Author Topic: How do I support my parents (and spouse) but still work towards FI??  (Read 4088 times)

frugalfedmom

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So here's a brief description of my situation: I'm currently married with a toddler - husband's in another state getting his doctorate, so my son and I are living with my parents who are helping with the childcare. He gets a stipend to pay for housing/expenses, so all of my income is being used to pay our bills and maintain our entire household.

My income: $93,000

Monthly take-home:
$4600 (this is after ~1000/month pre-tax into 401k, including employer matching - Currently 401k balance, ~$48,000)

Expenses:
$615 Preschool (3 half days a week...this isn't "necessary" per se, but otherwise, my son gets no exposure to other kids)
$1500 Helping parents with mortgage (sad to say my parents lived a very ANTImustachian life...retired now, but hardly getting enough social security to live on their own - about $700 combined)
$1000 Monthly expenses (family phones, cable, groceries, gas, husband's monthly travel back home, my train ticket for my commute which is partly subsidized)
$600 Student loan (currently in deferment since my husband is a student, so I'm adding this to my car payments right now)
$900 + (whatever I can make from my 2nd freelance job) Honda CRV (I know, I know, this is supposed to be the first thing to go, but it's the one car we have between my family and my parents, and since I'm so close to paying it off and it requires so little maintenance, I don't think it'd be financially wise to sell it and spend most of that money on buying an older car...My goal is to pay it off by April, then start in on my student loans)

So my short-term (~2 yr) goal is to pay off my car and student loan... I have a few questions I'm hoping to get some advice on....
1) Is there anything I can improve? I know the car and cable are "excesses" but the car's almost paid off, and with two older parents in the same house, I can't get rid of the cable without causing family arguments/tension. We fight enough as it is.

2) Because my parents aren't financially capable of living on their own, at some point, if we buy a house of our own, we'll have to find one big enough for them to live with us, or give them a monthly stipend to help them live alone. I'm not sure which is better. Neither is ideal financially for us (nor emotionally), but I can't just leave them to fend for themselves. Staying with them in their current house would be difficult and/or inefficient, because a) it'd be very crowded for 5 (maybe more if we have another kid) people once my husband finishes his degree and returns home permanently and b) it's so old and outdated that it'd take way too much time and money to fix up - money i'm not willing to put into a house with very little equity since they've refinanced so many times (again, indicative of their antimustachian ways). Even if we sell it, we'd lose money on it at this point. It'd probably have to be a short sale.

3) With my 2 year plan to pay off my debt first, we wouldn't be able to save up for a down payment for our own house until at least after that. Plus, I'd like to wait until my husband finds a job first before we commit to buying. But I'd also like to move to a better school district before my son starts kindergarten next year, so I'm torn between just staying with my parents and paying down the debt faster, or renting in a better school district (while giving my parents some money to support themselves) and trying to save up whatever we can for a down payment. Sometime early next summer, I may have an opportunity to get a promotion, which would put me about $700/month more after taxes, which would help too.

I'd like to retire by 50 (15 more working years) with no debt, at least $300-400k in 401k, have a good chunk of our house paid off, if not completely paid off, and be able to live off my husband's single income until i'm eligible to receive my pension, social security, and 401k payouts. I know my husband wants to work til as long as he can in academia which is fine for him, but I'd like to have the freedom/luxury to retire by 50 even though I actually do like my job.

I'd just like to get some advice to see if I'm doing this right. I feel like I'm doing the best I can under these specific circumstances, but living with parents in their house (even though I'm pretty much paying for their mortgage at this point), it's hard to be totally mustachian. The emotional aspect of having this parental "baggage" (I know it sounds terrible saying it like this) is also substantial. I'm constantly trying to think of how we can work it out so that we're all financially sound and as emotionally satisfied as we can be as a family.
 

plainjane

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Re: How do I support my parents (and spouse) but still work towards FI??
« Reply #1 on: December 10, 2014, 02:18:17 PM »
When is your husband expecting to graduate? 

