3 Looking to Save More

[Sweetpotatofries]

Life Situation: We're two mid-20s professionals living in a close-in suburb of NYC. Expecting our first child in April 2017. Wife plans to leave work to stay home once our child is born. We're interested in figuring out how to maximize savings when we start living off one income, which for this year for Husband is $190k (it will increase to $210k next year - salary scale at his job goes up lock-step for first 5 years). Also looking at potential timeline to FIRE which we know we're pushing out by becoming a one income family now, but we value having our family and having a SAHP.

Monthly salary: $15,833
Pretax health insurance: $900 (middle deductible family plan for 3+; no HSA option)
401k contribution: $1500 to max
Spousal IRA contribution: $540
Pretax commuter costs: $255 (of $420 monthly)

Taxable income: $12,638       

Federal tax   $2,108
State/City tax   $869.25
Soc. Sec.   $576.45
Medicare   $212.83
Self-employment Tax   $0
Total income taxes   $3,766

After-tax income: $9,127

Assets: Condo purchased January 2017 for $530,000; principal paid $106,000 mortgage balance of $424,000, interest rate 3.625%.
Savings account: $35,000 in liquid account
Vanguard brokerage: $50,000 mostly in VTSAX
Roth IRA for wife: $17,000
401k for wife: $40,000
401k for husband: $16,000 (this will grow a lot)
Plan to contribute to spousal IRA for wife

Liabilities other than mortgage: H's outstanding student loan balance of $9k at 5% interest

Monthly expenses:

Mortgage P&I   3058
Property Tax   450
Home Maintenance   500
Home Insurance   70
HOA Fees   521
Life Insurance   200
Metro North Pass   300
Subway Pass   120
Car insurance   100
Gas   80
Electric   100
Internet   40
Netflix   10
Amazon Prime   9
2 Cell Phones   75
Grocery   700
General Medical OOP   200
Baby - Medical   200
Baby - Supplies   200
Disposable Diapers   40
Stroller Strides ($16/x)   80
A+B Clothing   50
Laundry   15
Dry Cleaning   40
Vitamins   15
Toiletries   20
Hair/nails   20
Wedding/gifts   100
Race fees   30
Student Loan   400
restaurants   120
Entertainment   25
Vacation   200
Total: $8,088


Obviously we have a lot we could cut in this projected budget. We hate to look at the numbers and see post-tax savings to invest of only $1000/month on what seems to us like a huge salary even just with one person working. We're so used to an extra 2/3 of that amount going straight to savings every month. I think we need some *gentle* facepunching as to where we can make cuts. Here's what we know...

- Grocery is big one, the figure includes spending on paper goods (towels/TP) and cleaning supplies but once I'm home with the baby I'm sure I could spend a little time making our own. We are both big eaters (I run 25-30 miles a week pre-baby and hope to continue with baby, got the jogging stroller in an eBay deal, and H runs a few times a week as well as lifting). I also have Celiacs, and both of us love fancy cheese, grass fed dairy, and giant portions of fresh fruit, veggies, and dark chocolate. But somehow MMM and his family seem to eat similarly while doing a lot of shopping at Costco like we plan to, and I don't think NYC suburb COL has everything to do with it.

- Baby costs are total estimates. Everyone keeps telling us babies cost a TON. But they're so little and I hope we can exclusively BF for the first 6 months, and try baby led weaning thereafter. I can see spending a little on activities - storytime at the library is free, and so is the playground, but so many of the exercise with baby groups in our area charge $15-20 per session and I want to be able to meet other moms. We also don't know what medical is going to look like for baby. Our premiums for health insurance are super high in exchange for a low-ish deductible but if we ever have to go out of network for anything it's completely OOP.

- We can cut out vacations per se, but gifts and "vacations" for other people's weddings are a big expense. Not every month but we have 6-8 wedding invitations for summer 2017 already (!) almost all people who attended ours/sent gifts. Even if we politely decline the destination weddings (more than 2 hours' drive from our house) we still have to send gifts to our friends, and the common amount seems to be $100 per couple if you DON'T attend and $200 if you do, plus cost of getting there and back - at least at this point, taking baby along saves on childcare costs!

- We have no childcare budget right now because wife is going to stay home, but at some point we might need a babysitter for a night who isn't grandma (luckily grandma lives a half hour away but grandma has a life!

[john6221]

How does a $500k condo require $500/mo in maintenance?

Also, your life insurance is way too high for someone so young. Unless you're high risk?

And $200 for a wedding gift? You have spendy-pants friends.


Sent from my XT1575 using Tapatalk

[galliver]

What sticks out at me is that Housing+Transportation is 62% of your spending (56% of take-home). With housing alone being over 55% of spending (50% of take-home).

[bugbaby]

What's the $200 baby supplies?

Sent from my Nexus 5 using Tapatalk

[Fire2025]

I just wanted to share this link regarding Frugal Baby stuff:

http://www.frugalwoods.com/2015/07/24/fighting-back-against-the-baby-industrial-complex/

Also I really like this blog in general.

They maybe to extreme for you, right now, but they are inspiring.

[Tuskalusa]

Looks like you're in pretty good shape.

I noticed that the home maintenance budget is $500/month. This seems high in a condo with a pretty high HOA fee. Are you planning specific upgrades, or could this possibly be reduced?

Looking forward to learning what you find. We are also a 3-person family that recently moved to one income.

[mxt0133]

We are a family of 5 in San Francisco, single income, gross about 165K, and our expenses last year was about $5K a month.  We rent a one bedroom that is rent control but we spend way to much on food and eating out.  We do a yearly month long trip to see family, one big family vacation, and lots of weekend get aways. We pay for a bunch of kid activities, sports, museums, classes, ect. So we are by no means hardcore mustachians. But we were still able to save about $50K IIRC, it took us a while to get there after going down to one income and really identifying what is important to us. 

In time you too will find what is really important and adjust your spending accordingly.  For us having kids actually improved our savings rate even after going down to one income, we were burning so much on going out, gifts, trips, shopping.  But after a while, all our friends got married, attend less b-day/events parties not to save on gifts but to actually have time on weekends to relax, run out of room in the house for junk, and learned how to decouple spending money with having a good time.

Your effective tax rates will go way down once you get to one income, add a dependent, and contribute to the wife's deductible spousal traditional IRA.

Take some cash and pay of the student loan for a guaranteed 5% return and improve your cash flow by $400 a month.

Your housing is costing you $4500 a month, but part of that is principal payment which should be considered savings.

Redo the math and you should still be ahead of most people.  Congratulations on the baby!

[Morning Glory]

Congrats on the baby. My suggestions: take 9k from savings and pay off the student loan, then redirect the 400/ month into taxable investments. There is no reason to have 35k sitting in a savings account.

Disposable diapers do not cost $100/month. Target's prices are better than Amazon or Costco if you catch a sale. Wait until Target has a good sale (e.g. $20 gift card when you buy 2 boxes), then go there and stock up. Print some coupons from their website, and use the cartwheel app. It is worth the time if you are doing a large purchase. You can store them under the crib. I use Pampers at night (DS sleeps 12 hours plus) but store brand is fine during the day. Do not pay extra for cute patterns, they will get pooped in and thrown away.

Sign up for formula samples even if you plan to breastfeed. It is easy to donate them if you don't use them. Not so easy to run to the store in a panic for formula. Plus it is expensive.

If you spend that much on weddings for your friends they will probably throw you a huge baby shower. Register for practical items. You will probably not need to buy any baby clothing the first year.

