Author Topic: Case Study: advice for parents raising two daycare-age kids?  (Read 15304 times)

sockmunkee

  • 5 O'Clock Shadow
  • *
  • Posts: 17
Case Study: advice for parents raising two daycare-age kids?
« on: September 14, 2012, 10:50:54 AM »
Wife and I are raising a 2 year old in the Cleveland, OH suburbs with another kid on the way.  Looking for advice from other parents regarding optimal setup (stay at home vs. daycare vs. sending to someones house).  From my vantage point, it doesn't make sense for either of us to quit work and stay home with two kids.  They miss out on the social interaction from daycare and with both of our incomes around $70k pre-tax, it doesn't make financial sense - even with local daycare costs at almost $1000 per month per child.

I know MMM would tell me to relocate to some other state (property/income taxes here are high), but we very much enjoy the area, the four seasons, and my wife's parents are nearby.  (A big benefit of this is that my father-in-law, who used to be a mechanic, helps keep our 02 Honda Civic and 2000 Dodge Caravan going strong.)

Also open to any blunt, face-punching feedback about my expenses. 

Here's the rundown:

Income
 
  • $7000 combined monthly income (after tax, FSA and HSA contributions, and 10 percent 401k contributions) - wife and I make about the same, we both enjoy our jobs, and both of us have potential to take higher paying positions in next year or two
  • $500 occasional local singing gigs
Monthly Expenses:
 
  • $1100 house payment, including property tax (650 for mortgage, 450 for property taxes)
  • $940 daycare for 1 toddler but this will double when next child arrives in March
  • $800 for Roth IRA contributions (trying to max out at least until next kid comes)
  • $265 (2) student loan payments (aggressively paying off the principal for the higher of the two)
  • $255 car & life insurance
  • $225 gas & electric
  • $220 fuel for cars (wife works from home and usually picks up from daycare; I am just under 8 miles for work commmute and am considering seriously biking to work)
  • $700 groceries and household items
  • $200 eating out
  • $160 wife's knitting supplies (these are often made into gifts for bdays and xmas)
  • $150 fast food (currently pregnancy cravings)
  • $13 hulu
Assets/Liabilities
 
  • $100,000 in Vanguard IRAs (mixture of Roth and Traditional IRA)
  • ~$30,000 in home equity (home is worth ~$140k)
  • $110,000 left on home mortgage, fixed 30-yr at 5.1% (considering refinancing)
  • $12000 (my student loan) - locked in at 2.6% so I'm just doing minimum payments
       - anyone have an argument for paying this off?
  • $11000 (wife student loan) - working to pay this off by end of the year (current rate is 5.7%)
  What I've done since reading MMM:
 
  • cut the cable TV (still need cable internet as wife works from home)
  • changed family cell phone plan from $160 to $120 (Verizon shared plan seems to be a good deal so far)
  • started aggressively tackling wife's student loan debt
  • stopped eating out so much
  • bought universal men's hair cut device (i.e. start cutting my hair)

$_gone_amok

  • Stubble
  • **
  • Posts: 149
Re: Case Study: advice for parents raising two daycare-age kids?
« Reply #1 on: September 14, 2012, 11:18:34 AM »
I have a 3 and 1 year old both in daycare.  I agree that you shouldn't quit and give up potential for a salary bump a few years later, especially that you both enjoy your jobs.

RoseRelish

  • Stubble
  • **
  • Posts: 179
  • Age: 32
  • Location: Chicagoland
    • RoseRelish - Slow down and Enjoy Life
Re: Case Study: advice for parents raising two daycare-age kids?
« Reply #2 on: September 14, 2012, 11:19:47 AM »
Refi the mortgage immediately. You shouldn't really be over 4% right now.

I think the groceries/household items category is too high, but I've never had a pregnant wife/young child.

And personally, I think $2k/month is a lot to pay for "social interaction". Kids will get plenty of interaction at the local park/playdates/etc.

Also, your gasoline bill is pretty massive for a wife working at home and you having an 8-mile commute. My wife drives 45 minutes each way to work and our total expense for gas is something like $200.

Congrats on the 2nd child, by the way!

kdms

  • Stubble
  • **
  • Posts: 178
  • Location: Ottawa, Canada
Re: Case Study: advice for parents raising two daycare-age kids?
« Reply #3 on: September 14, 2012, 11:20:19 AM »
We're just north of the border and in almost the exact same situation as you, and IMO, really, the question you need to answer is how, exactly, do you want to raise your kids?  Does your other half want to stay with the kids or is s/he really career oriented?  While it may not make any financial sense given your incomes for one of you to stay home, it isn't really about that.  I've got a $70k+ income and my DH is around half of that (but rising rapidly as he's trained), and we're planning to go down to one income by the time our toddler gets to be school-aged, so that I can stay home and homeschool him myself.

I have a tendency to raise my eyebrows when someone mentions the benefits of socialization in daycare.  Our two year old has learned to kick, bite, and punch from the other kids in his daycare....to the point where I've had to have words with the provider regarding how she manages the place, and I've had to start looking around for alternatives.  I really resent sending my son out during the day for someone else to raise, and our plan for FI doesn't mean retirement, it means being able to live on one salary so that we can raise our kid(s) ourselves.  :)  But as I said, that's just our particular picture....and I will never judge anyone for their choices.  (Our parents and all of our friends think we're nuts, btw.)

At $70k a year, and $2k a month for daycare (2 kids), plus commuting, work clothing, tight schedules, lunches, loss of family time, etc, etc,....how much of that $70k is actually staying in the house?  At your numbers, 57% of one of your salary net take-home pay is (or will be) going to daycare.  If everything else related to the one job comes even close to eating up the rest of the available $1500 out of $3500 net of that one salary, I would think there's a convincing argument to stay home right there...that's one of the main reasons we're going the single-income route, when DH's salary reaches the point that we can live off of just that alone.