1 - it's tough to say where you can improve because the place where you have the most opportunity without making big changes is "$1000 Monthly expenses (family phones, cable, groceries, gas, husband's monthly travel back home, my train ticket for my commute which is partly subsidized)".  Can you require your parents to pay for cable out of their money if it is that important to them?  What are those line items broken out?

2 - it really comes down to a discussion with your husband as to what you both can live with.  If you subsidize an apartment, will they continue to take on more debt?  What about buying a duplex or triplex and having them in one of the apartments and you live in the other?  This is not a decision to make on your own.

3 - Do not buy until your husband has a job and you know where.  I'd also really push back on the idea of switching school districts for kindergarten if you want to pay off your loans in the 2 years. As long as you are providing enough support at home, it's unlikely your current district will cause that much of a problem at that age.  One positive thing is that you'd be able to free up the $615 you're currently putting into pre-school once he is there.  That money could go towards the student loans if the interest rate is over 4%, or towards retirement savings otherwise.

You should start planning with your husband what is next.  What is the job market like for him in academia?  What is his expected salary?  Where are the jobs?  What are his expected student loan payments?  How likely is he to get a good job in academia, and how willing is he to move out of there if he is stuck in adjunct-hell?

DrF

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Re: How do I support my parents (and spouse) but still work towards FI??
« Reply #2 on: December 10, 2014, 03:29:53 PM »
One, or both, of your parents needs to find a job!

You CANNOT be retired if you don't have enough money to pay for necessities. Currently, it seems as though you are enabling them to live the lifestyle that you ultimately want.

I am assuming that you are ~30-35, and an only child? If you are not an only child, then are your siblings helping out with your parents? Regardless, if you are 35, that would put your parents between 60-70yo. I see a lot of 60-70yo employees out there working to pay the bills. They probably don't even need to earn that much. If both of them worked part time, that should be sufficient.

If they will not get a job, then you start chopping LUXURIES like cable, restaurants, travel, whatever. This may sound like a nuclear option, but your parents made the choice not to save for retirement. How can they have lived through one of the most beneficial times in US history and only have $700 per month of SS between them with no other source of income? TRAGIC!!

It sounds to me like your parents need to sell their house and move into something they can afford.

Enough about your parents. It sounds like you are in your mid thirties, with your husband about to start earning a real salary soon. If you keep working you should be able to sock away money. Please get a clear understanding of what you are willing to subsidize for your parents situation. You may have to work longer if you keep on paying for their lifestyle.

snshijuptr

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Re: How do I support my parents (and spouse) but still work towards FI??
« Reply #3 on: December 10, 2014, 04:43:46 PM »
Are Grandparents helping with childcare while you work? If so, then really you are paying $615+$1500+whatever other items you would rather drop for 1) Childcare and 2) housing.

What would you otherwise pay in childcare + rent if you moved? What will you do about childcare for your second child?

RFAAOATB

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Re: How do I support my parents (and spouse) but still work towards FI??
« Reply #4 on: December 10, 2014, 05:14:57 PM »
Do you live with your parents or do your parents live with you?  If your planning on moving out with them following you then you need to be the primary decider on all issues and they need to defer to your business acumen.  Use this time to plan (with them) what the arrangement will be in the future.  I would not send money out of the house to help your parents.  Either they are self sufficient, or they can live with you under the role of wise elders who will let you handle the money.  From the way you describe it you need them more than they need you.

At this point I would recommend cutting out Daycare and see if another $300 would be enough a gift for more grandparents time for the toddler.  The other $300 can go for faster debt repayment, and down payment building.


olivia

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Re: How do I support my parents (and spouse) but still work towards FI??
« Reply #5 on: December 10, 2014, 05:43:58 PM »
$1500 towards "helping" your parents with their mortgage is insane.  That IS a mortgage.  What are their bills relative to their income?  Do they really only get $700 total in SS?  Do they have any sort of 401k or pension?   They definitely need to sell their house-it is completely unsustainable for them.

