First kid is on the way. What should I do next?

[jallred22]

Hi Mustachians,

I am new to the community although I have been living on the Dave Ramsey plan for a couple years now. I stumbled across MMM and now I am here.

Background: Married, both of us are 29 years old. We are debt free. No student loans. We have a heavy emergency fund and 20% down for our first house. We have one car that is paid off. Live in an apt (contract ends in March). No cable and on a cheap cell phone plan (thank you MMM). We live in SLC, UT. My wife and I both have Recreation Management Degrees. We have no family in the area. My current job has been contributing to my retirement; however it does not become vested until Feb of 2017. We figure it will be about 12-15K.

What's Changed? We have our first child on the way (due Aug). We are thrilled. We are toying around with a lot of different options and would like your opinion.

The goal would be to get my salary into the 75K (currently in low 40s) range with my wife as a stay at home Mom. We would like to save to 100% down on our house in the 160-180K range however we could/would move sooner as well.

I have a lot of options on which way to go. I am wondering what others are thinking or if there is something out there I am not thinking.

Option 1) My wife becomes a stay at home Mom. My salary is enough to cover everything but it doesn't leave much breathing room to continue to save as aggressively. It could be an experiment to see if it works. However, this will not be our last child. I rather make sacrifices now then when a second comes along we can have my income situated where she doesn't work.
Option 2) Try to have my wife continue to work. There could be a chance she could work from home a few days a week. This could be one of the best options. We could try to find her work that is from home around 25 hrs/week.
Option 3) Try to get me to move up somewhere. This has been difficult. My field just doesnt have the opportunities to move up in SLC area. We do love the area however we would move if the price was right. The worry is leaving money on the table that could be vested in Feb 2017.
Option 4) Jump fields. I work in municipal government. I am just not sure if I am built for this. I am a go getter, personable, and really am motivated to make changes. I have looked into real estate. The statistics show that most millionaires are small business owners. I just wouldn't even know where to start.
Option 5) My wife is passionate about animals. We have looked at starting small side business and have her focus on just generating income. I would stay at my job to provide income and insurance. This way she could leave work and work from home, watching kid, and drop off with me to be with clients from time to time.
Option 6) Go back to school for MBA. I actually like this option. However, I dont want pay 30K for one (cheapest in the area from one of the major university nearby). There is potential for this to help me in my passion in Recreation. In the last 7 months I have interviewed and finished in the top 3 or 4 in 3 manager positions and was beat out by those with Masters. Yes there have only been 3 managers jobs that opened in the state over the last 7 months. That just plain SUCKS.
Option 7) Some kind of combination of the options listed above.

Thanks in advance!
JA

[little_brown_dog]

First I would make sure you dont mix up major career changes with the decision to have her stay at home. Both are big changes and you don't want to have one dependent on the other. You sound like you know how to manage your money which is the hardest part. Starting immediately I would test out living on one income. See exactly how you do over the next few months. Dont assume based on numbers alone that you can make it work. You need to test drive it for a few months to really know. This is the surest way to know how well you will do if you have a sahm. Save any income of hers during this time as an extra cushion for later. We did this before we had our daughter and it was the best decision we made in terms of preparing for baby. 

Working from home is very difficult with a young infant due to their neverending feeding schedule. Make sure that whatever she does can be done whenever, and does not require her to be available during set hours. When a baby needs to eat every 2 hours, it is impossible to do most types of work to an employers satisfaction because the employee is never truly available. So many new parents completely over estimate how much they will be able to do with an infant around....I would not recommend committing to work from home or starting a business until you actually have the baby and can see what you can handle. I am a sahm and while my schedule is more flexible than a work day, I actually dont have any more free time in a given 24hr period than when I was working because the baby always needs something. The free hours I have are scattered throughout the day but not necessarily more numerous.

[FLBiker]

I'm sure you'll get some good advice here, but you're in a good spot.  Your "worst case" scenario (assuming you folks decide that your wife is a SAHM) is living on your salary and being fine, just not contributing aggressively to retirement for the time she's SAHM.  That's not bad at all.

My wife and I recently had our first (she'll be 1 tomorrow) and my wife is a SAHM.  She'll probably stay home another year or so, but we'll see.  Folks I work with have been shocked that we can afford it, and made comments like "yeah, but she'll have to go back to work eventually" etc.  The freedom that comes from living frugally can't be beat.  That freedom is the goal, and it doesn't necessarily mean early retirement.

