Most expensive year of my life ahead, how to cope?

[wonkette]

I have a baby and a toddler in high cost Washington, DC. My wife and I have stretched our parental leave as long as we could but baby just started full-time childcare at a great federal center with their older sibling. Toddler will start DC's prek3 in almost exactly a year.

Until then we will be paying an eye watering 3900 a month for full-time care. This is more than our rent, though not for long as we are outgrowing our 2br1ba rental and looking to rent a house. We've also been car free for a decade but are buying a car in the next 6 months.

We're a fed and a think tank type - lots of stability but not a lot of potential for income growth, grossing about $260k a year combined and I feel like every cent of it is flying out the door these days. Our net worth is $1.2M with about 80% of that in TSP/403b or Roth accounts.

Between parenting, pumping, and work burnout I can feel my frugality muscles atrophying. I'm forgetting to bring my lunch to work and more susceptible to online shopping ads. We're getting a little more takeout but what has really skyrocketed is the coffee, ice cream, and other snacks out of the house.

Our former 40-50% savings rate now looks like 10-15% Is this just temporary and I should relax a little bit and get through it? Or do I need to recommit to frugality so I don't fritter away my retirement on $7 Jeni's ice cream after the public pool? I'm sure the answer is between the two extremes. I would love to hear from parents who have been through this phase and what worked when you have limited bandwidth.

[englishteacheralex]

Yes. It's just temporary. Do what you have to do. In hindsight I wish I had spent less energy on worrying about frugality when I was in the stage you are currently going through. Obviously you can't completely lose all your money boundaries, but paying for convenience and survival was absolutely understandable at the time and I think we should have done more of it.

And we didn't have a $1m+ net worth at the time, either.

There are a lot of solutions to things that cost money that in my opinion are the "good enough" options. For example: Costco prepared meals or frozen meals as a substitute for takeout. It would be cheaper to make the meals from scratch, but way more expensive to get it as takeout. I should have been more open to solutions like this.

Another thing that would have been helpful would have been really nice cleaning supplies, like a stick vac or a Roomba or a combo vac/mop. I figured out later than I should have that investing in high quality products made cleaning a lot easier and more likely to happen regularly, which then decreases the time necessary. I've never paid for a housecleaner (it would have been very justified in my taking-care-of-babies days, but I really never had enough money to afford it) but high quality cleaning appliances/products would have been really helpful.

In hindsight, that time period was the most difficult and costly of my life and now that my kids are 8 and 10 it's very obvious that it was only temporary and I should have cut myself a lot more slack.

[Kmp2]

Oof, I remember this, definitely go easy on yourself as you buy a little more convenience as things feel just about to fall apart (all the time for me!).

I'd say, you can't avoid daycare, but can you delay moving/vehicle even just a year. That would give yourself a little more breathing room to not feel guilty about the smaller things.
If you can't delay, then the more frugally you can manage those big changes, the greater the impact you will have on your future net worth. So focus your frugality muscle there and let the lunches go for a bit.

Be kind to yourself!

[wonkette]

Yes. It's just temporary. Do what you have to do. In hindsight I wish I had spent less energy on worrying about frugality when I was in the stage you are currently going through. Obviously you can't completely lose all your money boundaries, but paying for convenience and survival was absolutely understandable at the time and I think we should have done more of it.

And we didn't have a $1m+ net worth at the time, either.

There are a lot of solutions to things that cost money that in my opinion are the "good enough" options. For example: Costco prepared meals or frozen meals as a substitute for takeout. It would be cheaper to make the meals from scratch, but way more expensive to get it as takeout. I should have been more open to solutions like this.

Another thing that would have been helpful would have been really nice cleaning supplies, like a stick vac or a Roomba or a combo vac/mop. I figured out later than I should have that investing in high quality products made cleaning a lot easier and more likely to happen regularly, which then decreases the time necessary. I've never paid for a housecleaner (it would have been very justified in my taking-care-of-babies days, but I really never had enough money to afford it) but high quality cleaning appliances/products would have been really helpful.

In hindsight, that time period was the most difficult and costly of my life and now that my kids are 8 and 10 it's very obvious that it was only temporary and I should have cut myself a lot more slack.

This might be the justification I need to buy a Dyson! Thanks for the reassurance that it is a phase, like everything else in parenting.

[wonkette]

Oof, I remember this, definitely go easy on yourself as you buy a little more convenience as things feel just about to fall apart (all the time for me!).

I'd say, you can't avoid daycare, but can you delay moving/vehicle even just a year. That would give yourself a little more breathing room to not feel guilty about the smaller things.
If you can't delay, then the more frugally you can manage those big changes, the greater the impact you will have on your future net worth. So focus your frugality muscle there and let the lunches go for a bit.

Be kind to yourself!

Thanks. We got five guys for dinner (there is one in walking distance) and it definitely cost more than it did in 2019 but is less than 1% of our planned car budget. Moving cannot be put off much longer because we would really really like to establish ourselves in a public school catchment and avoid moving much while the kids are in school. That is the downside to having two additional free prek grades available* is it accelerates these decisions. But the childcare savings can't be beat!

