New baby, working parents, falling off mustachian wagon - Help!

[fruplicity]

I'd love any mustachian-centric advice for our life right now.

Baby will be 6 months soon. He is awesome and very easy-going and happy, but I often feel like everything else in my life is overwhelming.

Two full-time working parents making middle-class salaries for the city we live in. We pay reasonable rent on a 2 bedroom close to downtown where spouse works, but I commute 28 miles round trip to another city. One hatchback/wagon bought new in 2012 (I wanted used), owe $3000 on it right now, it's a non-negotiable. I am looking for a different job, ideally to another part of the state (lower COL) closer to family, but my field of work (education) is not handing out jobs right now (who is?) so it could take a while. I don't want to put all the effort and $$ into moving closer to my job now just to potentially have to move again soon. We have about $30k in student loan debt (paying it down early, done in 4 years if we stay on schedule), $15k in savings/emergency (with a baby I'm too paranoid to NOT have money available), and we give what we can to retirement, which adds up to about 10% of our salaries right now. We used to save another 8-10% of salaries each month but now that money (plus extra) goes toward daycare and if we've spent carefully we have like $200-400 leftover (but so far we haven't spent carefully). We're not in the red but it's discouraging to realize that we are spending virtually all of our earnings now, living that "paycheck to paycheck" lifestyle that I used to scoff at.

We haven't slipped into eating out too much, but we aren't as careful with buying groceries. Almost every financial decision I make now is based on the fact that I'd rather spend the money than the time (which I feel like I have NONE of), and it makes me feel lazy and wasteful. I am not a TV-watcher unless I'm doing something else productive like cooking or laundry. My commute and job take almost all of my weekly time and energy and the weekends I just want to live "in the moment" and try to maintain the adult relationships I have in addition to enjoying my baby. My spouse has some spending categories that he is not willing to give up right now and I have a hard time talking to him about them.

I never thought we could gain FIRE with the career trajectory we're on, but I thought we could live modestly and be confident in retiring modestly maybe a couple of years early. Now I'm feeling so discouraged and like I'm living the life that mustachians laugh at and feel superior to all the time. Yes I knew logically this is what our finances would look like after a baby but I didn't realize this is how it would "feel". Anyone been there and have any words of wisdom?

[4alpacas]

It would be helpful if you gave specific numbers (your budget, savings goals, interest rates, etc.).  Check out the how to write a case study for guidance. 

Good luck!

[Gin1984]

First of all, relax. Take a deep breathe.  After you pay off the debt, how much will you have left per month percentagewise?  Also, do you buy your diapers/wipes on amazon?  That is a small time and often money saver for me.  Honestly, my first year we gave up a lot of adult interaction and I think is normal.

[deedeezee]

I think the first year is the hardest, especially with two working parents. 

You are paying off your loans and saving for retirement.  Tackle what you can, when you can.  Start small, and build up (can you commute by bike a few days a week?).  As you get more sleep and exercise, and baby learns to entertain him/herself more, and "independent" playtime becomes more common, re-introduce even more mustachian self analysis (and behaviors) into the equation.  If you post numbers, people can be even more helpful.

I also sense a little tension in the relationship (close to spouse's job, not yours; you wanted a used car but ended up with new; excess spending categories spouse is not willing to give up) so I would just encourage you to have a healthy discussion about responsibilities and goals.  Getting bitter (when combined with the early tough days of raising a baby) = not happy times for a marriage.

Stay positive!!  Try to focus on the simple things and enjoy what could and should be a fantastic time. 

[Noodle]

I know that the Mustachians will happily give more specific advice if you post a case study with facts and figures, and perhaps assist you in tweaking the budget, but I think you are being too hard on yourself. For a lot of people, the period of life with young children is the most exhausting and expensive (relative to income) of a marriage. $15,000 in savings, paying down debt early, saving for retirement, and having a little left over every month is not living paycheck to paycheck. If you manage to come out of the next few years with a happy child, strong marriage, no financial decisions causing long-term damage (like an expensive car payment) and growing savings (even if the financial goals go a little slower than preferred) you are still ahead of the vast majority of Americans. Don't underestimate the effect that being tired and busy have on your will and decisionmaking ability (lots of interesting research on the phenomenon of "decision fatigue").