I agree that your life insurance and home maintenance costs seem high. Might I suggest that instead of life insurance on DH, you put the money into learning or maintaining a skill so that you can provide for yourself an LO if anything happens to him.

You also might be able to go cheaper on the mobiles with Republic wireless.

Good luck to you

[researcher1]

Your monthly expenses don't look too bad overall.  However, here are a few things that jump out at me...

Housing costs - $4600
This is a huge portion of your budget.  Way too high in my opinion.  However, you can't do much about these costs at this point, except for the $500 "maintenance" line item.  For a condo, this should be cut to maybe $100.

Transportation costs - $600
This is a lot of money spent on transportation, and doesn't even include a car payment.  I assume you'll need to replace your current car at some point, so you should have a "car replacement" line item to pay for it, which would push these costs even higher.

Baby Stuff - $300
You won't need to spend nearly this much on supplies & diapers.  Tip:  Buy the large boxes of Target brand diapers, particularly when they are on sale.

Vacation & Entertainment - $225
This actually seems LOW to me, especially for your income.  We spend considerably more than this, although our other expenses are much lower.  I guess it depends on where your priorities lie.  For example, you spend nearly $200/mo on stroller strides/yoga/race fees, which you may get more enjoyment out of than vacations or other entertainment.  Personally, I think it is insane to spend $80/mo for the privilege of pushing a stroller around with other moms.

[yachi]

Your effective tax rates will go way down once you get to one income, add a dependent, and contribute to the wife's deductible spousal traditional IRA.

I'm in a 1 income household too.  I didn't realize there was a different income limit for IRA deductability because of my wife not having access to a 401(k).  This is interesting.  I just assumed since I had access to the 401(K), the phaseout started at $98,000, but the phase out starts at $184,000 for a spousal traditional IRA.

OP: Definitely take a close look at insurance and realistic future needs.  Check what you get in Social Security 'benefits for spouse raising my child'.  I have a little less than half of what I need to be FI, but I was surprised that I no longer need insurance on myself because 'benefits for spouse raising my child' covers over half of our spending.  Since housing is such a large part of your expenses, look at mortgage payoff insurance through your bank.  I don't carry it, but I understand the rates are low.

Also, You're accounting for the commuting expenses twice (it's subtracted from income to get your taxable income, then added to the expenses)

[Gimesalot]

Here are some thoughts:

Monthly expenses:
Home Maintenance   500    Is this for a cleaning service?  Are you purchasing new furniture? 
Home Insurance   70    Is this for contents insurance?  Do you need additional insurance?
HOA Fees   521    What does this pay for?  Usually a pool or gym or other amenities are included when the fee is so high
Life Insurance   200   I agree with other posters that this is too high?  Can your spouse get this for free or cheaper through work?
Electric   100   This seems really high for a condo?
Internet   40    Have you considered splitting with a neighbor?
Grocery   700   Fruits and veggies should be cheap.  Are you buying a lot of processed or "natural" foods?
Stroller Strides ($16/x)   80  Can you go to less classes in a month?  Maybe once you meet a few moms you can replicate the workouts in a park...
Yoga ($20/class)   80     There are a ton of great yoga workouts on the internet for free or cheap.  I love doyogawithme.com
A+B Clothing   100    This seems like a lot for clothes especially when you'll have time to shop for deals
Laundry   15     Are you paying to have your laundry done for you?
Dry Cleaning   20   Change to dryell or hand washing to cut this expense 
Hair/nails   30   You can learn to cut and color hair and do nails and skip this expense
Race fees   30     Will this really stay the same if you have a new born child at home?
restaurants   120   start making frozen crock pot or plate meals now so that when the baby gets here, you'll have a stash of quick, easy, nutritious food

[Sweetpotatofries]

Your monthly expenses don't look too bad overall.  However, here are a few things that jump out at me...

Housing costs - $4600
This is a huge portion of your budget.  Way too high in my opinion.  However, you can't do much about these costs at this point, except for the $500 "maintenance" line item.  For a condo, this should be cut to maybe $100.

Transportation costs - $600
This is a lot of money spent on transportation, and doesn't even include a car payment.  I assume you'll need to replace your current car at some point, so you should have a "car replacement" line item to pay for it, which would push these costs even higher.

Baby Stuff - $300
You won't need to spend nearly this much on supplies & diapers.  Tip:  Buy the large boxes of Target brand diapers, particularly when they are on sale.

Vacation & Entertainment - $225
This actually seems LOW to me, especially for your income.  We spend considerably more than this, although our other expenses are much lower.  I guess it depends on where your priorities lie.  For example, you spend nearly $200/mo on stroller strides/yoga/race fees, which you may get more enjoyment out of than vacations or other entertainment.  Personally, I think it is insane to spend $80/mo for the privilege of pushing a stroller around with other moms.

Housing costs are indeed a huge part of our budget - we chose a 15 year mortgage to get the lower interest rate and pay much more to principal than interest right off the bat. We have only been living here for a month so the home maintenance costs are an estimate and we've read the rule of thumb is 1% of the sales price of your house per year? We don't anticipate much monthly spending but when we moved in we had to do a bunch of things and we have to purchase a washer-dryer because the sellers didn't include theirs in the sale.

Transportation costs - a monthly commuter rail pass costs $300 and monthly subway pass is $120. Husband needs these to go to and from work (he walks to the train from our house less than 1/4 mile away, chosen to minimize commute). These unfortunately aren't negotiable and NYC may even raise the subway pass cost this year again! I try to drive minimally (only for grocery shopping and doctor appointments) and plan to do most activities/walks with the baby in walking distance. We chose our condo since it is walkable to a lot including even baby's future pediatrician and preschool/elementary school.

Travel/entertainment - we plan to take one vacation per year and that's pretty much cost averaged over the months, and then maybe an occasional museum trip or some such (our life will look a lot different with baby). We included travel costs to/from weddings in the wedding budget instead.

Exercise - 1x a week yoga and 1x a week Stroller Strides are things I anticipate doing post baby just to be able to get out and meet other SAHMs with similar interests. I currently do yoga 1x week and run on my own 4x per week and running is a huge part of my life that I know is going to look different after baby. There just don't seem to be a lot of spontaneous/free mom and baby workout groups in our area - my hope is that by going to Stroller Strides or Mommy and Me yoga for a few months I would meet people who might want to continue working out together with babies independently? But I think the big advantage of something like SS is that there's someone watching all the strollers even if you go run a lap around the park...no childcare if I wanted to go for a run when husband is at work!