*not every single school building in DC has prek3 or prek4 so it is a little more complicated than that in reality

[rothwem]

Ugh.  No real advice, but some empathy, we're in a similar spot, with similar issues related to spending.  Our income isn't quite as high as yours, but our daycare is "only" $3100/month for two kids.

FWIW, my sister lives in Silver Spring and works at a federal agency--she's only got 1 and is paying $3000/month for daycare. You're practically getting a bargain at $3900/month for two!

[tweezers]

Our two are 13 and 15 now, but this is temporary so try and give yourself grace. 

I kept a stock of canned soup, granola bars, and baby carrots at work for when I couldn't get it together/forgot to bring lunch, and we ate a lot of pasta with jarred sauce.  Having frozen prepared foods, bagged salad, etc from Costco like EnglishTeacherAlex mentioned was helpful too.  Importantly, we waaaaay lowered expectations for a clean/organized house.  When I look back at photos from the younger years the kids are half dressed and there is stuff everywhere (and a random assortment...laundry baskets, toys, a potato masher and other kitchen things, dog toys and the dog, pillows...).  It was chaos, but everyone was happy and loved.  Those photos and memories bring me a lot of joy, and trigger zero thoughts about lowered savings rates and upended FIRE goals.

Good luck and enjoy this time...it goes by so fast (which I know is cliche and annoying in the moment when you're exhausted, over-touched, and just want a few moments to yourself).

[roomtempmayo]

Between parenting, pumping, and work burnout I can feel my frugality muscles atrophying. I'm forgetting to bring my lunch to work and more susceptible to online shopping ads. We're getting a little more takeout but what has really skyrocketed is the coffee, ice cream, and other snacks out of the house.

I'd add up how much the little conveniences are costing you before instinctively focusing on them.  It might not be all that much.

If what's really eating you alive is daycare, a car, and a bigger apartment (which I suspect is the case, and none of which you can really control at this moment), I'd fight the urge to start in on metaphorical coupon clipping with all the little stuff.  It might make you feel like you're doing something, but it probably won't make that much of a difference beyond making your life harder.  Don't waste your emotional energy making a bunch of decisions that are both small and difficult.

Maybe try focusing on the sorts of decisions you can make once that will wipe out some impulse spending for months to come.  A good coffeemaker for your office, or a bunch of ice cream bars in your freezer, or laying in a stock of frozen-type meals, which may not be great for you, but probably aren't any worse than takeout.  Nobody is above Kraft mac and cheese.  Food routines are your friend now - we make tacos every Tuesday and pasta every Thursday.  I also menu plan on the weekend and grocery shop once, again trying to minimize decisions and never get home wondering what to make for dinner.

[Captain FIRE]

There are a lot of solutions to things that cost money that in my opinion are the "good enough" options. For example: Costco prepared meals or frozen meals as a substitute for takeout. It would be cheaper to make the meals from scratch, but way more expensive to get it as takeout. I should have been more open to solutions like this.

This. Don't worry about optimizing. Give yourself grace, understand things will get better and you'll have a bit more bandwidth. For now, just try to do a little bit "better" instead of perfect. Buy the frozen pizza ($$) instead of takeout ($$$) or making from scratch ($). Figure out halfway solutions. Maybe you buy prepared food at the supermarket for lunches that's better than takeout but not as good as making from scratch. (Although do try to make coffee at home - maybe make it the night before and microwave to warm up?) Keep snacks in the car or office, buy in bulk so you just need to bring them in once for a week or two, make it easy so you don't have to work hard to stretch your frugality muscle. Re shopping, make yourself not buy anything unless you've thought about it for X hours. (24? 48? a week?) That usually curbs my impulse and lets me think about if I really need something.

[Metalcat]

There are a lot of solutions to things that cost money that in my opinion are the "good enough" options. For example: Costco prepared meals or frozen meals as a substitute for takeout. It would be cheaper to make the meals from scratch, but way more expensive to get it as takeout. I should have been more open to solutions like this.

This. Don't worry about optimizing. Give yourself grace, understand things will get better and you'll have a bit more bandwidth. For now, just try to do a little bit "better" instead of perfect. Buy the frozen pizza ($$) instead of takeout ($$$) or making from scratch ($). Figure out halfway solutions. Maybe you buy prepared food at the supermarket for lunches that's better than takeout but not as good as making from scratch. (Although do try to make coffee at home - maybe make it the night before and microwave to warm up?) Keep snacks in the car or office, buy in bulk so you just need to bring them in once for a week or two, make it easy so you don't have to work hard to stretch your frugality muscle. Re shopping, make yourself not buy anything unless you've thought about it for X hours. (24? 48? a week?) That usually curbs my impulse and lets me think about if I really need something.

100% this

I went through an insanely expensive few years with serious health issues and doing grad school, and that's survival mode.

Also, when it comes to food, I hire someone to bulk cook for us. It costs us $60-100/wk. I print out very clear instructions and within a few hours, I have a week's worth of nutritional meals portioned out in the fridge. I find this much, much better value than just about any other source of food convenience out there.

