Author Topic: Dilemma: SAHM or early retirement?  (Read 7198 times)

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Dilemma: SAHM or early retirement?
« on: February 21, 2013, 08:03:00 AM »
I'm new here and sorry if this is in the wrong spot. 
My dilemma is tring to decide if I should quit/ work minimal hours to spend time with my young children or work to save for early retirement.  I know without going into a lot of details it may be difficult to get personalized advice here, but I'm looking for just general experiences and recs.  My oldest is starting school this year and with calculations based on our annual expenses/ savings have calculated about 14 years to save enough for me to totally quit, assuming DH continues to work to pay the mortgage and our loans.
A little background: DH and I are in our late 30s.  We have a lot of student debt from professional school (mine is 235,000 with interest from 2.5-5%; DH's Is 90,000 now after loan repayments).  Our mortgage is 290,000 at 4.25%.  Our income is good but I hesitate to say here on public boards.
I'm working part time now and the salary pays my student loan, daycare, and extra money.
DH and I could get by with me not working, but then we will likely not have room to save much for retirement as we will have to work at my debts still. 
I'm wondering if I should work now to save for our retirement or work later and longer so I can be with them now?  Also we were hoping to minimize their student debt so the same thing doesn't happen to them! 
I've always been frugal but over the years our spending has drifted upwards and we can probably cut expenses a lot (we live in a very expensive state in the country).  But, on the other hand,  I have trouble convincing DH to give up things he enjoys (cable, expensive phones, minivan usage for one person, wants to live here in this expensive state, etc).
So what are your experiences?  Do you stay home with young kids but sacrifice retirement savings (while trying to cut expenses, of course!).  Or work hard while kids are young to stop working early even though kids will be grown by then?
Alternatively I may cut hours even more but then the salary will be eaten up by daycare totally.  If I cut hours the finances will probably not justify working but it will help me keep the professional status for future earnings
Sorry so long and thanks for any advice!

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Re: Dilemma: SAHM or early retirement?
« Reply #1 on: February 21, 2013, 08:06:52 AM »
http://www.mrmoneymustache.com/2012/04/18/news-flash-your-debt-is-an-emergency/

If you can make enough money working, to be more than breaking even on the daycare and other costs associated with working, I think you need to do that.

bo_knows

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Re: Dilemma: SAHM or early retirement?
« Reply #2 on: February 21, 2013, 08:16:49 AM »
http://www.mrmoneymustache.com/2012/04/18/news-flash-your-debt-is-an-emergency/

If you can make enough money working, to be more than breaking even on the daycare and other costs associated with working, I think you need to do that.

I find it hard to believe that someone with a degree from a profession school (law? medical? dental?) couldn't break even on daycare...

That being said, OP, it's really a matter of personal choice here.  I have a 10mo old son. We had a similar decision.  My wife's employer is very flexible with part-time employment, so we chose to rejigger our work schedule, have my wife drop to 60% full time (which includes some working from home), and make it so that I have off on Friday's to watch the boy.... just to keep him out of daycare, and spend as much precious time as we can with him.  We've managed to decrease spending in a lot of areas, and our retirement savings don't suffer TOO much.

I've very much enjoyed being at home with my son, and my wife has too.  It's a lot of juggling, but you don't get this time back.  When he's off in school full time, we can both be working full-time again.

boy_bye

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Re: Dilemma: SAHM or early retirement?
« Reply #3 on: February 21, 2013, 08:23:32 AM »
doesn't sound like you and your husband are on the same page with financial and family goals. to me, that's the first thing to address. what do you both want out of life, and how do you think you can get it?

the concern is that you give up your (lucrative-sounding) career to stay home with the kids and your family's spending keeps ramping up and you never get out of debt or hit the milestones you want to hit.

staying at home could be a great idea if you guys can get it together to drop the stupid expenses, and if you see part of your "job" as learning to hang on to some of the money husband is bringing in.

but if you quit your job and nothing gets dialed down on the financial side, you could really be screwing up your future as well as your kids' future.

also you are only working part-time now. what if you went the opposite way and went to full-time just to pull in as much cash as possible? depending on your income, you might be able to knock out those debts really quickly and then be able to take your hours back down again in a few years.

whatever you decide, getting on the same page with your husband is the first step, i think.
« Last Edit: February 21, 2013, 08:26:28 AM by madgeylou »