Here are some thoughts:

Monthly expenses:
Home Maintenance   500    Is this for a cleaning service?  Are you purchasing new furniture? 
We just moved in last month so it's an estimate based on the 1% of purchase price "rule" - also we needed to fix some plumbing (Husband did some of it but we needed a plumber for a few things) and purchase appliances that didn't come with the condo. Not recurring next year though.
Home Insurance   70    Is this for contents insurance?  Do you need additional insurance?
It's the contents insurance required by the bank that gave us our mortgage.
HOA Fees   521    What does this pay for?  Usually a pool or gym or other amenities are included when the fee is so high
No pool or gym. It includes trash/recycling pickup which you normally pay for and snow removal.
Life Insurance   200   I agree with other posters that this is too high?  Can your spouse get this for free or cheaper through work?
It's high, because husband insists on having a policy that covers me and future LO(s) if something happened to him - but also because we have a policy on me too, only for about 1/3 the amount of his, but I also have a graduate degree and we took out the policies with me still working.
Electric   100   This seems really high for a condo?
Internet   40    Have you considered splitting with a neighbor?
Not an option since it's a very tiny condo complex home to people not in the habit of splitting things (unfortunately!)
Grocery   700   Fruits and veggies should be cheap.  Are you buying a lot of processed or "natural" foods?
Not a lot of processed foods at all. But we do eat a lot of cheese. More than necessary. And a lot of high quality wild caught seafood, as well as organic chicken and pork. And ice cream. I don't buy much GF packaged food but I do buy flour to bake my own.
Stroller Strides ($16/x)   80  Can you go to less classes in a month?  Maybe once you meet a few moms you can replicate the workouts in a park...
Kind of my thinking, but since it hasn't happened yet I have no idea. Outlined this above.
Yoga ($20/class)   80     There are a ton of great yoga workouts on the internet for free or cheap.  I love doyogawithme.com
This is currently for prenatal yoga (I've had some pain issues that make it really valuable to have a certified instructor watching, and also have met some other moms to be) and would be for mommy+me type yoga - again to socialize and meet other moms.
A+B Clothing   100    This seems like a lot for clothes especially when you'll have time to shop for deals
Includes 2 new pairs of running sneakers each per year, but I doubt we normally spend this much, I think it's been the maternity stuff and H having to replace cold weather gear.
Laundry   15     Are you paying to have your laundry done for you?
No - estimating based on cost of detergent. It was way higher when we were renting, $6 total per load in washer/dryer in our building!
Dry Cleaning   20   Change to dryell or hand washing to cut this expense 
Hair/nails   30   You can learn to cut and color hair and do nails and skip this expense
We don't get haircuts, this is 1x a month pedicure. But can definitely cut this back to every 3-4 months instead. Mostly get them due to running feet.
Race fees   30     Will this really stay the same if you have a new born child at home?
I'd still like to run a couple half marathons or other races each year and the per-race fee for that distance is more like $50-$60 in the NYC area even for local charity races and Turkey Trots - it's averaged out monthly.
restaurants   120   start making frozen crock pot or plate meals now so that when the baby gets here, you'll have a stash of quick, easy, nutritious food
This is the cost of 2 meals out per month plus any after home dinner ice cream out (we do that a lot and can cut back) and anytime husband forgets his lunch and has to buy during workday. Date night out at a burger place for the two of us ($40), or brunch at a diner with friends for our share ($25), is all it ever is. Better than NYC prices but I know it seems high. And I think husband will want date night to continue to be going out to eat if only to keep the tradition alive after baby. Maybe I can talk him into picnics instead!

Hoping this helps explain. I see that being locked into our housing cost and commute costs (via public transport) is a huge thing  but am hoping being willing to make cuts elsewhere can still help with savings.

[Sweetpotatofries]

Congrats on the baby. My suggestions: take 9k from savings and pay off the student loan, then redirect the 400/ month into taxable investments. There is no reason to have 35k sitting in a savings account.

Disposable diapers do not cost $100/month. Target's prices are better than Amazon or Costco if you catch a sale. Wait until Target has a good sale (e.g. $20 gift card when you buy 2 boxes), then go there and stock up. Print some coupons from their website, and use the cartwheel app. It is worth the time if you are doing a large purchase. You can store them under the crib. I use Pampers at night (DS sleeps 12 hours plus) but store brand is fine during the day. Do not pay extra for cute patterns, they will get pooped in and thrown away.

Sign up for formula samples even if you plan to breastfeed. It is easy to donate them if you don't use them. Not so easy to run to the store in a panic for formula. Plus it is expensive.

If you spend that much on weddings for your friends they will probably throw you a huge baby shower. Register for practical items. You will probably not need to buy any baby clothing the first year.

I agree that your life insurance and home maintenance costs seem high. Might I suggest that instead of life insurance on DH, you put the money into learning or maintaining a skill so that you can provide for yourself an LO if anything happens to him.

You also might be able to go cheaper on the mobiles with Republic wireless.

Good luck to you

We're planning to pay off the student loan once baby is born - we just didn't want some kind of huge out of nowhere hospital expense to show up and not have a liquid emergency fund for living expenses plus any kind of bill like that.

Thanks for the diaper advice. I read a lot that said Amazon Mom was the best price on Pampers Swaddlers because of the 20% off via Subscribe and Save - but we have some target gift cards so will be keeping an eye on target!

We just had our baby shower this weekend. I registered for all the big ticket necessities (insurance gives you the electric pump, but the bottles/sterilizer/storage was on there, as was a manual pump, and diapers, diaper cream, changing pad, cloth diapers to use as burp cloths, swaddles, etc). Received almost none of it although some went in on the crib, and we had already purchased a pack n play and changing table secondhand from a swap group. Friends bought all the cute little outfits they could lay hands on instead from mid to upscale name brands, and also books (which are much appreciated). So whoever said we won't need clothes for a year is probably right! We do have about $300 of goods on the registry we plan to purchase using the 15% discount on Amazon.

As for life insurance - I have a professional graduate degree myself and could put it back to use if something happens to H, already. I plan to try and do a little side work (~5 hours a week to start with?) just to keep my skills current, if I possibly can. H's theory is we want enough in life insurance to pay off the condo and cover childcare costs if something happened.

[davef]

Congrats on the Baby!!
We had ours last year. 8 months ago today as a matter of fact!
The budget looks pretty good, yes there is room for some trimming, but not a whole lot unless you are willing to sacrifice quality of life.

I agree with the poster that said take 9k out of savings and pay off the school loans. Unless you your husbands job is in Jeprody or his work is intermittent or commissioned. That is too much for cash emergency fund just sitting there. you need at least one month expenses in liquid savings, and at least 6 months in accessible investments. your VTSAX counts for that, you could always tap into that money if your husband lost his job.

I also agree that diapers and wipes combined shouldn't be $100/month. We went though 8-10 diapers a day initially but after a couple months we are now doing 5-6. I think we are in the ballpark of $40 per month. A box of the costco 900 wipes lasted us about 5 months. We are half way through our second box now.

My wife found a ton of free or cheap baby things on facebook from moms with kids that were outgrowing them, toys, cloths books, etc. But a Nice Car seat. Dont skimp there.

Dont for get to change the number of dependents on your husbands W-4 at work. Now that you have a dependent you will have a annual write off of 4k or 5k. I'm not sure which income category you fall into. You make too much to get the child tax credits.

As others said when computing your savings you also have to add in your monthly principle.

[Sweetpotatofries]

Congrats on the Baby!!
We had ours last year. 8 months ago today as a matter of fact!
The budget looks pretty good, yes there is room for some trimming, but not a whole lot unless you are willing to sacrifice quality of life.

I agree with the poster that said take 9k out of savings and pay off the school loans. Unless you your husbands job is in Jeprody or his work is intermittent or commissioned. That is too much for cash emergency fund just sitting there. you need at least one month expenses in liquid savings, and at least 6 months in accessible investments. your VTSAX counts for that, you could always tap into that money if your husband lost his job.

I also agree that diapers and wipes combined shouldn't be $100/month. We went though 8-10 diapers a day initially but after a couple months we are now doing 5-6. I think we are in the ballpark of $40 per month. A box of the costco 900 wipes lasted us about 5 months. We are half way through our second box now.

My wife found a ton of free or cheap baby things on facebook from moms with kids that were outgrowing them, toys, cloths books, etc. But a Nice Car seat. Dont skimp there.

