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04-12-2012, 06:37 PM #1
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Preparing for Baby No. 3: Have to get expenses under control and kick-start savings!
I'm back on FV with baby #3 on the way, and while my husband and I are obviously thrilled about this precious gift, I also cannot help but slightly panic about what this means for our financial situation.
First, some background:
- For the past couple of years, since the birth of my second daughter, things have been pretty good for us financially - not without some ups-and-downs, but overall we can't complain. In fact, we probably have gotten too comfortable and weren't watching our spending as well as we should have. Our expenses are running pretty high, and while we regularly put money aside for retirement and college, we haven't been saving anything beyond that.
- Thankfully, we don't have much debt other than the mortgage and student loans, both fixed at pretty low rates. Somehow we always manage to pay the credit card bill every month, but those have been pretty high recently.
- Our daughters attend a very good preschool while we both work full-time. We've been very happy with it, but it's not cheap.
So, here are the thoughts that I've been losing sleep over:
- With baby #3, we would have some additional expenses right away: 1) We need a new car (minivan) since ours won't fit 3 car seats. 2) While we still have nursery furniture, we'll need new baby gear (car seats, strollers) as we had given our old ones away. 3) New maternity clothes - I didn't expect to have another baby so soon, so I foolishly gave away all my maternity wardrobe as well.
- We'll need to figure out the babysitting arrangements for the new baby. I won't be able to take more than 3 months off from work this time, and I really don't want to put my baby in daycare, so we'll have to look for a nanny... and nannies here are EXPENSIVE!
- I was hoping to get a nice tax refund to jump-start our savings - well, it turned out that we actually owe quite a bit to Uncle Sam - double whammy!
So, while I try to stay positive and have faith that God will provide, I also know that some things will have to change and that we'll need to get A LOT more serious about our expenses. I had the talk with DH and he is on board in theory (yet, he still continues to spend $). The immediate focus for me is to take care of the tax bill, the property taxes, and credit card bill. At the same time we'll have to create a plan for reducing expenses and jump-starting our savings.
I've always found FV to be a great place to work through personal finance challenges while getting support and good advice from the community. I plan to use it to hold myself accountable and keep track of my progress one step at a time.
Thank you for reading!
- 04-12-2012, 06:53 PM #2
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You didn't say how far along you are but
Why not buy resale on both maternity and stroller not car seat.
Also ask around to see if you can borrow anything.
As far as maternity leave-anyone you know want to earn money for a couple years until daycare or maybe you stay home maybe ask at church?,could you do part time?04-12-2012, 06:59 PM #3
Congrats! Is there a freecycle for your area? That's a great way to get stuff you need free. Check with the main site and they'll direct you to a group for your area(yahoogroups). You can also put out the word on FB. Just ask if anyone has this list of things you're looking for. You can add they can pm you to discuss prices. Also, there are probably lots of resale shops if you check your yellow pages. Those are fun anyway; think treasure hunt. Also.. there are pregnancy forums you can join and they usually have bulletin boards for buying and swapping. Nice way to connect with other moms.Sponsored Links Remove Advertisements04-12-2012, 09:47 PM #4
Some thoughts that I have, with no intent on steering you one way or the other:
1) Definitely by a new to you minivan, NOT new. Lower cost, lower insurance and it has had some of the depreciation.
2) Car seats new--one with a second base, then all you need for a while is just the one. Strollers can be found used at consignment stores and sales. Just google kids consignment and your city and some should pop up. Many even sell maternity clothes if you can time it right.
3) Work: Even if it is just an exercise of gaining information, calculate the cost of you and/or your spouse working. How much money do you really earn after all the costs? If it is negative, rethink the situation. If it is positive, at least you are making money.
4) Pre-school: Does your state offer VPK? This is voluntary pre-kindergarten for 4 year olds and is free in states that offer such a program. Investigate this for when your others turn 4. Be willing to shop around and switch to save on money.