That's not to say that you shouldn't have another look at the budget and see if you can optimize now that you are settled into your baby/work routine and the folks here would be happy to help. But please start from a place of positivity about what you've already accomplished, not feeling guilty because you're not at perfection.

[Northerly]

The first year is tough! We currently have a 9-month old, so many of the same concerns are very real to me right now. At work, so I've got to be brief. I strongly recommend
-One of you quitting your job (probably yours since you have a long commute), this will
     -get rid of daycare
     -get rid of commute
     -provide capital (from sale of car)/remove car payment
     -restore a lot of time and sanity

-Move to a cheaper dwelling. A one bedroom or studio apartment should be fine. But honestly, if you can swing it, try to go ahead and buy a multi-family house if you can.

We adopted a 4-year old last year and my wife had a baby in September. The previous year we had bought and moved into a triplex. I live 4 miles from my job, so we sold our second car and any toys. The rental income is a big help, but life would be do-able without it. My wife stays home with the children, and I honestly don't know how we'd stay sane if we were both working. You can do it!

[historienne]

I strongly recommend
-One of you quitting your job (probably yours since you have a long commute), this will
     -get rid of daycare
     -get rid of commute
     -provide capital (from sale of car)/remove car payment
     -restore a lot of time and sanity

Unless you are on the road to early retirement, leaving the workforce for a period of years is almost certainly not going to save you money in the long run.  You don't just give up your salary for those years; you also generally start back in the workforce at a much lower salary than you would be earning if you had stayed in.   Of course, if one of you *wants* to stay home, or you think the lifestyle benefits would be worth it to your family, it's an option.  But for the vast majority of people, you are not going to come out ahead financially.  If anyone is curious, there's a substantial economics literature tracking these outcomes.

Also, on the sanity issue -  that's very personal.  I also have a 9 month old, and would go nuts if I had to stay home with her, much as I love her.  You may feel differently. 

[Northerly]

Unless you are on the road to early retirement, leaving the workforce for a period of years is almost certainly not going to save you money in the long run.  You don't just give up your salary for those years; you also generally start back in the workforce at a much lower salary than you would be earning if you had stayed in.   Of course, if one of you *wants* to stay home, or you think the lifestyle benefits would be worth it to your family, it's an option.  But for the vast majority of people, you are not going to come out ahead financially.  If anyone is curious, there's a substantial economics literature tracking these outcomes.

Well, there's no arguing that. Maximum participation in the workforce will make you the most money.

My perspective is that FIRE is a goal for my wife and me. Since she stays home, I figure we're half way there. I hope to follow in another 7 years or so. This of course means we will have far, far lower lifetime earnings than if we both worked until 65, since we are in our early 30s now. But that's kind of the point.

[historienne]

Ok, so put differently: If your goal is to work the fewest number of years overall, for most people, you will do that by staying in the workforce until you are ready to retire for good.  In your case, you are effectively working more years so that your wife can work fewer years.  Depending on your relative incomes and desires, that might very well be a good trade.  I'm certainly not trying to talk your wife into going back to work, since y'all sound very happy with your situation.

However, you initially phrased your advice as though it were the financially obvious choice - and it's really, really not.  It's only a financial win if the spouse who stays home never needs to return to work, and it did not sound from the OP's post like they fit that description.

[Northerly]

However, you initially phrased your advice as though it were the financially obvious choice - and it's really, really not.

I certainly agree that individual desires and details matter. I just think that most couples are closer to this than they realize: http://www.mrmoneymustache.com/2012/04/04/reader-case-study-working-a-crappy-job-for-nothing/.

[historienne]

However, you initially phrased your advice as though it were the financially obvious choice - and it's really, really not.

I certainly agree that individual desires and details matter. I just think that most couples are closer to this than they realize: http://www.mrmoneymustache.com/2012/04/04/reader-case-study-working-a-crappy-job-for-nothing/.

The thing is, that blog post does not take into account the long term costs of giving up work.  Which is fine if the plan is for that person never to return to work, but that is not the plan for the vast majority of people who stop working.   And unless a family is going to hit FI before the kids are in elementary school, taking time off while kids are young will mean working longer overall.