Dont for get to change the number of dependents on your husbands W-4 at work. Now that you have a dependent you will have a annual write off of 4k or 5k. I'm not sure which income category you fall into. You make too much to get the child tax credits.

As others said when computing your savings you also have to add in your monthly principle.

I'm definitely thinking the diaper cost estimate was too high. I was going off what I see in articles as babies use 8-10x day, and the price for boxes with 20% off on Amazon Mom. We will definitely use the Costco wipes.

Student loan will get paid off come late April hopefully - other than the "hospital bill risk" apparently you need to notify the company prior to paying off or you face a (small, but still matters) prepayment penalty. We notified them the 6 months in advance in the fall so we can pay it off in April.

We've been thinking about converting more liquid savings to the Vanguard account since it's just sitting there with 1% interest (if you can believe most of our house downpayment was sitting in that account for 2+ years...) but how much is safe to have illiquid in a mostly-stock brokerage account? We tend to be a little (okay, a lot) risk averse.

All the suggestions here are helpful although it does make me think cuts would be in the "little luxuries" area like running/group fitness with baby that are really important to us. At least we know we can spend less on baby's supplies than we thought! I don't know how those calculators on BabyCenter and such work, that's where we got most numbers from (estimates of what they cost the first year, that kind of thing).

[ShoulderThingThatGoesUp]

Newborns use a lot of diapers, but this slows way down. We have sux-week old twins and the shaft parade has slowed down substantially.

[galliver]

This is absolutely a drop in the bucket, but according to the MTA website, the monthly pass for subway is only cost-effective for 48+ rides; if your husband only really commutes to work (21 days->42 rides) paying per-ride would be 2.48*2*21 = 104.16 (You get an 11% bonus if you load cash on a card, which takes the effective fare down to 2.48 from 2.75.) I mention this not because you seem to desperately need $15 but because it's part of an optimization mindset...like "am I really getting what I'm paying for; can I get the same for cheaper?"

Have you heard of or used meetup.com? How good it is depends on the area some, but if you haven't checked it for free moms' groups, you should. And if there aren't any, maybe you could start one :)

Also, I would totally count at least ~1k/mo of your housing costs as savings/investment...not just because it's going into equity but also since that's basically an extra principal payment over a 30y mortgage. It's like, you could be paying that much less for housing, which would bring your cost to a more reasonable 1/3 of income, but you choose to pay extra on it (and also get a break on the interest rate, which is a benefit). Between the $1k surplus you already have, that $1k going into equity, $2k into retirement funds, and hopefully less spent on maintenance and baby stuff, your situation starts to look a lot better than you laid out. Your big splurges seem to be the sports/socializing, and maybe cheese...which isn't worth eliminating if it makes life worth living.

[Sweetpotatofries]

This is absolutely a drop in the bucket, but according to the MTA website, the monthly pass for subway is only cost-effective for 48+ rides; if your husband only really commutes to work (21 days->42 rides) paying per-ride would be 2.48*2*21 = 104.16 (You get an 11% bonus if you load cash on a card, which takes the effective fare down to 2.48 from 2.75.) I mention this not because you seem to desperately need $15 but because it's part of an optimization mindset...like "am I really getting what I'm paying for; can I get the same for cheaper?"

Have you heard of or used meetup.com? How good it is depends on the area some, but if you haven't checked it for free moms' groups, you should. And if there aren't any, maybe you could start one :)

Also, I would totally count at least ~1k/mo of your housing costs as savings/investment...not just because it's going into equity but also since that's basically an extra principal payment over a 30y mortgage. It's like, you could be paying that much less for housing, which would bring your cost to a more reasonable 1/3 of income, but you choose to pay extra on it (and also get a break on the interest rate, which is a benefit). Between the $1k surplus you already have, that $1k going into equity, $2k into retirement funds, and hopefully less spent on maintenance and baby stuff, your situation starts to look a lot better than you laid out. Your big splurges seem to be the sports/socializing, and maybe cheese...which isn't worth eliminating if it makes life worth living.

Hadn't thought of the daily vs. monthly MetroCard. He had the monthly almost as an autopilot thing because up until Thanksgiving we lived in NYC and so it was used on weekends too. It's a drop in the bucket, sure, but also $180/year that I'm sure he'd rather spend on something else! I think we are kind of nitpicking in our budget for those savings, because he doesn't really want to cut out the ice cream or the cheese ;)

I use Meetup for sure -- I have found a mom's group in our town and one the town over on Meetup, just more a playgroup/chit chat than working out. Which is also great, I'm open to meeting anyone! I just really do want to make sure I can stay active AND social with baby. I would definitely consider it as a lower quality of life to have those things diminished, I'd much rather have those than a bigger living space or nicer car than our current 12 year old station wagon that we bought used last year.

We live in a very HCOL and I think people are conditioned to paying for things...our 1200 square foot 2 bedroom 2 bath condo cost $550K and a slightly bigger house (3 bedroom 2 bath, maybe 300-400 square ft more) would cost more than $800k even needing work! And things cost less than in Manhattan (that stroller workout would be double the price per session if it was in Central Park) but still more than I'm sure other parts of the country. We seriously discussed moving pre-baby to a warmer, less urban, lower COL area that seemed to offer a lot for younger families (along the lines of Atlanta, Charlotte, Austin, Nashville) but much of our family/friends are in the NYC area, and H's job (which he enjoys a lot, and I do think because of that our focus is more on being FI vs RE) is in a high paying field that probably concentrates 85%+ of all jobs in Manhattan. We very realistically could move in 5-10 years with kid(s) still young though if he found a great opportunity somewhere else based on the experience he's getting now. We also thought in a lot of those areas to live in a smaller/medium size town if his job was in the main city, we'd be doing a LOT more driving which would make us less happy. Right now his commute is long (by MMM standards - for NYC burbs it's standard) and expensive but entirely takes place on public transport and we don't drive our one car a ton.

[davef]

We've been thinking about converting more liquid savings to the Vanguard account since it's just sitting there with 1% interest (if you can believe most of our house downpayment was sitting in that account for 2+ years...) but how much is safe to have illiquid in a mostly-stock brokerage account? We tend to be a little (okay, a lot) risk averse.
[/quote]

It is pretty safe if it is in an index fund that captures the entire market. But if you are feeling its still too risky you can hedge your bets by purchasing a couple months worth of expenses in a bond fund. Many of those get 2-4% returns and if the stock market crashes, bonds will gain value. If you put 20 or 30k there, it will do much better than 1%, and should you lose your income, and it happens to be in a recession, you've got the bond fund to bail you out.

[researcher1]

Also, I would totally count at least ~1k/mo of your housing costs as savings/investment...not just because it's going into equity but also since that's basically an extra principal payment over a 30y mortgage. It's like, you could be paying that much less for housing, which would bring your cost to a more reasonable 1/3 of income, but you choose to pay extra on it (and also get a break on the interest rate, which is a benefit). Between the $1k surplus you already have, that $1k going into equity, $2k into retirement funds, and hopefully less spent on maintenance and baby stuff, your situation starts to look a lot better than you laid out.

This is extremely BAD logic and advice!

How could anyone propose that housing costs be counted as savings/investment after the 2008 housing crisis???

History has demonstrated that there is a very real possibility of losing everything you've invested into your home and more.

