Affording a second child

[bowies]

This gives me a lot of anxiety. It's the #1 reason I can't commit to TTC.

For those in two income households that utilize paid care (daycare, preschool), how did you find room in your budget? Are you able to put any money into savings? Factoring in daycare, food, clothing, diapers, about how much extra are you spending per month?

[Deleted]

We don't save much (but we are still saving enough for retirement and a bit for college). There's just not much extra right now.
Daycare is the biggest kicker (and my bill is low compared to many). Food and clothing and diapers are cheap (I cloth diaper and shamelessly accept hand-me-downs). Our bills are probably only about $700/month higher factoring in DD.

Unless you include the alcohol to cope with parenting.

[Saudade]

DS2 is 15 months. The increase in sustained costs has included: daycare, diapers, and formula (when I lost my supply). L&D were one time costs. Diapers has lessened slightly due to DS1 being in underwear. Formula is not a factor anymore since he drinks milk. So really, it's daycare now. We have ridiculously cheap daycare, although it's expensive for the area. We pay $1000 for full-time care for an infant and a 3 year old at a center. This will drop next month when DS2 goes to the toddler room. The increase hasn't been that hard to deal with, I work a couple more hours, DH works a couple more hours, and we're back to where we were before the daycare costs.

However, it does make me panicky for #3.

Also, this says nothing about how much I spend in clothes. I said I was going to use DS1's clothes, but I still end up buying clothes for DS2.

[gibbinator]

We really haven't spent much extra on DS2 (except daycare obviously, but I'll get to that). We've reused all of ds1's old clothes, furniture, crib, cloth diapers, etc. I spend maybe $30 a month on disposables/wipes, and the grocery bill is a bit higher (obviously that will increase with time too).

Daycare is the big number. It's kind of insane that each single daycare spot is more than our mortgage. We can't cashflow two in daycare and knew that ahead of time so we spent the 1.75 years I was pregnant and on mat leave saving X dollars/month to have one daycare totally paid for before that year started. We're a couple thousand short at this point but at worst we'll put those 2 months on dh's line of credit and pay it back once ds1 starts pre-K in sept 2016.

[jeaniebueller]

The 5.5 year age gap--so that we only have one daycare payment and one in diapers, helps immensely.

[Deleted]

I am choosing to ignore it. That sounds horrible. We save a little bit now and will probably save nothing once the baby comes. We also wont do as much probably because the thought of doing things now that DD is 2.5 gives me anxiety and with another baby I just cant even imagine. I think it will be tight a while but soon DD will be in school and we will just have to pay for before and after care and hopefully it will be ok. We dont live on a tight budget now but will have to be a lot stricter once we have another. And vacation less. And I think I am giving up my NFL season tickets. My team sucks anyway. My car payments will also probably be done in the next year or so so that should help. That frees up half the daycare costs.

I plan to take a longer leave this time and my work subsidizes none of it. SO thats a huge hit. Besides that I think its just daycare and diapers. I want to try to leave DD in daycare if I can while Im home.

[badtzmaru22]

We just don't save much/anything. It works fine on paper with a little going into savings, but it's tough to actually stick to IRL. We just paid off DH's car though, so we should be able to save at least that much every month into our general savings. (We do have retirement savings come right out of our checks). We keep reminding ourselves that it's going to be tight for a while, but worth it to have the kids. DD will be in school FT in two years, so we are crossing our fingers that both cars can hang on that long!

[Velar Fricative]

When we expected to have two in daycare starting in January, the money would have come from a combo of job raises, a few debt payments being done this fall, less eating out and less money into regular savings.

[hocus2]

One of the reasons we had our kids close was the it made it cheaper to have them. I feel like this is a dynamic unique to our area. Due to very limited infant care options having a nanny until my youngest was 2 made sense. My kids were only 19 months apart so we had a nanny for about 3.5 years. 

Once they entered daycare it was a bit cheaper. Now that we're dealing with subsidized pre-k it is cheaper still.  The cost never entirely goes away though, so it is important to consider what you can really swing for a prolonged period. I guess we're down about 40% from our max high. We could certainly do cheaper camps which would bring that even lower but for now we're very happy with our camp. 

Once the kids are in middle school I feel like the child care budget will just convert into an activity budget.

[Deleted]

We still put money into retirement, but it's not much. DC for 2 is insane-It's twice our mortgage. They are spaced 3 years apart so that we had minimal time paying 2 in DC. I am literally counting down the days (and dollars) until Kindergarten next year for DS1.

We had 2 boys so clothing and baby gear were all reused. DS1 was potty trained by the time DS2 came so we still only have 1 in diapers.