Just my two cents worth....hopefully others will have more money-related insights.  Best of luck with your decision..... :)

AJ

  • Pencil Stache
  • ****
  • Posts: 906
  • Age: 36
  • Location: Oregon
Re: Case Study: advice for parents raising two daycare-age kids?
« Reply #4 on: September 14, 2012, 11:31:17 AM »
Well, it sounds like you already know the big items that folks will mention (daycare and property taxes).

$160 in knitting supplies a month sounds a bit high. This is an honest and not sarcastic question: how does your wife find the time to knit through $160 worth of supplies with a full time job and a kid? Seriously, I can't find enough time for my free hobbies even now (FT job, but zero kids). Could she potentially cut this down and replace it with a cheaper hobby?

Is there any flexibility in your work schedules? Could you stagger them so that the kiddos aren't in daycare full time? I know this is heresy to many people, but could you find cheaper childcare? I peeked briefly at the Cleveland craigslist and saw several providers listing a price of $25 a day (about half what you're paying), plus a discounted rate for siblings.

Groceries/household is kind of high, but with two FT working parents and young kids it isn't surprisingly high.

Are you potentially over-insured? We each have a half-million dollar life policy and extended liability on two vehicles and we still pay much less than what you're paying ($130 a month for all). $500k wouldn't fully replace one of our incomes, but it would provide enough. We don't drive cars fancy enough to need comprehensive coverage, but we do choose to increase out liability coverage so that our assets aren't in jeopardy in the event of a bad accident.

All told, though, your expenses are really reasonable compared to your income.

$_gone_amok

  • Stubble
  • **
  • Posts: 149
Re: Case Study: advice for parents raising two daycare-age kids?
« Reply #5 on: September 14, 2012, 11:44:17 AM »
We're just north of the border and in almost the exact same situation as you, and IMO, really, the question you need to answer is how, exactly, do you want to raise your kids?  Does your other half want to stay with the kids or is s/he really career oriented?  While it may not make any financial sense given your incomes for one of you to stay home, it isn't really about that.  I've got a $70k+ income and my DH is around half of that (but rising rapidly as he's trained), and we're planning to go down to one income by the time our toddler gets to be school-aged, so that I can stay home and homeschool him myself.

I have a tendency to raise my eyebrows when someone mentions the benefits of socialization in daycare.  Our two year old has learned to kick, bite, and punch from the other kids in his daycare....to the point where I've had to have words with the provider regarding how she manages the place, and I've had to start looking around for alternatives.  I really resent sending my son out during the day for someone else to raise, and our plan for FI doesn't mean retirement, it means being able to live on one salary so that we can raise our kid(s) ourselves.  :)  But as I said, that's just our particular picture....and I will never judge anyone for their choices.  (Our parents and all of our friends think we're nuts, btw.)

At $70k a year, and $2k a month for daycare (2 kids), plus commuting, work clothing, tight schedules, lunches, loss of family time, etc, etc,....how much of that $70k is actually staying in the house?  At your numbers, 57% of one of your salary net take-home pay is (or will be) going to daycare.  If everything else related to the one job comes even close to eating up the rest of the available $1500 out of $3500 net of that one salary, I would think there's a convincing argument to stay home right there...that's one of the main reasons we're going the single-income route, when DH's salary reaches the point that we can live off of just that alone.

Just my two cents worth....hopefully others will have more money-related insights.  Best of luck with your decision..... :)

I won't argue that having a stay at home mom during the toddler years is a bad decision. However, from the OP's financial standpoint, their income is too high to give up given they are still paying for student loans and their income could raise significantly in a few years.  OP could also reach FIER quicker (if that is their goal) with two income rather than one over the long run.

Also, there are no empirical evidence suggesting that home schooled kids performs either academically or socially better than public schooled kids. While I respect personal decisions made by the parents who decide to home school their kids, in a lot of cases, giving up a career to stay home with the kids doesn't make too much sense financially.

sockmunkee

  • 5 O'Clock Shadow
  • *
  • Posts: 17
Re: Case Study: advice for parents raising two daycare-age kids?
« Reply #6 on: September 14, 2012, 11:54:38 AM »
Refi the mortgage immediately. You shouldn't really be over 4% right now.

I think the groceries/household items category is too high, but I've never had a pregnant wife/young child.

And personally, I think $2k/month is a lot to pay for "social interaction". Kids will get plenty of interaction at the local park/playdates/etc.

Also, your gasoline bill is pretty massive for a wife working at home and you having an 8-mile commute. My wife drives 45 minutes each way to work and our total expense for gas is something like $200.

Congrats on the 2nd child, by the way!

I am looking into refinancing - my calculations show the payback at a little under two years (depending on where exactly the fees fall) but we are also talking about moving from a 3 BR/2-bath into something just a bit bigger with room to grow for two kids.  Wife is open to staying put or moving but we could certainly save some property/income tax dough from moving to a neighboring suburb (with just as good schools, same or shorter commute, etc.).

Definitely agree on the groceries - what are the first steps for improving on this?  We shop at WalMart and a local grocery chain but with pregnant wife who has been pretty sick, we're a bit relegated to whatever will sit in her stomach for the current week.  I'm also not hardcore enough to switch to Paleo diet or something like that just yet...I need to take baby steps.

On the gasoline bill - I drive to daycare to drop-off (and I have been picking up a lot lately).  Plus we travel around on the weekends for toddler entertainment (zoo, etc.).  I am working on less expensive entertainment for the youngin - e.g. more trips to the park, maybe some bike rides in the near future.

Portland Man

  • 5 O'Clock Shadow
  • *
  • Posts: 23
  • Location: PDX, OR
Re: Case Study: advice for parents raising two daycare-age kids?
« Reply #7 on: September 14, 2012, 12:01:24 PM »
It completely depends on your priorities.

