**THIS ORIGINAL POST IS FROM JANUARY 2022** Updates below in comments
Family of five, DW (34), DH (35), three kids (6m, 4, and 6)
Both of us work full time with two kids in daycare and one in 1st grade. Its been 3 years of stress and we are both super crispy. Two years of pandemic without reliable childcare and the year before that was filled with family cancer diagnosis and a miscarriage. This case study is for my sanity, laying out the options if we need to make a change, and seeing if I am missing something. We have been in survival mode for so long and I’m trying to right the ship to give us the most options as this shitshow continues.
Liquid assets as of 1/22/22 (so not highest in last couple months)
401Ks - $678k
Roth IRAs - $228k
HSAs - $52k
Cash - $41k
I Bonds - $10K
Total Liquid Assets - $1,009k
Other Assets
529s - $9k
Home Equity - $247k (will be staying in this house for at least 15 more years but it is not our forever house… way too big without kids)
Truck (long paid off) & Minivan
Debt:
Mortgage - $428k @2.8% with 29 years left, no rush to pay off due to amazing rate
Minivan - $20k @ 0% little over 3 years left, could have paid cash but 0% interest won!
Consistent Expenses
Expenses Monthly
Mortgage $2,806 Approx $1.8k PI and $1k Escrow
Utilities $508 Average of an expensive year (2021) for water, electric, propane, heating oil (previous year was $438/m so being conservative)
Life Insurance $30 2 10 year term policies
Cell phone $36 2 @$18/m
Internet $90
Streaming $20 Netflix, Paramount
Auto payment $520 0% interest
Auto Gas $171 More expensive than previous years due to no carpooling to work
Auto Ins $128
Auto Property Tax & registration $70 Yay taxes on personal property every year
Car Maint $75 Average of previous year's high spending
Shopping $200 Diapers, clothes, Amazon, gifts, misc
Pets $170 Food, litter, and vet for 3 cats
Food $1,083 Groceries, Alcohol, Dining out (and anything bought at Coscto), still working on getting this down but lots of convenience shopping was going on last year (was $1340/m)
Travel $70 Very minimal with 3 kids..
Misc $200 Kid activities, hair cuts (me and the girls twice a year), entertainment, etc
Total $6,177/month -> $74,124/year
Daycare Expenses:
Both 6m and 4 year old til kinder in the fall - $2,306/m
Only 6m - $1,280/m
Before School care for 6 year old - $150/m
Total Current = $2,456/m
Total in the Fall = $1,580/m
Income
DW - $114.6k/year, DH - $111.8k/year, minimal interest income
Total Gross - $226.4k/year
Deductions
Currently Maxing out 401k for both, maxing HSA, $5k dependant care FSA, two Roth IRAs and med $4.6k/year
Plus a decent amount of taxes
Additional spending info - Last two years spending also included some retail therapy that I am already cutting back on but left in some extra ‘shopping’ costs above to be realistic about what will change quickly. I’m the DW and I’m breastfeeding the baby and sleep deprived. He is adorable and worth it but omg starting over again with the baby phase is ROUGH especially with daycare pandemic issues.
Work Situation:
Both DH and I are burnt out.
DW- I love my immediate management and enjoy my work mostly but hate the big megacorp I work for that insults our intelligence with their policy changes that decrease our benefits. When daycare closes for COVID I can WFH mostly to flex but now with the baby its really really hard. I have a lot of social capital built up and I hesitate to look for another job even if the pay might be better because of the good reputation I have built and maintained even through the last three years of shitshow. I have a great role of visible responsibility without direct reports.
DH- His group is understaffed and has been for a while. His supervisor sucks. He is really good at his job and good at the work. He could easily get another engineering job elsewhere or in a different area of the company. His manager is a big fan of his and would overrule any ass-foolery if his supervisor tries to do anything sketch.
We are both currently in our performance review period and expect the usual “good” raise for the company which is usually a min 3.5% for us.
If we decide to make a change, these are the options as I see it:
Option 1) Continue on in our current roles but care less. Coast for now and don’t let work stress add to life stress as much as possible. Might be a hard shift as we have been overachievers but need to let go of things causing the stress. Pros - firehose of cash continues, Cons - probably less good raise next year (not a biggie), no immediate change to work time commitment
Option 2) I try to go part time. Not sure how realistic this would be at my company. My job has a possibility of allowing it but the megacorp is a difficult beast to overcome with standard policy. I would need to work enough to afford daycare still as part time daycare is just as expensive here. Would drop our 401k contributions to 6% for the match, keep the HSA max, and hopefully keep the Roth IRA maxing. If just using the 6m old daycare expenses then I would need to take home a minimum of $35k to pay for daycare and the Roth IRAs. So it sounds possible at 50% part time or more. Pros - more time for me, still getting money, still involved in work projects, Cons - difficult to get, not sure how long it could be, reduction in benefits, not possible for DH
Option 3) One of us quits and we lose the daycare expense and have a stay at home parent. I think being a stay at home parent is harder than my job so this would be only an option for my husband. I estimate my take home after 6% 401k for match, max HSA, med premiums, and taxes to just cover our monthly expenses above without daycare and without the Roth IRAs. Would have to actually pay attention to our spending more. Pros - big change could be good, more time with the kids for one of us, Cons- significantly less money coming in, being a STAP is not easy and could still leave us both burnt out but with less income
Option 4) Unpaid leave of absence. Both of us have the options of unpaid leave of absences with job protection. Under 30 days can be approved by manager level and they would do this no question if its framed as taking care of the kids/mental health. Not sure if 30 days would be enough to re-boot us. Over 30 days up to a year is also possible but requires higher approval. We have some cash on hand to cover some unpaid time but not super long for both of us. Would want to wait for better weather to do this. Pros - job protection with a break, not a huge reduction in income Cons - potentially not long enough of a break
Option 5) Get new jobs. I’m not there yet but DH might be. Pros - change could be good, probably more income, Cons - starting over with social capital, pressure to perform to establish reputation again, unknowns of management
The four year old “graduates” pre-k in June and I would want to keep her in daycare til then if at all possible. I think we will go for Option 1 for now but would like some more eyes on the other options so we have them in our back pockets if things get worse at work or Option 1 doesn’t help. Just typing this up helped me immensely.
Question: Am I missing anything? Any glaring holes in our expenses or the Options? What would you do if you were us?