We figure DC costs are short term, so if we can just get through financially until they are in school, hopefully it will even out then.

[dcrunnergirl52]

We went from zero daycare payments to two, so that was a huge shock. Thankfully, it left room in the budget for savings. Then DS2 came along, and we knew we'd save very little while he was in daycare, as we'd be paying about $1K/week for all three kids.

But, we also knew it was only for a year. When DD and DS1 start kinder in two weeks, I feel like we're going to be rolling in our coins like Scrooge McDuck.

Daycare and diapers were really the only extra costs right away for DS2.

[cincodemayo]

We will be super screwed if I don't get the raise I'm expecting in February. If I get that, it will cover 80% of daycare for kid 2. IF I don't, we are going to have to cut back major on weekend activities and the like. We put very little into college funds right now as it is, and it's just going to be like that until the kids are older.

[niq]

Before I took my most recent job, the plan was to scale college savings way back as long as there were two in daycare.

The USDA estimates the cost of a second kid -- excluding child care and housing (where you don't have a lot of control) -- at around $400-600 depending on COL and income level (i.e. high income households spend more money on their kids because duh).

[blueberry10]

Like others have said, daycare is the killer. We have two years of paying $600/week until DD heads to kindergarten, and we aren't putting much into savings right now. We made sure we had a decent cushion in advance of this, since our cash flow is pretty tight right now and we knew we'd be close to just treading water for a while. It's ugly, but it helps to know it's temporary. We're trying to cut back on expenses like eating out, but the extra busyness of two kids makes me sometimes want to just throw money at some things to make them easier.

[laurack]

we aren't saving anything really, outside of 401k contributions.

the biggest cost increase has been daycare. We were originally sending my daughter to a more expensive place for which we paid $400 per week. Then we found a cheaper center while I was pregnant with my son, a little over $600 was our payment for both so it was a 50+% increase in cost. Most centers do offer a 10% discount for the second sibling I think (mine does). Now it's gone down slightly but not much (every time it goes down they then seem to have an inflationary increase soon after!!)

to be honest I hardly consider the other costs because daycare is so crippling lol. Yes my grocery bill has gone up. I buy as few clothes as possible (I accept hand me downs) and we generally took as much "stuff" from friends as people were offering

I breastfed but did some formula supplementation with #2 but it wasn't a huge cost, about $30/month, and I got a free pump from insurance.

[boxerdog]

We are waiting until we pay off H's truck before we have 2 in daycare.

Then, if all goes according to plan, it will only be about a year of paying for 2 in daycare before DS goes to free pre-k.

We just won't save anything and pray we don't have any emergencies in that year.

[qcinoct]

there was zero savings when we had both in full time daycare, and we carried more debt than we're comfortable with. That was > $24k/year. Thankfully, it was only for 1.5 years because I'm in Canada (year mat leave plus kids start full time public school the year they turn 4).

[bbonanza]

DH moving to new jobs and getting increases really helped for us, we did continue to put away for retirement, and minimally for other savings, but it was hard at first. Then we had DD3 and we had 3 in daycare for a year  . That was rough, and I'm sure people wondered why I kept working, but 3 years out from that with and only one left in daycare, we are back to saving more finally and were able to take our first family vacation to Disney in March. 

[laurenh]

This is probably not the answer you want but we just sort of went for it. We knew the money was there but that we'd have to tighten down fun spending and frivolous things like weeknight takeout too often. We also knew that it would mean that any substantial saving (other than retirement) would stop until we didn't have two in daycare. It isn't for everyone but it was something we were both comfortable with. And then I got pregnant with twins. And cried over finances and the fact that daycare was going to cost more than what my H nets in a year and that we literally couldn't afford it. In the end we are extremely fortunate and my parents cover the shortfall or else one of us would have had to either quit or pickup an extra job. We're switching to an au pair for the twins and sending DD1 to daycare PT starting in 2016 and if it goes well it will bring us back to a more comfortable position.

I think it really comes down to how comfortable you are in lowering/stopping your saving while two are in paid care, or seeking out what other avenues for child care there are. Not sure where you are but I know some of my friends have been able to find good in-home daycares vs centers and it has been a decent savings for them.

[SJ]

If we stayed in our current house forever, we would be fine.

However, we are saving quite aggressively for a DP. We should wait until we buy a new home and are settled to TTC #2, but I'm not sure that will happen.

We are saving such that we could cash flow another daycare payment instead, but our housing payment will also take a huge jump if/when we buy, so I am nervous. UGH. I really don't want to buy a big "forever" house, but I have run out of excuses and it is very important to my husband.

We also are not sure how many kids we will end up with. If we have more than 2, we are assuming that DD would be in school by the time #3 is born, but also might switch directions and go the nanny route if the daycare payments get too insane.