I make $70k and one of our biggest priority is that a parent stays at home, so my wife quit her $40k/year job.  Easier decision with her earning less than either parent in the OP, but that's just our priorities.  We're the opposite of the person a couple posts up in that my wife will probably get a job once our daughter reaches school age.

I don't think socialization is an issue for a stay at home parent/toddler, the kid will get exactly as much socialization as you make it a priority to give them.  My wife and kid do story hour at the library every week, swimming with friends, play dates, nearly daily trips to the play ground, etc.

Definitely agree on the groceries - what are the first steps for improving on this?  We shop at WalMart and a local grocery chain but with pregnant wife who has been pretty sick, we're a bit relegated to whatever will sit in her stomach for the current week.  I'm also not hardcore enough to switch to Paleo diet or something like that just yet...I need to take baby steps.

Without knowing what your current shopping list looks like, start by buying food, not food products.  Shop the perimeter of the store, not the center.  This is one thing that is a lot easier with a stay at home who has the time to spend shopping and cooking.

sockmunkee

  • 5 O'Clock Shadow
  • *
  • Posts: 17
Re: Case Study: advice for parents raising two daycare-age kids?
« Reply #8 on: September 14, 2012, 12:07:42 PM »
Well, it sounds like you already know the big items that folks will mention (daycare and property taxes).

$160 in knitting supplies a month sounds a bit high. This is an honest and not sarcastic question: how does your wife find the time to knit through $160 worth of supplies with a full time job and a kid? Seriously, I can't find enough time for my free hobbies even now (FT job, but zero kids). Could she potentially cut this down and replace it with a cheaper hobby?

Is there any flexibility in your work schedules? Could you stagger them so that the kiddos aren't in daycare full time? I know this is heresy to many people, but could you find cheaper childcare? I peeked briefly at the Cleveland craigslist and saw several providers listing a price of $25 a day (about half what you're paying), plus a discounted rate for siblings.

Groceries/household is kind of high, but with two FT working parents and young kids it isn't surprisingly high.

Are you potentially over-insured? We each have a half-million dollar life policy and extended liability on two vehicles and we still pay much less than what you're paying ($130 a month for all). $500k wouldn't fully replace one of our incomes, but it would provide enough. We don't drive cars fancy enough to need comprehensive coverage, but we do choose to increase out liability coverage so that our assets aren't in jeopardy in the event of a bad accident.

All told, though, your expenses are really reasonable compared to your income.

AJ - agreed on the knitting...alas, this is her primary hobby (along with reading) and she buys the nicer yarns and needles...so I haven't pushed on this one too much...yet.  I think the patterns add up, though in her defense, she gets the majority of her patterns from the library.

I am very seriously looking at the daycare (hence the post) since it will be the largest expense by far here in 9 months.  Definitely some flexibility in both schedules that we could exploit...this is a great idea, thank you.  I will be doing more research on the other providers as well (good call on craigslist).

I still have comp on our car insurance - this may be worth getting rid of.  I'm still confused about exactly what insurance to have - I've read many opinions, but I'm guessing you are right that we are overinsured.  Home insurance is for rebuild value of 280k which seems nuts to me when our home market value is half that. 

RoseRelish

  • Stubble
  • **
  • Posts: 179
  • Age: 32
  • Location: Chicagoland
    • RoseRelish - Slow down and Enjoy Life
Re: Case Study: advice for parents raising two daycare-age kids?
« Reply #9 on: September 14, 2012, 12:26:09 PM »
If you're going to move soon, a refi may not make as much sense. If you're staying put, definitely do it.

On groceries - I'm sure a pregnant wife makes it more difficult, especially with the issue of getting whatever sits in her stomach. Just do simple things - buy store brand/name brand, fresh foods tend to be cheaper than prepackaged, etc.

And gas: stop taking big weekend excursions. Kids are just as happy to go to the park or play in a cardboard box...at least I was!

alandjackson

  • 5 O'Clock Shadow
  • *
  • Posts: 25
Re: Case Study: advice for parents raising two daycare-age kids?
« Reply #10 on: September 14, 2012, 12:29:42 PM »
Staying at home vs day care isn't really a financial decision for most people.  With 1-2 kids, 2 professionals can always make more money than 1 plus a stay at home.

The real decision is if you want to outsource that much of raising your kids to someone else.  I don't want to put words in someone else's mouth, but it sounds like MMM wanted to raise his own kid enough to make sure they had 2 stay at home parents.

Especially during the early years, there is really no financial equation to it at all for us.  As long as we can live on one income (and everyone reading MMM should be able to), we want a stay at home parent to be with the kids.

Obviously many people disagree and would rather have the income than spend the day with their kids, but that is a personal choice.

sockmunkee

  • 5 O'Clock Shadow
  • *
  • Posts: 17
Re: Case Study: advice for parents raising two daycare-age kids?
« Reply #11 on: September 14, 2012, 12:37:28 PM »
We're just north of the border and in almost the exact same situation as you, and IMO, really, the question you need to answer is how, exactly, do you want to raise your kids?  Does your other half want to stay with the kids or is s/he really career oriented?  While it may not make any financial sense given your incomes for one of you to stay home, it isn't really about that.  I've got a $70k+ income and my DH is around half of that (but rising rapidly as he's trained), and we're planning to go down to one income by the time our toddler gets to be school-aged, so that I can stay home and homeschool him myself.

I have a tendency to raise my eyebrows when someone mentions the benefits of socialization in daycare.  Our two year old has learned to kick, bite, and punch from the other kids in his daycare....to the point where I've had to have words with the provider regarding how she manages the place, and I've had to start looking around for alternatives.  I really resent sending my son out during the day for someone else to raise, and our plan for FI doesn't mean retirement, it means being able to live on one salary so that we can raise our kid(s) ourselves.  :)  But as I said, that's just our particular picture....and I will never judge anyone for their choices.  (Our parents and all of our friends think we're nuts, btw.)