*Sign up for any and all baby/maternity related websites/services. Coupons and freebies galore!
5) This is a stormcloud, so debt payments should be the minimum while you stockpile cash. This only works when you have a plan for that stockpile and do not waste it. So if minimums are $200, but you've been paying $300, you now have $100 a month to save for baby expenses.
Other money savings ideas:
*To lower the interest payments on the credit cards, ask for lower interest rates and shop balance transfers.
*Alter the grocery budget. Can you trim it and get by on less money without sacrificing nutrition and quality?
*Eating out: Do an honest self assessment and cut the budget here.
*Gas: Use hypermiling techniques to cut down on wasted fuel. Releasing the gas pedal early when you see the light turn yellow, slow acceleration when the light turns green. Saves pennies here and there, but it does add up.04-12-2012, 10:47 PM #5
As someone expecting baby #2, here's a few of my thoughts...
1. Put it out there that you're having another. All that stuff you gave away? There's tons of families like yours that are also trying to give their stuff away. I did buy some things (like a car seat) but I've also gotten some things free from co-workers, friends, or family. Check and see what you can get before buying anything. I also agree that maternity clothes are tough - my other child is 5, and I swear maternity clothes have tripled in price since last time. I haven't been able to find any cheap sources.
2. If you go with the nanny option, have you looked into having the nanny watch your older children as well? Maybe you're paying extra for an after school program or something that would be cheaper if you just had the nanny watch all 3. Or maybe having the nanny drop them off or pick them up. You want to find something that works for your family.
3. Now that you know you're expecting #3, I would take a little extra time and plan your taxes so that you don't owe so much. I know that a lot of tax events happen beyond our control, but maybe be a little more vigilant about changing withholdings or whatever to not owe so much next year.04-13-2012, 01:26 AM #6
Check out the website Just Between Friends to see if they have consignment sales in your area. People can sign up and sell their children's, baby, and maternity stuff at reduced prices. Consignment sales were the way I got 3/4's of my stuff for our first two children.
Also, Kid-to-Kid or other consignment stores in your area aimed at infants, children and maternity.04-13-2012, 08:54 AM #7
~You may not need another car just yet. There are car seats specifically designed to fit 3 across, like Sunshine Kids seats.
Last year I joined a couple of local swap groups on Facebook to sell things before our move. Nearly new baby gear and maternity clothes were always easily available and cheap.
I'm no expert on parental leave but run the numbers on perhaps your DH staying home with the baby a few months after your leave is up. In NJ, either parent can take 3 months off of work, unpaid, to care for their baby anytime during the baby's first year. The company my BIL works for offered him paid paternal leave so be sure to research what your state and companies offer.
Look into more flexible work arrangements. You and your DH may be able to negotiate 3 or 4 day work weeks or working from home that will allow one of you to be always at home.
Congrats on #3! ~04-14-2012, 03:10 PM #8
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Do you love your work? Do you crave adult contact? Are you doing very well financially with this job? Maybe keeping your career is a good idea.
Otherwise, does your school district offer a free pre-k? Are there any mom and tots groups in your area to socialize the younger children and give you some adult contact too? Have you run the numbers on how much you will be bringing home with 3 in daycare, your work communte, you work clothing expenses and extras (lunches, drinks out in evening)? How much would you really be clearing from your job with 3 children?
What luxuries do you have at home? Expensive cable, DVR in multiple rooms, very high speed internet (Ok if you work in IT), golf club, expensive gym memberships, mani/hair/pedis, cell phones with everything, netflix you never watch, magazine subscriptions you don't read, book clubs, dining out, convenience food, yard service, house cleaning service, purse, shoe or collectible collections. These are where cuts can be made.
If you make some cuts to these services and can easily live on your husband's income, I would stay at work long enough to purchase the baby items, maternity wear, save up enough to cover all maternity & well baby deductibles.