[galliver]

Also, I would totally count at least ~1k/mo of your housing costs as savings/investment...not just because it's going into equity but also since that's basically an extra principal payment over a 30y mortgage. It's like, you could be paying that much less for housing, which would bring your cost to a more reasonable 1/3 of income, but you choose to pay extra on it (and also get a break on the interest rate, which is a benefit). Between the $1k surplus you already have, that $1k going into equity, $2k into retirement funds, and hopefully less spent on maintenance and baby stuff, your situation starts to look a lot better than you laid out.

This is extremely BAD logic and advice!

How could anyone propose that housing costs be counted as savings/investment after the 2008 housing crisis???

History has demonstrated that there is a very real possibility of losing everything you've invested into your home and more.

Stock market could go down, too! Let's keep money buried in a jar in the backyard! By your reasoning, it's risky to take out a mortgage at all!

The housing crisis, in my understanding, was largely based on subprime mortgage lending: zero-down, interest only, variable rate mortgages given to people were stretching their budget just to pay interest on these expensive houses and building no equity, had no emergency savings, and so forth. Of course eventually this all came crashing down; but within a couple years, urban areas had largely recovered. The OP and her husband are in the NYC area (very high demand in any forseeable future circumstance), put 20% down and have a 15-year fixed-rate mortgage (no risk of payment skyrocketing), and have various savings and investments to get them through a market dip if necessary. They have had lower housing costs with a 30 year mortgage, but knew they'd want to put extra on it so they committed to this and got a break on the interest rate; you or I might not make the same decision, but this much more like putting $1k more on a mortgage each month than like renting a $4k apartment instead of a $3k apartment.

We live in a very HCOL and I think people are conditioned to paying for things...our 1200 square foot 2 bedroom 2 bath condo cost $550K and a slightly bigger house (3 bedroom 2 bath, maybe 300-400 square ft more) would cost more than $800k even needing work! And things cost less than in Manhattan (that stroller workout would be double the price per session if it was in Central Park) but still more than I'm sure other parts of the country.

I totally get it :) I'm in the LA area now, grew up in the SF bay area and looking to move back. My bf's parents (rural midwest) get shocked looks when we call our $1250/mo rent "affordable". I get a shocked look when I see that similarly "affordable" rent in the SF area starts at $2500-3k...but also when I hear bf's childhood home sold for $250k.

[researcher1]

Stock market could go down, too! Let's keep money buried in a jar in the backyard! By your reasoning, it's risky to take out a mortgage at all!

The housing crisis, in my understanding, was largely based on subprime mortgage lending...Of course eventually this all came crashing down...

WRONG!

It is NOT risky to take out a mortgage.  It IS risky to consider your mortgage payments "savings" or "investments" as you suggested.

There is a major flaw in your stock market comparison...proper investing involves low cost, highly diversified funds consisting of both stocks and bonds.  That is FAR different that sinking $550K into a condo, which would be like investing in a single high-risk stock with huge expenses and inability to liquidate quickly.

And you lengthy description of the housing crisis completely misses the point, which is the drop in property values.  You are suggesting the OP count $1000 of their mortgage payment as "savings,"  which would be non-existent if their $550K condo loses value.

[jamesbond007]

Baby could cost a ton of money if you are looking for outside help like day care etc. My wife is a full time mom. I barely spend $100 a month now that she is 2.5 yrs old. When she was younger I used spend about $150 a month on formula, diapers, toys etc. Don't believe when people say babies cost a fortune. They don't. They do if you want to spend $500 on a stroller and $500 on an infant car seat. You see what I am saying..?

[davef]

This is extremely BAD logic and advice!

How could anyone propose that housing costs be counted as savings/investment after the 2008 housing crisis???

History has demonstrated that there is a very real possibility of losing everything you've invested into your home and more.
[/quote]


No one lost anything in 2008 except folks that over-leveraged themselves or those that panicked and sold when the market was down. Anyone who whethered the storm, (stayed put, and kept making payments) lost nothing, Most home values were back to pre-2008 levels by 2011, certainly 99.99% by 2012. The I had two, my rental lost 50k in value in 2008, it is now worth over 100k over that low. My primary residence lost 120k during that dip. It is now worth more than 200k above the 2008 dip.

Housing has gone up in value at least an average of 10% per year over ANY 10 year period since the great depression. It is more reliable than any other investment, including VTSAX. 

I agree with your point about diversification, which is why we wouldn't recommend anyone invest all of their money in real estate, but it is nearly inconceivable that 10 years from now, her condo could be worth less than it is today. Odds are it will be worth well over 1 million dollars by then. (est 1.4million) using general housing data not specific to NYC. It certainly a form of savings that is more than 99% likely to appreciate, and at worst, stay stagnant.

[chesebert]

Wow, 190k and almost nothing to show for it... This makes working those 18hr days so much harder. I think you need to sell your house and rent instead, unless you plan to stay in NYC long term and have family in the area.

[waltworks]

Housing has gone up in value at least an average of 10% per year over ANY 10 year period since the great depression. It is more reliable than any other investment, including VTSAX. 

Um, no. It has gone up about in line with inflation. Do you know what 10%/year over any significant period of time would mean? That would be a doubling every 7 years, roughly, and your $5k house purchased in 1950 (well below the $8500 average cost at the time) would now be worth (wait for it...) $2.7 MILLION.

Exponents are cool. But houses aren't a surefire way to get rich. They are a horrible investment as compared to basically everything else you can buy, unless you are buying rental properties and being very picky about it.

Check it out: http://www.multpl.com/case-shiller-home-price-index-inflation-adjusted/

-W

[bugbaby]

Wow, 190k and almost nothing to show for it... This makes working those 18hr days so much harder. I think you need to sell your house and rent instead, unless you plan to stay in NYC long term and have family in the area.

Did you even read the case study??

They're in *mid 20s*, paying off student loans and just bought a condo with 106k down (+closing), have great emergency and retirement savings.


Sent from my Nexus 5 using Tapatalk

[Viking Thor]

Wow, 190k and almost nothing to show for it... This makes working those 18hr days so much harder. I think you need to sell your house and rent instead, unless you plan to stay in NYC long term and have family in the area.

They are in mid 20s with over  $100k equity in house and $150k in savings / investments. It's both illogical and inaccurate to say "nothing to show for it". I agree their housing expenses are high and make it difficult to save at a high rate, but selling right away is just going to incur lots of transaction costs without any time for value appreciation. Also husband's salary is likely to increase (per the OP and logical for someone in mid-20s). If they can keep expenses flat or ideally cut, while husband's salary increases over time, they will do ok. Given the 15 year mortgage, if they keep it a few years, they wil likely have option of either keeping if it's more comfortable in their budget or selling and getting a big cash infusion.

[chesebert]

Wow, 190k and almost nothing to show for it... This makes working those 18hr days so much harder. I think you need to sell your house and rent instead, unless you plan to stay in NYC long term and have family in the area.

Did you even read the case study??

They're in *mid 20s*, paying off student loans and just bought a condo with 106k down (+closing), have great emergency and retirement savings.


Sent from my Nexus 5 using Tapatalk

You can't assume OP did not get help from parents for professional school and down payment. 190k is entry level finance/legal, which means husband was a recent graduate. Unless the husband got scholarship for the school, which is certainly likely, someone else paid for the school, which is also fine.

Regardless, 190k is a shit load of money and OP will likely spend it all...