At $70k a year, and $2k a month for daycare (2 kids), plus commuting, work clothing, tight schedules, lunches, loss of family time, etc, etc,....how much of that $70k is actually staying in the house?  At your numbers, 57% of one of your salary net take-home pay is (or will be) going to daycare.  If everything else related to the one job comes even close to eating up the rest of the available $1500 out of $3500 net of that one salary, I would think there's a convincing argument to stay home right there...that's one of the main reasons we're going the single-income route, when DH's salary reaches the point that we can live off of just that alone.

Just my two cents worth....hopefully others will have more money-related insights.  Best of luck with your decision..... :)

Great way of looking at it, thank you.

Although my wife has mentioned staying home on rare occasions, I don't think she would truly enjoy it.  She seems to derive much satisfaction from work and she is good at what she does. 

Here's another element to the whole thing - she works remotely for a West Coast software company that will go public in a year.  They are very profitable with excellent growth, so her stock options will likely be worth a good chunk.  However, she has to stay for 3-4 more years to get the max amount of options.  Again, I look at this as another financial argument to continue with childcare.

I truly don't think we would do a better job home schooling.  We've specialized in our respective fields (both with graduate degrees), and neither of those is child education.  However, I think there is a feasible alternative to the current daycare, as much as we love the teachers and the friends she has made (and the friends I'VE made via other parents). 

AJ

  • Pencil Stache
  • ****
  • Posts: 906
  • Age: 36
  • Location: Oregon
Re: Case Study: advice for parents raising two daycare-age kids?
« Reply #12 on: September 14, 2012, 12:52:14 PM »
The real decision is if you want to outsource that much of raising your kids to someone else.

...

Obviously many people disagree and would rather have the income than spend the day with their kids, but that is a personal choice.

This might be controversial, but I don't think the issue is whether you want to outsource raising your kids. I think the issue is what do you want to do all day. Like gone_amok said, there is no evidence that a SAHP is any better for the child than daycare. The issue is, what do you as the parent want? I know many working mothers that die a little inside every day they have to spend away from their young children. One friend told me with tears that her baby looks a bit bigger every time she picks her up from care, and that was very upsetting to her. She felt like she was missing her baby's life.

OTOH, I know myself well enough to know I would not do well at home all day with children. DH and I want to be two SAHPs when we have kids, but part of that is how crazy I would go if it was just me alone at home with young ones. I just couldn't do it.

Happy parents make happy kids. A working mother that resents not being able to stay at home is just as bad as a SAHM who resents not being able to work.

I'm probably reading too much into it, but it comes off as a bit judgy to me when you say that working parents would rather have money than spend time with their kids. It isn't that simple. Many folks (including the OPs wife) enjoy their work and don't want to spend all day at home. Since there is no evidence that daycare is any worse for the child than not, why shouldn't she do what fulfills her? It sounds like the money is something of a side benefit.

Edited for grammar.
« Last Edit: September 14, 2012, 12:55:17 PM by AJ »

Portland Man

  • 5 O'Clock Shadow
  • *
  • Posts: 23
  • Location: PDX, OR
Re: Case Study: advice for parents raising two daycare-age kids?
« Reply #13 on: September 14, 2012, 12:58:07 PM »
The real decision is if you want to outsource that much of raising your kids to someone else.

...

Obviously many people disagree and would rather have the income than spend the day with their kids, but that is a personal choice.

This might be controversial, but I don't think the issue is whether you want to outsource raising your kids. I think the issue is what do you want to do all day. Like gone_amok said, there is no evidence that a SAHP is any better for the child than daycare. The issue is, what do you as the parent want? I know many working mothers that die a little inside every day they have to spend away from their young children. One friend told me with tears that her baby looks a bit bigger every time she picks her up from care, and that was very upsetting to her. She felt like she was missing her baby's life.

OTOH, I know myself well enough to know I would not do well at home all day with children. DH and I want to be two SAHPs when we have kids, but part of that is how crazy I would go if it was just me alone at home with young ones. I just couldn't do it.

Happy parents make happy kids. A working mother that resents not being able to stay at home is just as bad as a SAHM who resents not being able to work.

I'm probably reading too much into it, but it comes off as a bit judgy to me when you say that working parents would rather have money than spend time with their kids. It isn't that simple. Many folks (including the OPs wife) enjoy their work and don't want to spend all day at home. Since there is no evidence that daycare is any worse for the child than not, why shouldn't she do what fulfills her? It sounds like the money is something of a side benefit.

Edited for grammar.

No offense, but this reads far more "judgy" than what you are responding to - especially since, as I read it, you don't have kids...


edit to add stuff instead of knee-jerk reactionism:

What benefit does the child get from a stay at home parent?  I think it is especially important in a Mustachian type lifestyle, as you are teaching BY DOING the sort of values that are espoused in this website.  By doing rather than hiring, you are setting the kid up for a lifetime of kicking ass, where as paying someone else to take care of them shows them that it's often easier and more convenient to buy a solution to your problems.

Waiting until FI is probably a better scenario all around, but it doesn't always happen that way, and in my case at least, having the child was a big wake-up call to changing our lifestyles to become more financially independent and to teach her the same.
« Last Edit: September 14, 2012, 01:01:11 PM by Portland Man »

AJ

  • Pencil Stache
  • ****
  • Posts: 906
  • Age: 36
  • Location: Oregon
Re: Case Study: advice for parents raising two daycare-age kids?
« Reply #14 on: September 14, 2012, 01:04:23 PM »
No offense, but this reads far more "judgy" than what you are responding to - especially since, as I read it, you don't have kids...

I don't have kids anymore, correct. We fostered two lovely children with the intention of adopting them, though they have since been adopted by another couple. Though it is not the same as raising one from an infant, I am not totally without parenting experience.