[justjen]

A few things helped:
-DH got a promotion right as I went back to work
-We budgeted* based on DH's base salary, but he often gets a commission

That said, we don't save that much right now. I mean, we didn't reduce our retirement contributions, so that's still ongoing. And we have an efund, though not as large as it should be. But when we get extra cash, we tend to throw them at small home projects rather than savings (our house needs a lot still).

The real question is... do we have enough extra to support a third?

*We don't really budget. This was me plugging our regular expenses and our incomes into excel, and seeing if we had enough to cover things on paper at least.

[lmb5109]

Aug 27, 2015 12:18:59 GMT -5 jeaniebueller said:

The 5.5 year age gap--so that we only have one daycare payment and one in diapers, helps immensely.

DD will be 4.5 when we have another one so she'll be out of diapers and we'll have 2 in daycare for 13-14 months and then DD1 will go into kindergarten. I pray we have another girl so I can reuse all of DD1's clothes!

[Deleted]

Aug 27, 2015 12:41:24 GMT -5 lmb5109 said:

Aug 27, 2015 12:18:59 GMT -5 jeaniebueller said:

The 5.5 year age gap--so that we only have one daycare payment and one in diapers, helps immensely.

DD will be 4.5 when we have another one so she'll be out of diapers and we'll have 2 in daycare for 13-14 months and then DD1 will go into kindergarten. I pray we have another girl so I can reuse all of DD1's clothes!

I found a random to trade clothes with when I found out I was having a girl. Highly recommend if you find yourself with a boy.  

[mswax]

We bought a house and made a budget based on paying for 2 in daycare. We could afford DS3 because DS1 was going to kindergarten, so his expenses were going down (though not even close to 0). Mostly, we are just lucky to have good jobs, and we cut back on travel and savings outside of retirement.

[bowies]

So if we have an e-fund and continue on with our 401ks, we'll be fine right? Assuming we can cash flow daycare?

ETA: We don't travel now so we wouldn't be cutting back there. Our house is what scares me. It still needs some work and we want to move in a couple of years. We have very minimal help from our parents (zero from the ILs, but my parents will send clothing and visit us occasionally for a night).

ETA2: I asked my H when his SLs are due to be paid off and he said in about 2 years. Oh thank God. Assuming a year of pregnancy/ML, that gives us one year feeling pinched. I'm feeling better about this.

[purplecow0206]

At this point, we're both in the middle of looking for higher paying positions. We're hoping to both be settled into something new by next June so the combination of finishing paying off the car in July 2016, at least one (if not two) higher paying positions by then and finishing off one of my student loans by the summer of 2017 will open enough cash flow to cover DC/preschool for two once I'm through with ML for hypothetical #2.

Where we are right now, we just don't feel comfortable adding that much more in expenses into our budget though, emotionally, we're both kind of "ready" to go for #2.

[kershnic]

We jumped straight in with two so we'd never know the difference.

Our situation has changed a few times already regarding who is working/where the kids are during the day, but bottom line is that we don't really save beyond retirement (which is adequately funded). 529s get a small amount. We would have a nicer lifestyle with one kid. But I can't decide which one to give up.

[pizzanight]

I got a promotion that meant on paper we could afford two in daycare. Unfortunately it was not very realistic because it didn't take into account any other additional expenses - some of which are necessary (diapers, formula) and some of which just make our lives easier (cleaning person, booze). We slashed our savings outside of retirement to get a handle on things, but it sucked and I was nervous about money a lot. I got another raise in June that fixed things - it was unexpected, but it's been a huge relief.

[anna7602]

Aug 27, 2015 12:18:59 GMT -5 jeaniebueller said:

The 5.5 year age gap--so that we only have one daycare payment and one in diapers, helps immensely.

This, more or less. The age gap also means more years working and saving for both of us. I likely wouldn't have worked at all for a while if I'd had 2u2 or paid through the nose for more childcare (not just during my own working hours). As it is, i do spend more on evening coverage now in situations where I didn't need an extra set of hands when I only had one kid.

[heygrey]

I'm changing careers to give us a slightly higher hhi (and overall better family life), but daycare will kill us. We're also at the point too where we can't have another kid in our current apartment so we need to up our rent budget or find a mortgage payment. (Or move out of this city entirely, but I realk don't want to do that.)

It is entirely likely that we will space them 4 years apart or just be OAD because we would ruin ourselves financially if we had another in the next year-ish. That doesn't seem fair to the kid we currently have, the one we'd be inviting into the stress, or ourselves. If the housing part was a non-issue I would be more inclined to wing it.