If you will be off work for 3 months and you will return, what benefits do you have during this break? Can you use your vacation and sick pay? Do you get disability pay for the rest of the time?
Run the numbers on your income during maternity leave + your husband's to see if you need to save anything to cover a shortage in money for living expenses. I would save more.
Freecycle and craigslists have big lots of maternity wear and kid stuff. NEVER VISIT A STRANGER'S HOME ALONE!!
I would recommend the read, 'Your money or your life' by Joe Dominguez. This book is life and lifestyle changing. It's empowering too.
Congratulations on your good news!
Last edited by miss_cas; 04-14-2012 at 03:32 PM.04-16-2012, 08:48 PM #9
When I was pregnant with my son, I got some great deals on E b a y for maternity clothes.04-28-2012, 12:06 AM #10
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Thank you SO much to everyone for your ideas and suggestions! Here is where we are right now:
- Income and property taxes are PAID. It was unpleasant, but it had to be done. I also looked into and updated our W-4 withholdings, so hopefully we won't run into the same problem again next year. With another baby, we will also have another tax deduction, yay!
- My in-laws are helping us buy a minivan, which will help a lot.
- In terms of new baby stuff, I think the only new thing that we will buy is a carseat/stroller combo. The rest, as everyone suggested, we will just borrow or get on craigslist. I am also so grateful that we still have all the furniture - we will have made the most of it by the time baby #3 is done with it!
- We have been rearranging a lot in our house. My two girls are now sharing one bedroom, which leaves the nursery for the baby. We are also going to convert our den/office into a playroom (as in, a place to keep all their toys and projects contained). So, we're in the process of setting up a little home office in our master bedroom. Making all the changes in the house to get it ready for the new baby actually makes me feel very excited and also gives me a sense of control. It is very comforting.
To answer some of the questions that have been asked:
- I do love my job, which is why I really do want to go back to work after having the baby. I also make more than twice what my husband makes and have excellent benefits, so I think if we had to consider having one parent stay home, it would have to be him.
- I will also be earning some pay for the first 12 weeks while I'm on maternity leave, through a combination of short-term disability leave and California Paid Family Leave. My husband can also take up to 6 weeks total (I believe) under the CPFL.
- We are already pretty good in terms of fixed expenses. We don't have gym memberships, car payments, high cell phone bills (mine is paid by my work). I try to watch the grocery budget, but have to admit that when things get busy/stressful, I'm less likely to cook. The biggest issue is discretionary expenses (Starbucks, clothes, toys for kids, lunches at work).
- I am due in November, so I still have a few months to get things on track. I really see this pregnancy as a blessing because it will help us sort out our priorities and get better organized.
Now, on to our next steps:
1. Create a budget and stick to it. I will start tracking our expenses more closely and come up with a monthly budget. Then will sit down with DH to agree on a plan of action. We have to figure out how to live on our income as if baby #3 is already here. Once we do that, we can just put the extra that we have every month until the baby arrives into savings.
2. Switch to a cash/envelope system. We've done this in the past, and I believe that works the best.
3. Look for areas to trim some fat. Grocery shopping would be one of them; I know I can be better at planning our meals. My mom gave me an e-Meals subscription as a gift. It's a great plan because it creates weekly meal plans and shopping lists based on whatever is on sale that week. And since they just added a plan for our local grocery store chain, I will be able to get the most savings out of it.
4. Look for other ways, big and small, to trim our budget.
5. Use FV for inspiration and support!
Thanks again for reading... I will try to update this thread regularly with our progress.05-01-2012, 01:25 AM #11
Sounds like you have a good handle on things! If between the two of you you have 18 weeks leave that's almost 5 months free daycare! Nice!
Knd of O/T, but instead of getting a travel system have you thought about getting one of those car seat carrier snap in strollers (can't post a link or pic -- still too new! )?
So much more convenient than a travel system and you can use them with almost any kind of infant carrier car seat and I see them on CL for around $25 all the time. Just a thought!
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