[researcher1]

No one lost anything in 2008 except folks that over-leveraged themselves or those that panicked and sold when the market was down. Anyone who whethered the storm, (stayed put, and kept making payments) lost nothing, Most home values were back to pre-2008 levels by 2011, certainly 99.99% by 2012. The I had two, my rental lost 50k in value in 2008, it is now worth over 100k over that low. My primary residence lost 120k during that dip. It is now worth more than 200k above the 2008 dip.

Housing has gone up in value at least an average of 10% per year over ANY 10 year period since the great depression. It is more reliable than any other investment, including VTSAX. 

I agree with your point about diversification, which is why we wouldn't recommend anyone invest all of their money in real estate, but it is nearly inconceivable that 10 years from now, her condo could be worth less than it is today. Odds are it will be worth well over 1 million dollars by then. (est 1.4million) using general housing data not specific to NYC. It certainly a form of savings that is more than 99% likely to appreciate, and at worst, stay stagnant.

You are so completely WRONG on every level.

There are still many places in the country that have not yet fully recovered from the housing meltdown.  This is a FACT.  I can provide specific examples (with county valuations and sales data) for nice, newer, middle-class neighborhoods in a Midwest suburb.  Other well-known examples include south Florida and Las Vegas.
- This means people could have paid CASH for a home in 2007 and still not recovered their investment 10 years later.
- These people did not "over-leverage" or "panic" and sell, which you claim are the only people impacted.

Secondly, many life events can take place in the 5-10+ years following 2008 that could require someone to sell.  This doesn't mean these people "panicked."  They simply could not wait for a decade until home values came back to pre-2008 levels.
- Lost a job, took a new job, existing job relocated
- Got married, got divorced, family member passed away, had kids, ect.

Thirdly, your comparison to the stock market is completely wrong.  It is clear you are getting your information from landlording websites.
- The overall housing market has absolutely not outpaced the stock market, not by a long shot.
- A diversified index fund with an expense ratio of .15 is not even comparable to the long term real estate costs...property taxes, insurance, maintenance, utilities, closing costs, transaction costs, ect.

http://graphics.wsj.com/housing-market-recovery/

[emilypsf]

I would look into a gym with childcare instead of the yoga/stroller classes.  It's hard to get out of the house with a baby and be somewhere on time, and you will be pissed to miss classes you pay for individually.  If you can find a good gym with childcare, you can go to classes when you can make it on time and just use the gym when you end up later than expected.  Plus, you can use it when the baby is older, too.  And if you're going to do mom and baby yoga, it's nothing like a real yoga class and def not worth the money.  There are plenty of other ways to meet other moms.  Try posting in your moms group for people to walk with you once the baby is born. 

As an aside, you're not going to need a manual pump or sterilizer.  I think there is a baby registry thread somewhere in the mini mustache forum.

[Malum Prohibitum]

190k is entry level finance/legal

   Maybe in finance, I do not know, but definitely not in legal.
More like 50k to 70k
http://money.cnn.com/2014/07/15/pf/jobs/lawyer-salaries/

[chesebert]

190k is entry level finance/legal

   Maybe in finance, I do not know, but definitely not in legal.
More like 50k to 70k
http://money.cnn.com/2014/07/15/pf/jobs/lawyer-salaries/

FYI, NYC biglaw second year starts at 190k.

[Sweetpotatofries]

Wow, 190k and almost nothing to show for it... This makes working those 18hr days so much harder. I think you need to sell your house and rent instead, unless you plan to stay in NYC long term and have family in the area.

Did you even read the case study??

They're in *mid 20s*, paying off student loans and just bought a condo with 106k down (+closing), have great emergency and retirement savings.


Sent from my Nexus 5 using Tapatalk

You can't assume OP did not get help from parents for professional school and down payment. 190k is entry level finance/legal, which means husband was a recent graduate. Unless the husband got scholarship for the school, which is certainly likely, someone else paid for the school, which is also fine.

Regardless, 190k is a shit load of money and OP will likely spend it all...

OP here. We both graduated from professional school in 2015. You're right that 190K is a lot of money, and since we don't spend it on things people in our field typically do (alcohol and bars, expensive dinners and brunches out, fancy vacations) that is part of the reason I posted here - to see where it's going that we can make cuts.

However, we saved all of my salary in Year 1 (late 2015-late 2016) and will continue to through my leave pay finishing out, as well as some of H's that didn't go towards expenses or his loans. That savings is what our current retirement and emergency fund savings and a huge chunk of house downpayment is from. H received scholarships/paid his own way through school and graduated with about $40k in debt that he's paid down quickly.

We made the decision to buy because we see staying at least 5 years because 90% of family/friends are here (important with a new baby, at least for us) and H sees staying at his job that long if he's able to, at which point opportunities to jump ship will be at their peak.

[chesebert]

Good job on your prior success. Like I said, if you have family in the area and plans to stay long term, it makes sense to buy. The reality is that you are kind of locked into a high-paying, high-stress (may you don't feel it yet) job for 10+yrs at this point. You will need over 2.5M to FI and that will take a long time at your current proposed savings rate regardless of the possibility for 6 figure bonuses (if any).

Again, this is a lifestyle choice and no one can tell you whether you are right or wrong.

[SimpleCycle]

I think you're doing pretty well for young professionals who are surrounded by the high consumption lifestyle that accompanies your chosen career path.  The trick is to figure out how to march to the beat of your own drum and not get sucked into all these "have to have" categories that seem to creep up over time.

Re: baby stuff.  A lot of this is about the choices you make.  We do cloth diapers most of the time (honestly probably a wash for #1, but will be money in the bank for #2), but we use disposables when we travel and now that we're into the toddler pee era, overnight.  Amazon Mom and Target are both good deals, but Target makes it much easier to exchange for the right size if you overbuy and they outgrow a size.

The big thing it is easy to spend on is clothes and toys.  Don't do it!  We do almost all our shopping at Once Upon a Child, trading in her old clothes for credit to buy new clothes.  If you have more upscale brands, resale groups are a better deal for the selling.  And over time, you might find sources for free hand me downs - my book club keeps my daughter outfitted pretty well, and my coworkers have inundated me with boy clothes.  Toys are pretty easy to keep minimal - my daughter is 1.5 and honestly she has a few toys she's obsessed with (MagnaTiles, a wooden toy train, and a baby cell phone toy) and pretty much doesn't care about the rest.  So buy one or two things, gift will add variety, and call it good.

Re: baby medical - I believe all well child visits fall into the zero copay preventive medicine bucket.  I know we've had minimal OOP medical expenses except for the co-insurance when my daughter was hospitalized for two nights.  So about a total of $1k over 19 months, not $200/month.  Obviously there were bills for the delivery as well.

I do see places for you to cut - the life insurance cost is crazy - I'm guessing they're not term policies?  We got our policies much older than you and I'm high risk and we still pay less than that.  Groceries is also a place you can cut, but you have to decide what is important to you.  We do sustainable seafood and grassfed beef as well, we've just chosen to not eat as much as we used to.  We're in MCOL though, some of this is just the price of groceries.

Anyway, most of that is nothing new.  I think the bigger question is what are your long term plans regarding kids, careers, financial independence, and retirement.  Will you have only one child, or more than one?  Will you eventually want a bigger home?  Will you return to work once the kid(s) are in school?  Do you want to retire early or simply have as secure a financial picture as possible?  All of that influences what this looks like in the long term.

[chesebert]

I actually think OP should buy more insurance: 1.5M each for both wife and husband. Is it outrageous to pay $100 a month for a 1.5-2M policy?

[SimpleCycle]

I actually think OP should buy more insurance: 1.5M each for both wife and husband. Is it outrageous to pay $100 a month for a 1.5-2M policy?