AJ

  • Pencil Stache
  • ****
  • Posts: 906
  • Age: 36
  • Location: Oregon
Re: Case Study: advice for parents raising two daycare-age kids?
« Reply #15 on: September 14, 2012, 01:07:22 PM »
What benefit does the child get from a stay at home parent?  I think it is especially important in a Mustachian type lifestyle, as you are teaching BY DOING the sort of values that are espoused in this website.  By doing rather than hiring, you are setting the kid up for a lifetime of kicking ass, where as paying someone else to take care of them shows them that it's often easier and more convenient to buy a solution to your problems.

You're conflating staying at home with DIY-ing everything. Nothing in the OPs note indicated that he hires someone else to do everything for him.

alandjackson

  • 5 O'Clock Shadow
  • *
  • Posts: 25
Re: Case Study: advice for parents raising two daycare-age kids?
« Reply #16 on: September 14, 2012, 01:20:06 PM »
Wasn't meant to sound "judgy", just wanted to point out that for most people the decision isn't so much financial as personal (though obviously if you don't make a decent wage, you aren't getting ahead with 2+ kids in day care).

It may not be better/worse overall, but you have to consider the fact that with little kids in day care, 80% of their free time will be in someone else's care and the kids will be absorbing their values more than yours.  At least that is how we see/saw it and why we made the decision we did.

Everyone has to decide for themselves and obviously a wife that is forced to stay home when she isn't on board with it is going to be pretty miserable.

alandjackson

  • 5 O'Clock Shadow
  • *
  • Posts: 25
Re: Case Study: advice for parents raising two daycare-age kids?
« Reply #17 on: September 14, 2012, 01:24:38 PM »
Interesting point that Mustachian people would rather do stuff than hire someone to do it for them (even if it isn't always purely cost efficient).  Sometimes it's better to go through the experience of doing something yourself rather than specializing in your job and paying someone else do things.

AJ

  • Pencil Stache
  • ****
  • Posts: 906
  • Age: 36
  • Location: Oregon
Re: Case Study: advice for parents raising two daycare-age kids?
« Reply #18 on: September 14, 2012, 01:48:10 PM »
I guess I just don't see outside influences as an inherently bad thing. I was really happy with the daycare that my foster daughter was in, and they taught her loads of great things. If my only option was putting my kids in the care of someone who's values were starkly different than mine, then that might be different. But there are loads of people who live differently than I choose to that will influence my children's lives (my in-laws, for one).

I think we all agree that doing things yourself is a worthy goal, but even with 2 SAHPs, MMM still put his kid in paid pre-school and public kindergarten.

$_gone_amok

  • Stubble
  • **
  • Posts: 149
Re: Case Study: advice for parents raising two daycare-age kids?
« Reply #19 on: September 14, 2012, 01:49:54 PM »

It may not be better/worse overall, but you have to consider the fact that with little kids in day care, 80% of their free time will be in someone else's care and the kids will be absorbing their values more than yours.  At least that is how we see/saw it and why we made the decision we did.


I can relate that kids pick up a ridiculous amount of new information everyday from teachers and friends at daycare/school.  I have no problem having my kids to learn and absorb as much as they could while still follow a core family value that we instill into them at an early age.

I think the key is to find a good daycare and teacher who understands and shares your educational philosophy as well as innate values.  There is often a price attached to better schools and teachers, but for parents who choose to send their young kids to daycare, the price is often worth it.


From a financial point of view, there's nothing wrong to hire someone to do something that they are much better at.  For example, if you make $100/hr at your job and want to build a $50K log cabin, would you pay someone $25/hr to do it for you or would you rather to build the house yourself?


sockmunkee

  • 5 O'Clock Shadow
  • *
  • Posts: 17
Re: Case Study: advice for parents raising two daycare-age kids?
« Reply #20 on: September 14, 2012, 02:24:08 PM »
I think the key is to find a good daycare and teacher who understands and shares your educational philosophy as well as innate values.  There is often a price attached to better schools and teachers, but for parents who choose to send their young kids to daycare, the price is often worth it.


From a financial point of view, there's nothing wrong to hire someone to do something that they are much better at.  For example, if you make $100/hr at your job and want to build a $50K log cabin, would you pay someone $25/hr to do it for you or would you rather to build the house yourself?


I've been on the outsourcing kick (parenting, landscaping, everything) for a while but am slowly learning the MMM ways of insourcing.  And if I were to do it over again, I'd have waited to have kids.  That being said, my current FI goal is to stop working full time by early 40s (I am currently 29) so I can be involved with my kids in their early teens. 

That brings up another point though.  Anyone know if MMM plans on paying for his son's education?  I know he worked his way through college, and maybe this is the plan for most mustachian parents, but I'd also love to have some money set aside for both kids - at least enough to pay for a semester or two of tuition...

Portland Man

  • 5 O'Clock Shadow
  • *
  • Posts: 23
  • Location: PDX, OR
Re: Case Study: advice for parents raising two daycare-age kids?
« Reply #21 on: September 14, 2012, 03:06:48 PM »


You're conflating staying at home with DIY-ing everything. Nothing in the OPs note indicated that he hires someone else to do everything for him.

My point is - hiring someone to be your child's primary caregiver IS hiring someone to do (a very very large) something for him.

Wasn't meant to sound "judgy", just wanted to point out that for most people the decision isn't so much financial as personal (though obviously if you don't make a decent wage, you aren't getting ahead with 2+ kids in day care).

It may not be better/worse overall, but you have to consider the fact that with little kids in day care, 80% of their free time will be in someone else's care and the kids will be absorbing their values more than yours.  At least that is how we see/saw it and why we made the decision we did.

Everyone has to decide for themselves and obviously a wife that is forced to stay home when she isn't on board with it is going to be pretty miserable.