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Re: Dilemma: SAHM or early retirement?
« Reply #4 on: February 21, 2013, 08:37:44 AM »
Thanks for the great responses so far!  If I am SAHM, debts will still all get paid, but retirement savings would be reduced.  Daycare expenses (lowest in our community) are $2,000/mth!! 
It's a new idea for me to work FT for the salary to pay down loans quickly.  I will have to ponder that, though it would be hard as we also have a young infant and FT in my profession is 60 hrs/wk.  My PT position is close to 35 hrs / week.  DH works about 55 hrs/ week.
ITA with discussions with DH regarding finances.  He is amenable to discussing and changing them and when I show him the numbers he gives a little bit.  Honestly, most of the spending is likely from me, as I buy most consumer stuff.  I just reinstalled quicken to go over finances again.  I'm not where I should be regarding finances, just starting this whole process.

boy_bye

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Re: Dilemma: SAHM or early retirement?
« Reply #5 on: February 21, 2013, 08:49:21 AM »
Thanks for the great responses so far!  If I am SAHM, debts will still all get paid, but retirement savings would be reduced.  Daycare expenses (lowest in our community) are $2,000/mth!! 
It's a new idea for me to work FT for the salary to pay down loans quickly.  I will have to ponder that, though it would be hard as we also have a young infant and FT in my profession is 60 hrs/wk.  My PT position is close to 35 hrs / week.  DH works about 55 hrs/ week.
ITA with discussions with DH regarding finances.  He is amenable to discussing and changing them and when I show him the numbers he gives a little bit.  Honestly, most of the spending is likely from me, as I buy most consumer stuff.  I just reinstalled quicken to go over finances again.  I'm not where I should be regarding finances, just starting this whole process.

maybe try mint.com? it's a little less labor-intensive than quicken as i recall, and allows you to start seeing trends really quickly. when i first signed up for it i was like "OMG I SPENT $500 GOING OUT THIS MONTH!?!?!?!" and things started to rapidly change. if your husband responds well to the math, that's a good thing to know. the important thing is that you are looking at all of this and starting to make some intentional decisions instead of just going with the flow. you get a high-five for that. :)

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Re: Dilemma: SAHM or early retirement?
« Reply #6 on: February 21, 2013, 09:11:10 AM »
Unless you have more children in the years ahead, it seems you would be taking no more than 5 years off, until the baby goes to school. 

It just comes down to your personality and family style.  If being at home truly makes you nuts, and you miss the structure and stimulus of the office, listen to that impulse.  But, if work makes you feel like you are short-changing the kids, letting their personalities be shaped by daycare rather than you, well, you have to listen to that. 

Money, college savings, retirement -- all important, sure, but so is the time and effort you give to your kids.  Don't undervalue the important work of living just because it's not paid.  Also, consider alternatives: can you consult from home?  work a few nights?  teach as an adjunct in your field?

Good luck to you; this is a hard choice for everyone. 

TN_Steve

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Re: Dilemma: SAHM or early retirement?
« Reply #7 on: February 21, 2013, 09:37:36 AM »
Been there, done that, albeit as SAHD.  We didn't have the horrendous student loans because I went to a low ranked school for free (and wife hit med school in the 80's, rather than today), which makes my experience less than definitive for you, but FWIW, it worked out great for us.  Yeah, we are past 50 and still working for several more years, but I kind-of-sorta was "retired" for the 15 years I was home with the kids and teaching as an adjunct.  No way that I'm aware of to do truly part-time work as a commercial litigator, if that is what you are doing (guessing based on hints in your post). 

I assume, like us, that daycare doesn't work for you because of state and/or facility limits on hour many hours a day/week one can keep the kids in even a 24/7 day care.  Plus, having 24/7 oncall nanny is basically needed if one of you is in a medical field that requires periodic middle of the night runs to hospital and the other travels in erratic manner for work.   Because of this, child care is real expensive and most of it is after-tax dollars.

We found that there wasn't really that much of a net income hit once we dumped the nanny, got rid of the extra car that she drove, erased work-related expenses of one lawyer, and had the SAHD/M can take on many tasks that we formerly had to hire out.

To avoid going all complainy pants on the associated costs of having two full-time professionals with young kids (I agree, it was a choice we quite willingly made!), I'll stop here.  :-)

Oh, one other thing--it is much easier to schedule family driving trips or other vacations when you only have one work schedule to juggle.

Shoot me a PM if you'd like to discuss by email or chat. 

Steve

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Re: Dilemma: SAHM or early retirement?
« Reply #8 on: February 21, 2013, 09:59:11 AM »
Regarding tracking your spending I'm not a big fan of quicken or mint too many features you don't need. Instead I went with a simple excel budget. If you don't have time to it yourself there are loads to be downloaded.

While there is some great stuff here in the forums reading all of MMMs blog posts would be a great starting point. His lbog is a treasure trove information and ideas. I can't tell you how much his posts have helped me.