It took several weeks for my kitchen helper to get to the point that she could do it all by herself, so for the first while I had to supervise and do some of the work myself, but she got there and now I don't even stick around while she's cooking. We go out for a walk or a coffee to recharge and come back to ALL THE FOOD.

Also, invest in some mental health supports.

As for your savings rate, the only person shaming you for that being low right now is you. No one is pressuring you to save more than your circumstances allow, that's a pressure you are making up for yourself.

Focus now on figuring out what a sustainable, healthy life looks and feels like, and strategize how to work towards that. When life changes drastically, you need to not stay too attached to old metrics of success. Be nimble, adaptive, and perhaps develop more robust metrics of what success actually means to you.

Remember, one of the number one predictors of good outcomes for kids is that their mom is happy and healthy. Not that she saved a sht ton of money.

Money has to serve the goal of happiness and health, not make that worse.

[Spruit]

I'm in a similar stage of life, although all my numbers (income, nw and expenses) are smaller. We've got the first kid to school, and it really eased things up. Even more true for getting the tiny baby to young toddlerstage. What a big relief wrt not having to twist myself in knots to combine pumping and work. It frees up a lot of mental bandwidth, which enables me to get back to frugal habits of earlier days. Frugal me was hidden in clouds of hormones and overwhelm. Also, less sleep deprivation makes so much difference.
I really needed to read this thread, because I recognize the tendency to berate myself for our "low" savings rate of the last years.

[Tig_]

I have 2.5 year old twins on the eastern shore and I will say I feel like it’s finally getting easier to get back to some semblance of frugality. Totally 100% go for convenience. I wish I did more of it in the earlier months. I’m getting to a point where I can consistently prep 1-2 proteins and cut up some fruit and sweet potatoes on Sunday and that helps the week go so much smoother.

So, echoing everyone else, but shortening the timeline on when it starts to get easier.

[Chris Pascale]

So sorry about these incredible costs, but there are incredible benefits, too.

For the time my 2nd daughter was in daycare when she was 1, I saw that she was really becoming socialized nicely with other kids her age. It was tough at first, but one day I peaked in before picking her up and she another kid were playing so nicely together.

[glacio09]

I ended up not having kids (unless something very strange happens) but for awhile I thought I was going to. Part of my motivation to set up investments and pay debt was so that I wouldn't have to worry about it in during the insane periods. I would look at it that way. You were frugal and sacrificed when it was easier so that you don't have to when it got difficult. The compounding is working behind the scenes while you just survive.

No guarantee that I would have been able to take my own advice.

[Kmp2]

Importantly, we waaaaay lowered expectations for a clean/organized house. 

This is such good advice! Things will be clean and tidy again, no need to stress about it now though!

I gotta admit, the pre-k/public school catchment conversation is so foreign being from Canada (and a province with no pre-k).  All I have is empathy and know that you'll get through it and be in a better place (probably sooner than you think... days are long, years are short or something)

[wonkette]

Thanks all for the replies about lowering expectations and lowering the pressure around savings rates for now. I think @roomtempmayo is right that I am worrying a little too much about coupon clipping stuff because it feels controllable. But it is a bad time vs money saved investment.

The first personal finance things I read that really resonated with me were Elizabeth Warren's Two Income Trap and Balanced Money Formula. Well, we just signed a lease that is going to put my money formula out of balance with more than 50% going to needs/obligations! Very uncomfortable. But that will be temporary and at least we're moving a lot closer to Costco.

[roomtempmayo]

@wonkette The Two Income Trap totally changed how I think about housing, schools, and working parents.  I think it's the most underrated book on social policy out there.

[MaybeBabyMustache]

We've definitely been where you are (my now teens are 13 months apart). Those child care years are expensive, but honestly, they are nothing compared to the high school/college years! :-) We are much further in our financial journey at this point, so it's a lot less stressful.

To echo what everyone else said, don't sweat it. Sure, make smart decisions, ensure you value the tradeoffs you're making, but don't sweat every detail. You need to give yourself a bit of grace at this phase, and as long as you have a clear plan for your ultimate financial goals, a little flexibility at this time will give you the mental stamina to keep going. Parenting (along with work, financial journeys & plenty of other metaphors) is a marathon. Don't burn out too early.

[iris lily]

Oof, I remember this, definitely go easy on yourself as you buy a little more convenience as things feel just about to fall apart (all the time for me!).

I'd say, you can't avoid daycare, but can you delay moving/vehicle even just a year. That would give yourself a little more breathing room to not feel guilty about the smaller things.
If you can't delay, then the more frugally you can manage those big changes, the greater the impact you will have on your future net worth. So focus your frugality muscle there and let the lunches go for a bit.

Be kind to yourself!

This, and honestly moving is a huge stresser as well. Stay put in your rental, buy your car, let the little things go during this season of tiny chuldren.

[ToTheMoon]

Check out Ramit Sethi podcasts/YouTube for some help with finding balance in your finances during this time. I wish I had not been quite so stingy/worried when my kids were littles. As @glacio09 said earlier, the compounding will still be doing work in the background, and the happier more balanced you are at the other end of these years, the easier it will be to find your footing again!