I probably sound a bit like a broken record at this point, but I will admit that it gets my hackles up when someone responds to a post in which the OP does not in any way indicate that she would like to stop working...with a suggestion that she stop working.  You may not realize, but working mothers are getting that unsolicited advice all the time, often based on unsupported ideas about "what is best for your children."  It gets old pretty quickly.

[Cassie]

Sometimes when  you add up all the expenses involved with working when you have kids you are better off to stay home. The SAHP can also save $ in many ways: cloth diapers, price comparison, etc that usually does not get done when 2 people work.  The downside is that when the SAHP does go back to work they have lost some career opportunity & $.  If they will get a pension that will be smaller, etc.  But it does make for a much more relaxed & saner life.

[Northerly]

...with a suggestion that she stop working.  You may not realize, but working mothers are getting that unsolicited advice all the time, often based on unsupported ideas about "what is best for your children."  It gets old pretty quickly.

I hear you. During our 8 years together prior to children, my wife and I both tired of the endless inquiries and unsolicited advice RE: children.

FWIW, if the OP lived/moved near her work and her husband commuted, I would recommend that he be the one who quits working. Killing the commute and childcare is key; the gender of the SAHP is not.

[JoyBlogette]

Killing the commute and childcare is key; the gender of the SAHP is not.

100% agree with this.

[Thegoblinchief]

In my experience, things get a little calmer in years 1-4, but then kids need more of your attention again. Even attending conventional school, there's a lot 1:1 interaction doing homework and other activities that demands full concentration in a way that even newborns don't.

I'd personally straighten out all of this friction now rather than later. Do both of you cook, or just one? If both do, consider alternating weeks. If only one of you does, some working couples really like weekly meal planning combined with batch cooking on the weekend, freezing portions for later.

Our stress went way, way down when I cut my hours back but the daycare versus work picture is a lot different when you have only one child.

[Cressida]

I certainly agree that individual desires and details matter. I just think that most couples are closer to this than they realize: http://www.mrmoneymustache.com/2012/04/04/reader-case-study-working-a-crappy-job-for-nothing/.

The thing is, that blog post does not take into account the long term costs of giving up work.  Which is fine if the plan is for that person never to return to work, but that is not the plan for the vast majority of people who stop working.   And unless a family is going to hit FI before the kids are in elementary school, taking time off while kids are young will mean working longer overall.

I probably sound a bit like a broken record at this point, but I will admit that it gets my hackles up when someone responds to a post in which the OP does not in any way indicate that she would like to stop working...with a suggestion that she stop working.  You may not realize, but working mothers are getting that unsolicited advice all the time, often based on unsupported ideas about "what is best for your children."  It gets old pretty quickly.

FWIW I agree with historienne here. If someone is considering quitting their job to stay home with the kids, they will almost certainly float it as a possibility in the original post. If they don't, they very probably don't want to, which is an understandable position for all the reasons historienne mentions.

And +100 on the judgeypants behavior toward mothers. I'm not saying this is what Northerly was doing. But it does happen ALL THE TIME and can cause short fuses on the part of mothers everywhere.

[StarryC]

It sounds to me like the OP only has one car in the family right now anyway.  My guess is even if the commute is gone, the car will still stay.  Though it is possible, very few people are willing to have NO car and a baby if they don't live in New York/ San Francisco/ Chicago.  I think keeping car expenses probably changes the "lose one job" equation. 

In education, are you a teacher?  Do you teach only 9 months of the year?  If possible, take advantage of that by not having daycare in the summer.  That can be a problem with professional daycare, but is not as much with an at home daycare. 

Do keep looking for a job closer to home or spouses job close to your work, but it may not be possible.  I think 14 miles one way could be a very challenging bike commute to start with, especially if it means an additional hour away from home on weekdays.  But, if you can, it might save some money and sanity.  Batch cooking on weekends, Amazon delivery of supplies, and

I think you are doing fine for your goal, which was to retire a "few years early."  You have at least 20 years to meet that goal, and it sounds like you already have some savings.  You may also have some other benefits retiring at that time (work pension, social security?)  One way to do it is to save 30-40% of your income all along.  But, another way, is to save a smaller percent now, and increase your savings rate as you get raises and when you no longer have daycare expenses.  And, paying off your debt is not actually savings, but we kind of count it.  If you are paying of debt with 20% of your income, that will easily become savings in 4 years, plus the daycare expenses ending in about 4 years.