Total agreement.  I'm not trying to pass judgement, I'm just saying that it's more a priorities/values decision than a financial decision.
« Last Edit: September 14, 2012, 03:08:24 PM by Portland Man »

$_gone_amok

  • Stubble
  • **
  • Posts: 149
Re: Case Study: advice for parents raising two daycare-age kids?
« Reply #22 on: September 14, 2012, 03:55:21 PM »
I think the key is to find a good daycare and teacher who understands and shares your educational philosophy as well as innate values.  There is often a price attached to better schools and teachers, but for parents who choose to send their young kids to daycare, the price is often worth it.


From a financial point of view, there's nothing wrong to hire someone to do something that they are much better at.  For example, if you make $100/hr at your job and want to build a $50K log cabin, would you pay someone $25/hr to do it for you or would you rather to build the house yourself?


I've been on the outsourcing kick (parenting, landscaping, everything) for a while but am slowly learning the MMM ways of insourcing.  And if I were to do it over again, I'd have waited to have kids.  That being said, my current FI goal is to stop working full time by early 40s (I am currently 29) so I can be involved with my kids in their early teens. 

That brings up another point though.  Anyone know if MMM plans on paying for his son's education?  I know he worked his way through college, and maybe this is the plan for most mustachian parents, but I'd also love to have some money set aside for both kids - at least enough to pay for a semester or two of tuition...


We are in our early 30's and our goal is similar to yours. I don't know about MMM's plan but we intend to pay for our kids's college education. We have had good experience with Utah's Vanguard 529 plan.


bogart

  • Handlebar Stache
  • *****
  • Posts: 1045
Re: Case Study: advice for parents raising two daycare-age kids?
« Reply #23 on: September 17, 2012, 07:32:28 AM »
Assorted thoughts, some (OK, many) in reaction to comments above this one.

WOHM to a kindergartener here.  From 2m to 3y DS was in paid care part-time, with grandparents part-time, and with parents (one or both) part-time.  At 3, his dad (my DH) retired.  The care situation really didn't change except that DH took on a bit more and I took on a bit less.  The year DS turned 4 we went to more paid care and less grandparent care.  DS is now in public kindergarten.

I cannot begin to describe how valuable the paid care we have made use of has been to us.  We are fortunate to live in an area where we have had access to a number of good paid care institutions/setups (we've used two in-home and one "institutional" settings).  Though others (above) claim it is straightforward to find opportunities to interact with other kids and this might be true for many parents, in our community (many 2WOHPs) and given our personalities (not that keen on playdates, playgroups) etc. we have not found this to be true.  And of course having just the 1 kid (not by choice) we do not provide that (inherently) in the home, either.  Giving my kid access to a fairly stable "playgroup" (well, really several different ones over the years) has been one of the best benefits of every care/school setting he's been in so far up to and including kindergarten.  Our experience in this regard has been very different from @KDMS's, so obviously YMMV depending on the daycare options available to you -- but it sounds (?) like you have a setup you are already happy with? 

Our use of paid (and now public) schooling notwithstanding, I'd challenge anyone who says that we're not our son's primary caregivers.  We are, of course, engaged with the care provision and providers, as well as with our son himself.  But Alandjackson's experience that using paid care results in the kids spending 80% of their free time in someone else's care doesn't jibe with mine; my son sleeps about 10 hours/day (if I'm lucky!), so doing the math and ignoring those hours, 8 hours 5 days/week in daycare (we've never actually used that much, but taking it as "typical," and assuming no holidays/family vacations/sick days) would provide us with on average a paltry 8.25 hours/day (on average; less on the 5 days/week he'd be in daycare, of course) to interact with him.  Bluntly, this is more time than I personally want to interact with a preschooler/kindergartner, so using care-provided-by-others has not left me feeling I don't get enough time with my son.  There are, of course, moments of "lumpiness" -- DS and I are usually together too much time on Saturdays, when dad plays golf, and not enough on one or two weekdays each week, when I work late or opt to go out in an evening for some "me" time (or DH and I go out for a, gasp, date).  But we muddle along and do just fine on average.

I often see folks advocating "[someone, usually mom] staying home while the kids are small," and while that's great if it's what you want to do (and can attain; sadly, it's not an option for everyone who wants to do it), it often seems to me to be counterbalanced by the idea (rarely explicitly stated) that you can "return to your career once the kids are in school."  My take on that implicit proposition is that it's a gross oversimplification; speaking as someone who's had teenaged stepkids (as well as now a LO), kids do not cease to need supervision, care, attention during daytime ("workday") hours as they get older, and unlike LOs, good quality paid care isn't readily available (again, as it is in our area, YMMV).  I'd much rather balance some work and some play over my kids' childhood/lifetime than front-load it (and honestly in my experience kids are much more devoted to the parents' perspective and guidance in the early years and much more eager to be shaped by outside forces in later ones, so, again, if the focus is on whose values kids are absorbing, I'd say there's reason to make sure you don't front-load the early years too much (which of course isn't making any argument at all against being a SAHP at any stage, including throughout your kids' entire childhoods.  It's just saying that valuing having more time with your kids early versus late may not be as obvious a choice as it often seems to be presented as being.)).

OK.  Off my soapbox.  Mostly I'd just say to the OP (as many others have) that the finances don't make the case that either you or your wife should stay home to avoid/reduce daycare costs, so you should talk about what you want in terms of balancing time-for-work and time-with-kids and find a way to achieve that.  My family has had good luck using part-time care (our first setup was 2 8/hour days week; the second was 4 4/hour days, and the third a blend of 2 4/hour days at the same 4-hour place and 2 8/hour days at another), but it's harder to find (around us anyway) than full-time setups, and we have paid a premium (seen as a per-hour or per-day rate) relative to purchasing full-time care.  Plus I wouldn't advocate the half-day thing as time-efficient because honestly by the time you drop the kid off and pick up, best case you are down to 3.5 hours of no-kid time, which just is hardly enough time to shower (kidding, kidding!) (however, if you can arrange for one of you to drop off and the other to pick up and have flexible work schedules, this could be a great option).  With two kids, you'll likely want to prioritize finding a place they can both go, and be dropped off/picked up at the same time, so that's something to factor in that may constrain your choices. 