It depends on your health, but at their ages, yes.  We pay $36/month for $1M with a 30 year term for my wife, and we bought her policy when she was 37.

If you're headed for substantial assets but have young children, it makes sense to stagger the life insurance terms, so maybe half with a 20 year term and half with a 30 year term.

chesebart, why do you think they need so much insurance?  We're way overinsured by MMM standards with about $1.1M on each of us.

[chesebert]

I actually think OP should buy more insurance: 1.5M each for both wife and husband. Is it outrageous to pay $100 a month for a 1.5-2M policy?

It depends on your health, but at their ages, yes.  We pay $36/month for $1M with a 30 year term for my wife, and we bought her policy when she was 37.

If you're headed for substantial assets but have young children, it makes sense to stagger the life insurance terms, so maybe half with a 20 year term and half with a 30 year term.

chesebart, why do you think they need so much insurance?  We're way overinsured by MMM standards with about $1.1M on each of us.

Op has a projected 100k per year in expenses. Nanny and school are expensive in NYC. They can always cancel the term life when they get to 1.5M liquid, which appears to be unlikely over the next 10yrs based on their savings rate.

[Mariposa]

We're in a similar financial situation: living in a 2bd 2ba co-op in NYC (Queens) with a 1.5yo on a similar income, except that we're a lot older. I think you've definitely overbudgeted in a number of categories:

                                                   savings
home maintenance   500   100       400  (Going forward, after buying washer & dryer)
life insurance           200   100       100
Metro North pass      300     45       255  (Double-counted in pre-tax deductions, as others have pointed out)
electric                     100    60         40  (We don't spend more than this for our 1100 sq foot co-op, and we have made
                                                            zero effort to reduce consumption.)
2 cell phones              75     45        30  (BYOD to Ting or some similar service)
General medical OOP  200     0      200  (If you have decent employer-sponsored insurance, most large hospital systems       
                                                            are in-network. I had a complicated delivery and paid zero OOP.)
baby medical              200    50     150 (This is being generous. Zero co-pays for preventative visits, as others have 
                                                           pointed out. We basically pay for baby Tylenol when he gets sick.)
baby supplies             200   100     100
diapers                      100     40      60
student loan               400      0      400 (This will disappear soon.)
car maint / replacement  0    110    -110 (Assuming $8000 used vehicle every 8 years, and $300 a year for maintenance
                                 ---------------------  / registration / NYS inspection.)
        total additional monthly savings: 1625

Note that with high local and property taxes and mortgage interest, you'll want to itemize on your taxes. That's ~$3800 a year back on your federal taxes from mortgage payments: $424,000 x 0.03625 x 0.25 bracket = ~$3800.

$2625*12 + 3800 + 16,000(401k) + 5500(spousal IRA) = ~$57k a year in savings. Not bad. You'll be able to save even more after DH's raise and you picking up some work.

I would put $5500 in DH's Roth IRA before anything in taxable.

We spend less in some categories than you, but a lot more in others. Our co-op's purchase price was actually more than what you paid, but our overall monthly housing cost is lower, since we got a 30y fixed. We figure with low mortgage rates these days, we'll put more money away, let inflation and compounding do its thing, and pay off our mortgage in a lump sum prior to FIRE. Our property taxes are somewhat lower, but we do pay NYC city tax.

Our transportation costs are a lot lower, and we don't have a car, but we spend $1200 a month for food (eating out 2-3x a week because restaurants here are fantastic, and DH buys lunch and coffee out 5 days a week.) We also pay ~15k a year for daycare, support a family member for $15k a year (post-tax), and fly 3x a year for vacation and to visit family in other parts of the country. Those are our priorities, and we spend little on everything else. Our timeline to FIRE is in about 12 years.

Another suggestion is to look into credit card travel hacking, since you take at least one vacation a year. $2000-5000 a year without too much effort. Great opportunities for this right now, but it probably won't last forever.
                   

[MayDay]

As a new mom, I do think the idea of getting out to meet other moms is important, and so is you getting time to exercise.  You have to go through it to figure out what works for you, to some extent.

Just keep in mind that baby yoga = baby playtime, not a real workout.  I don't know how much a gym costs in your area, but a gym with childcare can be much more cost effective, or coat a fortune, depending on your area.

I am sure your H worksong hours, but one option is to find a 6 am yoga class and go before he leaves for work. You are currently thinking about doing all this exercising with baby and maybe that will work for you, but I'd say most mom's want to get away from baby for a bit.

Finding free social opportunities is clearly going to be important. You'll spend a fortune on meetups and playgroups of you aren't careful. Start looking around and getting on the email list for LLL meetings, library story times (yes bring a tiny baby, this is all about meeting mom's!) Mom's clubs (the ones around me meet at churches for free) etc. You could even start your own if area churches or community centers would let you use a room. 

Good luck with baby.  If there are no major medical surprises it might make sense to go down to a high deductible medical plan next year and max the HSA.

[Sweetpotatofries]

As a new mom, I do think the idea of getting out to meet other moms is important, and so is you getting time to exercise.  You have to go through it to figure out what works for you, to some extent.

Just keep in mind that baby yoga = baby playtime, not a real workout.  I don't know how much a gym costs in your area, but a gym with childcare can be much more cost effective, or coat a fortune, depending on your area.

I am sure your H worksong hours, but one option is to find a 6 am yoga class and go before he leaves for work. You are currently thinking about doing all this exercising with baby and maybe that will work for you, but I'd say most mom's want to get away from baby for a bit.

Finding free social opportunities is clearly going to be important. You'll spend a fortune on meetups and playgroups of you aren't careful. Start looking around and getting on the email list for LLL meetings, library story times (yes bring a tiny baby, this is all about meeting mom's!) Mom's clubs (the ones around me meet at churches for free) etc. You could even start your own if area churches or community centers would let you use a room. 

Good luck with baby.  If there are no major medical surprises it might make sense to go down to a high deductible medical plan next year and max the HSA.

Thanks for this post, it was really helpful! I have already gotten on the email list for LLL meetings (only held 1x per month) and library story time (excellent, free way to meet other moms recommended that they do for each age group once a week at our walking distance library). We don't belong to a church (and if we did it would be a synagogue) because they're very expensive for membership and we won't use it regularly until our kid(s) are of age to attend religious school, but I did also locate a free playgroup at a local synagogue for slightly older kids (18 mos+).

Point taken about Mommy + Me Yoga - I think I'll drop that although I still plan to try and go to Stroller Strides 1x/week. That cuts the monthly budget for classes in half. I can try to do Youtube yoga videos while baby naps. I'm not sure but I guess it wasn't clear...I plan to continue using running as my main form of exercise, waking up before H leaves for work 2x during the week and both weekend mornings. When he's older we have a jogging stroller I can put to good use, but we were told not to use it to actually run until he's 6 months old.

I just know that I'm a super active person now so other than walks with baby in the morning, I'd want some social activity that baby can fit into that's also active.

Gyms in our area (the local YMCA/YWCA, Equinox, etc) all charge $150+/month and charge extra for childcare - high COL area. There are some budget gyms but they don't offer classes which is what I'd use them for (I hate treadmills and will run outdoors in all weather).

[MayDay]

As an active person, I suggest being really aware of PP depression. You are going from an active life, a job, etc, to being home with a baby and living in a new neighborhood where you won't know anyone. It is really easy to become isolated if you don't have mom friends.