[4alpacas]

I certainly agree that individual desires and details matter. I just think that most couples are closer to this than they realize: http://www.mrmoneymustache.com/2012/04/04/reader-case-study-working-a-crappy-job-for-nothing/.

The thing is, that blog post does not take into account the long term costs of giving up work.  Which is fine if the plan is for that person never to return to work, but that is not the plan for the vast majority of people who stop working.   And unless a family is going to hit FI before the kids are in elementary school, taking time off while kids are young will mean working longer overall.

I probably sound a bit like a broken record at this point, but I will admit that it gets my hackles up when someone responds to a post in which the OP does not in any way indicate that she would like to stop working...with a suggestion that she stop working.  You may not realize, but working mothers are getting that unsolicited advice all the time, often based on unsupported ideas about "what is best for your children."  It gets old pretty quickly.

FWIW I agree with historienne here. If someone is considering quitting their job to stay home with the kids, they will almost certainly float it as a possibility in the original post. If they don't, they very probably don't want to, which is an understandable position for all the reasons historienne mentions.

And +100 on the judgeypants behavior toward mothers. I'm not saying this is what Northerly was doing. But it does happen ALL THE TIME and can cause short fuses on the part of mothers everywhere.

I don't have kids, so I don't feel confident on weighing in on the pressure women feel to stay at home.  However, I read this article last night and found it really interesting.  http://www.nytimes.com/2013/08/11/magazine/the-opt-out-generation-wants-back-in.html?_r=0

[Cassie]

I think people (either sex) should do what they want whether it be working or staying home.  Just because the poster did not mention the possibility does not automatically mean they might not consider that. Maybe they would like to but think they can't afford it etc without taking into consideration all the costs of working & childcare is really expensive.  I think it is fine for it to be suggested as one possible option.

[Rebecca Stapler]

I think you should give yourself a break for the next 6 months. Don't completely fall off the wagon financially, but keep doing what you're doing and just get through each day. Honestly, the first year is really hard -- and it will get easier. When it starts to get easier, then tackle the grocery issues and plug any other spending leaks you have. Your spending habits right now don't have to last forever. And your childcare costs will go down at some point when your infant transitions into a toddler room.

I do recommend shopping at semi-annual consignment sales for baby gear and clothes, though, unless you're all set with those things. The next set of consignment sales will be in the fall. Start building your list of what you'll need the next year -- that way you won't find yourself scrambling to get baby a snowsuit or something after the first snowfall (those are expensive new, but cheap used -- and usually barely used!)

[Janie]

I don't have kids, so I don't feel confident on weighing in on the pressure women feel to stay at home.  However, I read this article last night and found it really interesting.  http://www.nytimes.com/2013/08/11/magazine/the-opt-out-generation-wants-back-in.html?_r=0

Thought provoking article--thanks.

[Christiana]

Have both of you adjusted your income tax withholding to account for your new dependent?  irs.gov has a withholding calculator. 

You have a decent cash cushion.  I'd advise putting extra money/savings toward paying off student loans.  We paid our student loans off as quickly as we could, and I don't at all regret it.

I've learned to use very simple recipes when I cook from scratch that minimize my hands-on prep and mental energy.  Similarly for household chores:  find a simple and sustainable level of effort, and make a routine out of it.  I keep the one-page weekly chore chart on the fridge.

We've also made a big adjustment in shifting much of our spending away from our own interests and entertainment, toward the needs of our children.  And the same thing for our use of time.

FI comes faster if you make more money, but it can also come faster if you learn to live on less money.

[mld]

I'm fairly new here but all I wanted to ask is are you tracking expenses? Since I've started using Mint.com I've felt a lot more in control of our spending when I look at the trend of the last months and the trend for the current month. It's pretty much automated other than the few cash expenses I add by hand or re-categorizing some of the expenses. Anyways, just the fact that I am seeing what the expenses are and how they change from one month to the next is giving me some sense of knowing where the money is going which is bringing a lot of relief despite that our savings are not exactly where we want them yet.