Would they qualify for subsidized housing or food stamps?  Can they get jobs? 

TerriM

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Re: How do I support my parents (and spouse) but still work towards FI??
« Reply #6 on: December 10, 2014, 07:32:37 PM »
You sound like you are doing this to support your parents as a win-win situation and that it's overwhelming you.

Can your parents take your toddler to a park instead of preschool?  How old is your kid?  $615/m is more than I pay for the same amount of daycare (which I consider super-expensive), so unless you are in NYC or SF/Bay area, seems to me you're overpaying (and if you're in SF/Bay, you should be able to find cheaper depending on your city).

Aside from trying to help your parents by paying them for childcare, can you move in with your husband and live off of his stipend? (just curious--maybe it's worth the $1k/m in retirement to keep the current situation, but if your parents kicked you out, how would that option look to you?)

I don't think you should ever hand your parents money (aka stipend) UNLESS you want to just pay them what you think they put out for you and call it even and wipe your hands of them.  By handing them money, you are not helping them overcome financial issues.  If you choose to repay their love and care, do what they did for you--house, maybe food, in exchange for chores.   Them moving in with you is fine, but as someone said before, you hold the pursestrings period.  They're lucky they're getting a $700 allowance.  We don't give our kids that :)

frugalfedmom

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Re: How do I support my parents (and spouse) but still work towards FI??
« Reply #7 on: December 11, 2014, 09:40:35 AM »
Thanks for all your comments! Hah, yes, as a previous poster mentioned, it is a bit of an awkward situation since it's my parents' house, but we're pretty much paying the mortgage which allows us/them to continue living there. Right now, we kind of both need each other (they need my income, I need their childcare help), but once my husband's done (in about a year), it gets more complex. They're both trying to look for jobs, but having owned a business (which clearly did not do as well as it could have...part of the problem was that they just kept pouring money into a dying business instead of walking away before too much damage), they don't necessarily have the skills to be highly employable. But they're still trying.

I do appreciate all your comments though, especially as it seems the consensus is that it's ok to have them live with us under our rules, but not to subsidize a separate household. I think my brain knows this, but as TerriM mentions, my sense of duty as their child makes me feel I need to pay them back for all they've done for me. It's refreshing to get some objective thoughts here though.

Oh, and yes, I live in NJ so the preschool cost is pretty standard for this area.

RFAAOATB

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Re: How do I support my parents (and spouse) but still work towards FI??
« Reply #8 on: December 11, 2014, 01:17:24 PM »
my sense of duty as their child makes me feel I need to pay them back for all they've done for me.

Indeed letting them live with you and use your kitchen is how it goes.  Buying a separate house is not required.  After seeing that your children will know what's up when you get old.

TerriM

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Re: How do I support my parents (and spouse) but still work towards FI??
« Reply #9 on: December 11, 2014, 05:28:50 PM »
Thanks for all your comments! Hah, yes, as a previous poster mentioned, it is a bit of an awkward situation since it's my parents' house, but we're pretty much paying the mortgage which allows us/them to continue living there. Right now, we kind of both need each other (they need my income, I need their childcare help), but once my husband's done (in about a year), it gets more complex. They're both trying to look for jobs, but having owned a business (which clearly did not do as well as it could have...part of the problem was that they just kept pouring money into a dying business instead of walking away before too much damage), they don't necessarily have the skills to be highly employable. But they're still trying.

Are they actually anti-mustachian spending on luxuries while in debt, or did they simply "invest" in a losing proposition by trying to run their own business?  Those are two different things.  I would feel less bad about giving them money if it were the latter.

That does at least explain the low social security income....

mozar

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Re: How do I support my parents (and spouse) but still work towards FI??
« Reply #10 on: December 11, 2014, 06:32:38 PM »
How much did your parents help you? Could you pay them back and call it even?
$700 is rough but it was their choice and there are programs for low income seniors.
I don't understand why you are using your parents for childcare but still paying for childcare. Your kid is socializing with your parents.