For us, having my wife be a SAHM initially has absolutely been the right call.  For one thing, breastfeeding was challenging, and there's absolutely no way we would have stuck with it if my wife was also working.  And I absolutely agree with l_b_d -- don't figure on getting a bunch of stuff done @ home with an infant.  My wife and I were both home the first month, and I had in my head that I'd get some stuff done around the house.  I did absolutely nothing not directly related to childcare (and it was wonderful!).

[Easye418]

I would not go for Option 6.  It sounds like it won't be worth the pay off.

Looking back on my MBA, I went the cheap route and got a mid tier MBA... It did wonders for my career only because it got me the interview with two large CPG companies.  I like to think that my work ethic and skillset got me the job and doubled my income in around 2 years.  I also did it when I was 23 years old and busted my ass to complete it within 1 year.

To summarize, its a good tool that changes your mindset and how you react to business and it will look good on a resume and get you the interview. 

[robartsd]

I'd be inclined to have your wife plan to be a SAHM and stick it out with your current employer until your retirement is vested; but look at all opportunities to increase your income after your retirement is vested. This gives you 6 months of adjusting to being parents without worrying about other big changes. Don't forget that your money can work harder than you can - even if your retirement contributions while raising kids is relatively small, the foundation you've already established will grow substantially in the 18+ years you're raising your kids.

[slappy]

For us, having my wife be a SAHM initially has absolutely been the right call.  For one thing, breastfeeding was challenging, and there's absolutely no way we would have stuck with it if my wife was also working.  And I absolutely agree with l_b_d -- don't figure on getting a bunch of stuff done @ home with an infant.  My wife and I were both home the first month, and I had in my head that I'd get some stuff done around the house.  I did absolutely nothing not directly related to childcare (and it was wonderful!).

I have a 20 month old and I totally agree with this statement. Breastfeeding can be challenging and a lot of women have trouble keeping up once they return to work.  Personally, I didn't enjoy breastfeeding, but I kept at it because I felt it was in the best interest of my son and I didn't want to pay for formula. My son had issues when I ate dairy, and from what I understand, this is pretty common for babies.  So if I had switched to formula, I would have to buy special formula at twice the price of regular formula, and he didn't even like it. 

Also, cloth diapers can save you money, and are much easier to deal with when you have a stay at home parent. 

I love the advice to start living on one salary now.

[asiljoy]

Do you have a prioritization of how you would like things to go in a perfect world? Of how things are likely to go?

For example, if you wait at your current job until your vested, you get X dollars, but if you were to go get your MBA and get promoted, you'll get paid Y dollars, but be stressed by a more demanding job.

Does your wife want to stay home? Even if she does, that could change. I thought it might work for me, but then I lost my mind during maternity leave.

 Babies just make life complicated in ways you could never expect, or who knows, yours could be an easy baby that immediately starts to sleep 10 hours a night and eats exactly the way the textbooks say. So I'd say whatever you do, make small changes, and keep as much flexibility as you can as long as you can.

[MayDay]

I will ditto the many others who said she CAN NOT work from home with a baby, without childcare.  I mean, she can obviously some people do, but it will make both her and you crazy.  Don't do it. 

I think that *if* things go smoothly with the birth and the baby is doing well, it can be ideal for her to go back to work after kid #1, then stay home after kid #2.  That is because daycare cost is manageable, and with one kid, although life changing FOR SURE, you still have a lot less chaos then with 2+.  Lots of new moms do enjoy a bit of non-baby time as they transition to never getting to pee alone again. 

That said, you guys have to do what works for you, and what will make you happy.  That could be any of the options you outlined. 

[jeromedawg]

Just wanted to share our experience but my wife went SAHM not long after our first (and only, so far) was born back in August. She took full advantage of her maternity leave and state paid options, then went back to work for a couple months before giving her notice. We went through similar discussions as you beforehand and were pretty resolved on having her go SAHM, as she felt inclined to be with him as he grows up. At the same time, she's not aggressive or as inclined about wanting to work and climb the corporate ladder. She liked the people she worked with but didn't enjoy the work in general. To her, the only work she is OK doing is mindless drone work that requires little thought. Not everyone is like this, obviously :).