[CarDude]

FI comes faster if you make more money, but it can also come faster if you learn to live on less money.

Good point here.

[avongil]

Perhaps you should post some numbers and the city you live in. It's hard to give any advice without huge assumptions. two full time middle class salaries and a 6 month old should equate to around 40% - 60% savings rate in my definition of a middle class salary.  Without numbers its all just assumptions. 

Assuming 80K inflow (post tax) a year, 40K per year outflow covers day care any many more luxuries than you need.

[fruplicity]

Thanks everyone for the replies. I will think about posting a case study, this question was more about getting logistical/emotional advice (i.e. 'I've been there too, this is how we made it work'). I wanted different advice than what I usually get in real life, like, "Stop paying your loans early! Go out to eat/order in! Hire a house-cleaner! Don't worry about retirement right now! Are you going to have more kids?!"

Re: quitting job (my husband and I make the same amount), the math doesn't work out with costs of daycare/commuting vs. losing paycheck/benefits and I don't feel emotionally driven enough to make it happen (as in I would probably go crazy at home with the baby all the time). And it would leave us behind in the long term with student debt, retirement, professional development. My ideal would be to get a part time job once our debt is gone.

Biking is unrealistic for me, I am in Boston and completely admire (and am totally frightened of hitting) all the bicyclists I see, but it would be illegal for me to bike in the underwater tunnels and toll booth I have to use (and it would probably take like an hour and half and I'd need a shower in both directions).

Thanks again everyone!

[PlanB]

I think you're doing just fine. The first year is the hardest... for many reasons. Most of which are related to transitioning to the care of that little one. I think the most important thing is to be generous with yourself and your spouse. Whatever generous means to you.. eating out a little more often, or picnicking; making life easier by cooking a batch of meals on Sunday, or having some friends potluck with you; busting out of normal routine (we get so stuck, don't we-- as parents?) to surprise your SO with a date fully planned, or a free afternoon from work? Throw that baby (and yourselves) a congratulatory 1st year birthday party... we had a cocktail party as my SO stayed home with kiddo and needed it! And then, reevaluate. Write down all of your bills, see what is essential, and what you can tighten up on. I think with kids, and two working parents, that it's necessary to relax a little, and then reevaluate when you are able. You'll know when that time is.

[TrulyStashin]

..... I think you are being too hard on yourself. For a lot of people, the period of life with young children is the most exhausting and expensive (relative to income) of a marriage. $15,000 in savings, paying down debt early, saving for retirement, and having a little left over every month is not living paycheck to paycheck. If you manage to come out of the next few years with a happy child, strong marriage, no financial decisions causing long-term damage (like an expensive car payment) and growing savings (even if the financial goals go a little slower than preferred) you are still ahead of the vast majority of Americans. Don't underestimate the effect that being tired and busy have on your will and decisionmaking ability (lots of interesting research on the phenomenon of "decision fatigue").

That's not to say that you shouldn't have another look at the budget and see if you can optimize now that you are settled into your baby/work routine and the folks here would be happy to help. But please start from a place of positivity about what you've already accomplished, not feeling guilty because you're not at perfection.

+1.  You're doing very well and you're NOT living paycheck to paycheck.  Remind yourself of that.  People who are truly in that boat aren't saving for retirement or paying down SL's earlier than necessary.

Deep breath.  It will get easier.

[J Boogie]

Killing the commute and childcare is key; the gender of the SAHP is not.

100% agree with this.

And of course the other key is who has the most interest in and ability to work remotely/freelance/start a small business.

Although I consider myself a progressive minded man in many ways, I have to admit I wouldn't feel completely comfortable about being a stay at home dad - and my fiancee admitted the same.  However, if it meant I could spend more time pursuing a profitable passion, I would welcome it with the openest of arms. 

[CNM]

I have a 2 year old and both my spouse and I work full time outside of the home, so I can understand where you are coming from.  Day care expenses went WAY down for us once our son was 1.5 years old.  And, once he is school age, day care will be virtually non-existent.  So, this time period of expensive baby day care will not last forever.