GL finding an arrangement that works for you. 
« Last Edit: September 17, 2012, 07:34:38 AM by bogart »

TheDude

  • Bristles
  • ***
  • Posts: 467
Re: Case Study: advice for parents raising two daycare-age kids?
« Reply #24 on: September 17, 2012, 10:37:01 AM »
Man lots of opinions in this article.

Some quick notes about you budget. You look over insured We pay $77.50 /month for car and life insurance. That's 500,000 in life on both my wife and I and liability only on one car and full coverage on the other car. Dont couple life insurance with car insurance. Independent term life insurance from the likes of ING is a way better deal than I have found from the big personal property insurers. Here's a good site to get quotes.
http://www.quickquote.com/

You cell phone still seem high to me. I think you should look into page plus. I would say this plan would work.
http://www.pagepluscellular.com/Plans/Talk%20n%20Text%201200.aspx

Those two actions could save you about 200 a month.


bo_knows

  • Pencil Stache
  • ****
  • Posts: 814
  • Age: 38
  • Location: Fairfax, VA, USA
    • The Crowdsourced FIRE simulator
Re: Case Study: advice for parents raising two daycare-age kids?
« Reply #25 on: September 19, 2012, 08:24:35 AM »
A lot of people have already said it, but I will chime in as well:  It's all about priorities.

Wife and I live in an expensive city (DC suburbs), but earn ~$170k/yr gross.  When our now 5-mo old son came along, we ran the financial numbers and factored in the psychological factors of at-home vs. daycare.  We managed to jury-rig our schedules together to have no daycare.

- Wife went to 60% full-time. Goes into the office on Mon/Fri for full days, works a total of 8hrs at home between Tues-Thurs while watching the boy.
- Mother-in-law watches the boy on Monday while we're both at work.
- I work 4 10hr days Mon-Thurs and watch the boy on Friday while my wife is at work.

In an expensive city where daycare would be $1000-1400/mo, this is just about a financial wash.  We thought that it was important to spend a lot of time with him in the early years though, and our jobs allow it.  When he is old enough for pre-school (is that 3?), he'll go to that and we'll re-adjust our work schedules accordingly.

Your child can get social interaction through things other than daycare. Playgroups, kids events at the local library, etc.  It's just a matter of what you think is best.

twinge

  • Bristles
  • ***
  • Posts: 326
Re: Case Study: advice for parents raising two daycare-age kids?
« Reply #26 on: September 19, 2012, 01:29:56 PM »
Quote
When our now 5-mo old son came along, we ran the financial numbers and factored in the psychological factors of at-home vs. daycare.  We managed to jury-rig our schedules together to have no daycare.

This is exactly what we've done with both our kids until they were 2.5 years old at which point they went to daycare/preschool.  It seemed to be the right balance of enjoying our children's babyhood, keeping careers in flow in the process, and establishing that both my husband and I are "primary caregivers" even though I was nursing.  But I view it as sadly as a privilege because I know so many people don't have this kind of flexibility in their jobs.  I also have to say it was somewhat challenging to have both parents working  nearly full-time around also caring for children (we didn't have a mother-in-law nearby to take a day--and never had a babysitter--not out of any reason, just never did it).  Two and a half years of this maxed us out and would have been probably damaging to our relationship if we had continued.   There was a decent-sized gap between our kids so we were rejuvenated to do it again.

bo_knows

  • Pencil Stache
  • ****
  • Posts: 814
  • Age: 38
  • Location: Fairfax, VA, USA
    • The Crowdsourced FIRE simulator
Re: Case Study: advice for parents raising two daycare-age kids?
« Reply #27 on: September 19, 2012, 01:37:35 PM »
Quote
When our now 5-mo old son came along, we ran the financial numbers and factored in the psychological factors of at-home vs. daycare.  We managed to jury-rig our schedules together to have no daycare.

This is exactly what we've done with both our kids until they were 2.5 years old at which point they went to daycare/preschool.  It seemed to be the right balance of enjoying our children's babyhood, keeping careers in flow in the process, and establishing that both my husband and I are "primary caregivers" even though I was nursing.  But I view it as sadly as a privilege because I know so many people don't have this kind of flexibility in their jobs.  I also have to say it was somewhat challenging to have both parents working  nearly full-time around also caring for children (we didn't have a mother-in-law nearby to take a day--and never had a babysitter--not out of any reason, just never did it).  Two and a half years of this maxed us out and would have been probably damaging to our relationship if we had continued.   There was a decent-sized gap between our kids so we were rejuvenated to do it again.

It certainly feels like more work, that's for sure... especially since I was a stickler for 8hr days and now I'm regularly pulling 10-11hr days (to compensate for doctors appointments, etc).  Though, I definitely see it as a privilege also.

CNM

  • Bristles
  • ***
  • Posts: 478
Re: Case Study: advice for parents raising two daycare-age kids?
« Reply #28 on: September 20, 2012, 01:10:31 PM »
I apologize if I missed it, but why aren't you going to quit your job to stay home with the kids?  Your wife likes her job, what about you?

freelancerNfulltimer

  • Stubble
  • **
  • Posts: 157
Re: Case Study: advice for parents raising two daycare-age kids?
« Reply #29 on: September 21, 2012, 11:32:54 AM »
If you wife works at home why can't she watch the kids at home while she works? I know people who do this. For really busy days maybe you could hire a part-time nanny to come once in a while?

bo_knows

  • Pencil Stache
  • ****
  • Posts: 814
  • Age: 38
  • Location: Fairfax, VA, USA
    • The Crowdsourced FIRE simulator
Re: Case Study: advice for parents raising two daycare-age kids?
« Reply #30 on: September 21, 2012, 01:54:14 PM »
If you wife works at home why can't she watch the kids at home while she works? I know people who do this. For really busy days maybe you could hire a part-time nanny to come once in a while?