Good luck and remember life is much better without the stress of debt and finances hanging over.

rob

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Re: Dilemma: SAHM or early retirement?
« Reply #9 on: February 21, 2013, 10:46:03 AM »
Thanks again for more quick and thoughtful responses! 
I am considering doing some part time stuff from home if I can, but career options are limited for me.  I am considering working more a little later when school is full time (though our schools are closed 40 days or have half days during the school year, not including summer break) and less now when daycare is such a burden and kids are sick often, etc.
I'm using quicken only because I got it last year and it's set up somewhat.  I don't like it much, but wonder about time involved in switching programs to a new one.  I've tried excel but all purchases are on debit card so it's easy to download automatically instead of going through by hand.
Thankfully we've avoided a lot of services many people use like housecleaning, lawn, others.  But with our crazy schedule I am pretty worn out.
I'm currently going though all blogs (just found this website a few days ago) and taking notes.  I'm updating our spending and budget and trying to get together some options to discuss w DH this weekend.

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Re: Dilemma: SAHM or early retirement?
« Reply #10 on: February 21, 2013, 10:56:47 AM »
What quality of life would your family have if you both worked 55+hours a week?

I took extra time off to be with my kids.  I found that the times that we both worked full time to be some of the worst.  Stuck in traffic getting to and from daycare, fast put-together dinners while kids screamed, trying to shove all your errands into the weekend.  I know that some people can manage it with no issues and even enjoy it, but we couldnt.

I go back part time soon and I am even a little worried about that.

mmmj

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Re: Dilemma: SAHM or early retirement?
« Reply #11 on: February 21, 2013, 12:21:17 PM »
I'm struggling with the same dilemma.  Right now my husband and I both work full time and our 6 month old is in day care part time (due to a flexible schedule and help from my family).  We hope to have number two in the next year or so and then day care will be close to $3,000 a month because both would likely need to go in full time (yes, that is completely ridiculous).   So, I'm considering quitting my job and staying home for a few years.  What I struggle with is going back to work and starting again in the workforce, at the bottom once the kids are in school full time.  However, I've just recently decided it will be worth it to have that time with my children.  Its certainly a tough decision.

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Re: Dilemma: SAHM or early retirement?
« Reply #12 on: February 21, 2013, 02:53:20 PM »
Thanks for the great responses so far!  If I am SAHM, debts will still all get paid, but retirement savings would be reduced.  Daycare expenses (lowest in our community) are $2,000/mth!! 

It sounds like a business opportunity for a home-based day care service offered, by you, for the low-low price of $1500.

mm1970

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Re: Dilemma: SAHM or early retirement?
« Reply #13 on: February 21, 2013, 07:56:37 PM »
Hmm...I live in California.  It's expensive.  Daycare is expensive, but not $2000/month (more along the lines of $1400/month for an infant).

When my oldest was a baby, I worked full time. Burned the candle at both ends.  I was sick as a dog that whole winter.  I had about 30 healthy days in 5 months from November through March.

Now I have another infant.  I learned from my mistakes. I am working part time.  I make enough to cover daycare, expenses, and some savings.  I could afford to quit, but I really don't want to.  Our finances would be much better if I didn't take that 20% pay cut.  But it's much more important to me to spend time with my kids and be sane...to not have to worry about working late into the evening to "make up" lost time that happens when DH travels.

Our only debt is our mortgage, however.  If I had $200,000 in student loan debt, I would not quit.

If you want to work on your dh, you may have to do it a little bit at a time. I tried to get my husband to give up cable.  He likes TV. It took a couple of years, but eventually the stars aligned: 1. we had less time to watch because of the kiddo, 2. there were more and more options on Netflix and Hulu, 3. I stopped watching TV with him.  So he decided it was time (RIGHT when I was going out on maternity leave.  Hmmm.)

The work and save vs. SAH debate is always a tough one.

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Re: Dilemma: SAHM or early retirement?
« Reply #14 on: February 22, 2013, 01:56:18 AM »
On the tackling expenses thing, lead by example.

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Re: Dilemma: SAHM or early retirement?
« Reply #15 on: February 22, 2013, 08:52:29 AM »
Part-time work is a nice option to have, especially if you're actually making a little money from it.  It is probably a good tradeoff to make for now, while you're still paying down so much debt.

I am a full-time SAHM now, and we're not saving much cash for retirement at the moment, but I'm constantly learning new ways to live well on less money--which is a different kind of investment, that should pay off well for many years, and help us to retire sooner and on much less than we would otherwise need. 

We have put having children ahead of many other potential priorities and financial goals, including buying a house and early retirement.  We did pay off our student loans as quickly as we could, which has been essential for us to afford to live on one moderate income.  You and your husband will have to work out your own priorities for your own situation; it helps a lot to have both parents pulling in the same general direction.