That's why I do think it's worth spending money to do these baby activities- but the goal should be to meet people and spin it off into just getting together outside of classes and quitting/decreasing the classes.

[waltworks]

If you like boot-camp style exercise classes, there is a decent chance there's a kid-friendly one near you. My wife and I do them all the time and it's a great way to meet other parents as well as let kids (once they get a little older) socialize. And everyone knows the score, so nobody is going to get upset by a toddler wandering around while you do burpees.

-W

[englishteacheralex]

I wanted to comment on exercising with a baby. I'm a mom with a six week old and a 2.5 year old. Prior to having my first, I was an avid runner and had run 4 marathons. Childbirth gave me bladder prolapse (way more common than you would think) and running was not something I could take for granted anymore.

I am hard core mustachian, so this may not be a workable solution for you, but I'll weigh in on what I've done about exercise and socializing when you have littles. Contact with other moms is very, very important when you have babies. But there are ways of going about a social life that are cheaper/free. Be on the lookout for free mom meet up groups. Be proactive about approaching moms at the playground. Sign up for just the introductory classes at things like Gymboree and Stroller Strides (I've gotten a free pass at everything like this in my town and all the neighboring towns, and I always meet some moms there and quickly get phone numbers).

Once you've taken one or two stroller strides/yoga babies/gymboree classes, you have a bunch of new moves to do with kids/strollers that you can then do by yourself. I have a whole repertoire of independent stroller workouts that I do with the kids. The bladder prolapse means I have to tailor my workouts to my needs, anyway, which stroller strides couldn't really accommodate. I got a lot of moves from my pelvic floor physical therapy.

You'd be surprised at how much of a workout you'll find it just to push a stroller while walking for the first few months postpartum.

Of course, everybody has different experiences with their bodies after birth. I would take as many free passes/intro classes as I could to see what works for your body. For me, the best solution once my bladder situation resolves is actually going to be the gym in my condo and the pool down the street while my husband watches the kids (we may also hire a babysitter for our exercise time eventually). I can't run long distances anymore and there's a good chance I never will be able to again.

Finally, as for all the other baby expenses: we've found that the only thing expensive about babies is daycare. Everything else can be done for very little as long as you aren't picky. Try to keep in mind with all the gear that almost everything you get for a baby is only used for around 6 months to a year at the most. So craigslist and hand me downs from friends are really the way to go for almost everything. If breastfeeding goes well, it's free: big plus. We spend about $40/month/ kid on diapers--Costco has been fine for that.

[KBecks]

Check Meetup.com to see if there are any mom club type groups near you that you can check out when you are ready to leave the house. 
Also, meet the moms at your free library storytimes and ask them out on playdates, invite them over for socializing.  Pick who you like.  Make the most of those free activities to network.  When your little one is older, go to places like the mall playground or, nice weather, the neighborhood playground and mingle and set up playdates with moms that you enjoy.
Ditto on the gym with childcare being wonderful, once you are comfortable.
Do not over-stock on diapers, they grow sizes fast until they are older / toddlers.  When diapers start leaking, size up.  Target diapers were good for us.

[BlueHouse]

I think you guys are doing great and it's great that you're trying to plan for frugal baby.  i think the biggest worry is how to keep your frugal ways after baby is born and not allow yourself to succumb to keeping up with the baby Joneses.  SAHMs can be incredibly competitive and use the whole "it's for the baby" and guilt you into paying more, buying more, doing more for the baby.   

\ you may want to consider creating your own groups and creating your own fitness classes for other moms like you.  The whole idea of Stroller Strides makes me laugh.  You're doing free exercises but paying for it.  You're certainly able to do this for free and if you find other like-minded people, make it a group thing. 

[MayDay]

I think you guys are doing great and it's great that you're trying to plan for frugal baby.  i think the biggest worry is how to keep your frugal ways after baby is born and not allow yourself to succumb to keeping up with the baby Joneses.  SAHMs can be incredibly competitive and use the whole "it's for the baby" and guilt you into paying more, buying more, doing more for the baby.   

\ you may want to consider creating your own groups and creating your own fitness classes for other moms like you.  The whole idea of Stroller Strides makes me laugh.  You're doing free exercises but paying for it.  You're certainly able to do this for free and if you find other like-minded people, make it a group thing.

Another way that the keeping up with the baby Jones happens is that you are fucking exhausted all the time, and your brain is a fog, and you're starved for social contact, and you can't exactly take baby to "do" anything since all they do is eat/sleep/scream.

So you go to Target every other day, because you do genuinely need ________. And it gives you a feeling of adult interaction and "getting things done" besides being a giant milking/laundry machine. But naturally it is impossible to leave Target with all.the.things, especially in your sleep deprived foggy brain state.

All the baby clothes and gear stores also always have a cycle of sales and rewards. And of course if you are online browsing the reviews for whatever, it is sooooooo easy to get sucked into it all. Times a million when all the mom's around have all this stuff.

[KBecks]

LOL, aren't babies wonderful!   

You can do this.

I will say I enjoyed walking around Wal Mart by myself around 11 p.m., just because it was some "me" time.  Don't think I bought much though.

[Sweetpotatofries]

Check Meetup.com to see if there are any mom club type groups near you that you can check out when you are ready to leave the house. 
Also, meet the moms at your free library storytimes and ask them out on playdates, invite them over for socializing.  Pick who you like.  Make the most of those free activities to network.  When your little one is older, go to places like the mall playground or, nice weather, the neighborhood playground and mingle and set up playdates with moms that you enjoy.
Ditto on the gym with childcare being wonderful, once you are comfortable.
Do not over-stock on diapers, they grow sizes fast until they are older / toddlers.  When diapers start leaking, size up.  Target diapers were good for us.

Thanks for the diaper advice - really useful to know!

As I mentioned in an earlier post there's one mom meetup group that's free and walking distance from our house, another couple are driving distance in the small city next door to our town.

I think you guys are doing great and it's great that you're trying to plan for frugal baby.  i think the biggest worry is how to keep your frugal ways after baby is born and not allow yourself to succumb to keeping up with the baby Joneses.  SAHMs can be incredibly competitive and use the whole "it's for the baby" and guilt you into paying more, buying more, doing more for the baby.   

\ you may want to consider creating your own groups and creating your own fitness classes for other moms like you.  The whole idea of Stroller Strides makes me laugh.  You're doing free exercises but paying for it.  You're certainly able to do this for free and if you find other like-minded people, make it a group thing.

I would love to be able to organize a group of new moms to workout together - we just moved to town last month though and it's been difficult to meet people since I'm still working and we've been setting up the condo/attending childbirth classes near where we used to live in NYC on weekends. Part of the reason I want to do something like Stroller Strides is to meet other moms interested in working out with their babies and then I'd hope that after awhile there are other people who want to run together with our jogging strollers, etc. outside a paid class.

Pretty much EVERYTHING except the public library storytime and one meetup I found has at least a nominal fee (many local meetups ask for a contribution towards whatever space they're occupying), even the new moms' groups run by local hospitals and OB/midwifery offices charge $$. LLL meetings seem like another great free option but they're only once a month. I'm not sure if being near NYC is what makes everything fee-based; I do know from talking to people at my office, in my NYC prenatal yoga class, etc that the new moms' groups in the city itself can cost 2-3x as much!

I've been cautioned that being a SAHM you need to make getting out of the house and doing *something* with other people if not every day, then the majority of them, or it'll be a lot harder - not having done this before I don't know if it's true but I believe it.