Anyway, we haven't regretted the decision one bit. Sure, the extra income would have been helpful but for all intents and purposes, we're fine. As far as life now, it is definitely different but in a good way. I started a new job back in January that's full time telecommute so I reap the benefits of flexibility and watching him grow up as well - at the possible expense of going insane from having virtually no face-to-face interaction (lol... we'll see).  As far as for my wife, she will also tell you that being a SAHM, let alone a mother, is quite possibly the hardest thing she has ever done. So if your wife is thinking about becoming a SAHM but is also very career-driven, don't be surprised if she at some point says to you something along the lines of her preferring to go back to work... not just because she's career-driven, but because oftentimes, you hear mothers lamenting that being a SAHM is even *harder* than their former [or current] full time jobs! Of course, she could try to balance two, but it could easily get overwhelming. My wife and I discussed her doing part-time work but I think the priority at first was to have her go full-time SAHM and see how she coped with it. Right now, she's pretty busy :) We have thought about getting some help as far as child-care goes, and our parents certainly helped out during my wife's transition through quitting her previous work. But we want to avoid having to pay for any childcare. It does help that I'm working from home, so I have the flexibility to help out with things here and there. But even with that, it doesn't diminish the fact that being a SAHM is truly a full-time job with overtime; not to mention with zero income :)

Anyway, not sure if that will help any but just wanted to give some experience or perhaps food for thought as a recently new parent myself.

 

[FLBiker]

Also, cloth diapers can save you money, and are much easier to deal with when you have a stay at home parent. 

We cloth diaper, too, and I'm a big fan.  I don't think the SAHP is necessary for those, though.  I (the non-SAHP) do most of the washing.  I put them in at night, do the second wash in the morning, and my wife throws them in the dryer.  We only wash every third day, which helps.  I thought cloth would be a pain, but I haven't minded them at all.

Bottles / pump equipment, on the other hand, were a pain.  Our DD wasn't gaining weight around month two (due to aforementioned BF issues, now happily resolved) so we started supplementing w/ bottles.  That meant washing and boiling bottles AND pump components (pumping to keep DW's supply up) every night.  We probably did that ~4 months.  Way more hassle than cloth diapers.

That said, I'm VERY glad we'd gotten the double pump from insurance (and a set of bottles via the registry) ahead of time.  That way, after a surprisingly concerning 1 month visit with the pediatrician, we were able to go home an unpack / prep bottles and pump stuff, rather than having to figure out what we needed to get.

[bonjourliz]

I'd stick at your current employer til Feb, to get vested. But meanwhile, actively evaluate the different options .... Other employers, fields, MBA programs..... So that I know the landscape once vesting is no longer a tie to the current job.

As for your wife, I would probably not go SAHM right away.  Take a maternity leave, then go back to work and see how things go. A 12wk leave would be returning to work in November-ish. By that point, hopefully you will have a more solid plan for your next career move.  In any event, definitely don't tell her employer now that she won't be coming back after baby. Leave that option open. 

FWIW, I have 2 kids, pg with # 3, and am surprised at the situation I find myself in. I always thought I would want to SAH but after my first was born I was itching to get back to work. Soon after, I realized I needed a job with more flexibility and I landed in a great spot -- my current position.  It is better suited to our family's goals and needs than I ever dreamed I could find. And when #1 was born, I didn't even know this position existed. 

Soo...... My advice is to keep your eyes open, always, and don't close any doors too soon.  And, congratulations!!  My kids are the greatest thing in my life, by far. 

Sent from my HTC first using Tapatalk

[slappy]

Also, cloth diapers can save you money, and are much easier to deal with when you have a stay at home parent. 

We cloth diaper, too, and I'm a big fan.  I don't think the SAHP is necessary for those, though.  I (the non-SAHP) do most of the washing.  I put them in at night, do the second wash in the morning, and my wife throws them in the dryer.  We only wash every third day, which helps.  I thought cloth would be a pain, but I haven't minded them at all.

Bottles / pump equipment, on the other hand, were a pain.  Our DD wasn't gaining weight around month two (due to aforementioned BF issues, now happily resolved) so we started supplementing w/ bottles.  That meant washing and boiling bottles AND pump components (pumping to keep DW's supply up) every night.  We probably did that ~4 months.  Way more hassle than cloth diapers.

That said, I'm VERY glad we'd gotten the double pump from insurance (and a set of bottles via the registry) ahead of time.  That way, after a surprisingly concerning 1 month visit with the pediatrician, we were able to go home an unpack / prep bottles and pump stuff, rather than having to figure out what we needed to get.

I only mentioned about the cloth diapers because in my area, most daycares won't accept them. I am also the non-SAHP and do most of the diaper washing.  We do every 3-5 days as well.

[Cassie]

I think you should do a trial run $ wise to make sure you can afford it and then if it works have her stay home if she wants too.   Some people love it and some hate it.  I stayed home with my 3 but when the youngest went to school f.t. I was ready to get back into the world and went back to work.