People that care for their kids WHILE they are working from home, are not getting any work done at all. It's a lie.

$_gone_amok

  • Stubble
  • **
  • Posts: 149
Re: Case Study: advice for parents raising two daycare-age kids?
« Reply #31 on: September 21, 2012, 04:01:35 PM »
If you wife works at home why can't she watch the kids at home while she works? I know people who do this. For really busy days maybe you could hire a part-time nanny to come once in a while?


People that care for their kids WHILE they are working from home, are not getting any work done at all. It's a lie.

Very true.

twinge

  • Bristles
  • ***
  • Posts: 326
Re: Case Study: advice for parents raising two daycare-age kids?
« Reply #32 on: September 22, 2012, 04:42:40 AM »
Quote
People that care for their kids WHILE they are working from home, are not getting any work done at all. It's a lie.

I would say it's not a total lie, but in my experience it's not simple--and the work isn't actually done while caring for the child.  When I worked from home with my child present a few days a week it was based on my very flexible job where about 50% involves my needing to accomplish a range of things ( write papers/reports, prepare presentations, write proposals, do data analyses etc.) and it didn't matter when/where I do these things--just as long as they were good and met deadlines.   I did this kind of work while caring for a child at home, but it meant I woke up at 4AM and worked until 6:30 AM when everyone woke up.  Did maybe 1.5 hours of work at naptime, and then I'd squeeze in another 1.5 after bedtime.  I'd piece away at things occasionally while my child was occupied (or on my lap if there was a tight deadline!) but I wouldn't think of that as reliable work time. So I would say I could consistently put in 5-6 hours a day while staying at home with a child.  And then I would use weekends to "catch-up" on the slack from that.  For me 4 AM-6:30 AM is an extraordinarily productive and mentally clear time and I can often accomplish more in those 2.5 hours than I can working twice as long in the afternoon, but I would not expect that is the case for most people. And I couldn't have done that in the first 6 months when I had to nurse throughout the night. 
« Last Edit: September 22, 2012, 04:44:56 AM by twinge »

It Figures

  • Guest
Re: Case Study: advice for parents raising two daycare-age kids?
« Reply #33 on: September 22, 2012, 08:06:34 AM »
What benefit does the child get from a stay at home parent?  I think it is especially important in a Mustachian type lifestyle, as you are teaching BY DOING the sort of values that are espoused in this website.  By doing rather than hiring, you are setting the kid up for a lifetime of kicking ass, where as paying someone else to take care of them shows them that it's often easier and more convenient to buy a solution to your problems.

You're conflating staying at home with DIY-ing everything. Nothing in the OPs note indicated that he hires someone else to do everything for him.

I think that raising your own children is the ultimate DIY! 

I know that this is a site about Financial Independence, but since the issue of raising children has come up in this manner, i just have to ask, if the thought of staying home to raise your children bothers you or causes resentment, or if a big financial bonus is more important to you than raising the kids you chose to bring into this world, why did you have children in the first place? 

twinge

  • Bristles
  • ***
  • Posts: 326
Re: Case Study: advice for parents raising two daycare-age kids?
« Reply #34 on: September 22, 2012, 09:19:49 AM »
Quote
I think that raising your own children is the ultimate DIY!

I know that this is a site about Financial Independence, but since the issue of raising children has come up in this manner, i just have to ask, if the thought of staying home to raise your children bothers you or causes resentment, or if a big financial bonus is more important to you than raising the kids you chose to bring into this world, why did you have children in the first place? 


I think this inference that if you aren't with your children 24/7 you aren't raising them is a muddled idea.  If you choose to use daycare so that you can do the very valuable things of providing a living, providing health insurance, modeling being a part of the working world,  enjoying the challenge of your career and thus growing as a person, you are raising your children.   People can and do put a lot of thought into who they think would be a good caregiver, and where would be a good learning environment for their children for the full-time 40-45 hours of the 168 hours of the week and that careful choice is a meaningful part of raising your children.  When you decide where to live for schooling you are raising your children even if you aren't physically with them when you are in school each day.  I think thoughtful ways of engaging your children in the social world without you could be argued as just as important to "raising them" as being home all the time. 

NestEggChick (formerly PFgal)

  • Stubble
  • **
  • Posts: 238
  • Location: Boston-ish, MA
    • Nest Egg Chick
Re: Case Study: advice for parents raising two daycare-age kids?
« Reply #35 on: September 22, 2012, 09:26:47 AM »
From the way you presented thing, it sounds like you already know what you'd like to do and you're just checking to make sure you're not missing a better option.  It sounds like you want to both continue working and put both kids into daycare.  The number support it, so that's what you should do because that's what will work for your family.  Congratulations on having a great, workable option!

I'd like to make a few suggestions.  First, see if you can find daycare that will give a sibling discount.

You asked about lowering the cost of groceries.  Obviously, you'll be limited while your wife is dealing with morning (or all day) sickness, but aside from that, I can tell you what worked for me: doubling the fruits and vegetables that I ate.  I did this for health reasons, but I was shocked at how my grocery budget went down!  While produce is expensive, you get a lot more nutrients for your $, so you end up eating less of everything else, and in the end it will cost less.  Also, try not to "stock up" for a while.  Buy perishables as you need them, but for non-perishables, try to use up what's already in your kitchen for a while.

As for moving to a bigger home, you might want to rethink just how big of a home you need.  My parents bought a 3 bed/2 bath house more than 30 years ago.  At the time, that was considered a great house to raise a family in, and it worked well for my parents, my sister, and me.  Now they're looking to sell, and it's considered a "starter home."  In general, society's standards have changed when it comes to how much house people think they "need," so it might help to step back and think about what your needs really are.  Only you and your family know that, so I'm not suggesting that a bigger house isn't the right move for you.  I'm only suggesting that you should be sure of that before you buy it.

Good luck with everything!