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Refinance the mortgage or get rid of the nanny? FINAL DECISION POST #135 - Page 3

post #41 of 139
Quote:
Originally Posted by lovemykeiki View Post
Not sure. I would stop doing it if I were in the red, or if we had to invest in it to make it work. I'm not sure I consider having the nanny "investing" in my business. Because like I said I consider childcare a shared expense. Maybe you could elaborate on your line of thinking with this question??
I think you are already in the "red" if you are using your savings to sustain your lifestyle.
post #42 of 139
Thread Starter 
never mind
post #43 of 139
Thread Starter 
Quote:
Originally Posted by velochic View Post
Is the nanny really a nanny or just a babysitter? That is, does she just watch your kids or does she take the place of you (and I don't mean that in a negative sense). Does she take them to the doctor, do your laundry, clean your house, make your meals, etc.? If she is really a nanny, then she is worth the money, but if she is just a babysitter, I think she is being overpaid and you would be better off with a mother's helper for the times you are working.
She is a nanny.
post #44 of 139
I don't have much to add beyond what PPs have already said, except to offer this Web site that helps you comparison shop for the lowest-priced utilities:

http://whitefence.com/

I'm sure it's not the answer you're looking for to the whole problem, but it could be a tiny piece that helps take the edge off.

Best of luck. It's a tough position to be in.
post #45 of 139
I would get rid of the nanny but I know that's not what you want to hear.

Good luck.
post #46 of 139
Have you considered getting an au pair instead? I hear they are often less expensive than nannies, though can come with their own issues.
post #47 of 139
Quote:
Originally Posted by lovemykeiki View Post

We are halfway done with our current 15 year, so we can go another 7.5 years at $4500/month or refinance and go another 15 years at $3100/month.
So you'd be adding another 7.5 years til your house is paid off in order to keep your nanny and build your business?

I'd have to really, really, really hate being a SAHM to pay a nanny *all* of my earnings *plus* $5K of DH's earnings every year. And that's not even touching the fact that you're signing up for another 7.5 years of mortgage payments.

I would personally give a lot of thought to what it would mean for your family financially to have your house PAID OFF in 7.5 years. How many children do you have, when will they go to college, what type of retirement planning have you done, etc? You could do so much with no mortgage in 7.5 years, kwim?

When would your youngest child go to school? How much of a wait time are we talking here? It can't be more than 7.5 years, and I'd kick myself with every mortgage payment above and beyond the 7.5 years you have left.

The only other thing I'll add is that I would definitely consider refinancing to get a lower interest rate, but I would keep paying whatever necessary to get it paid off in 7.5 years. Heck, you could refinance for a lower rate and keep paying what you're paying now and have it paid off even sooner.
post #48 of 139
Quote:
Originally Posted by lovemykeiki View Post



I don't need any money to start up my business. I have all the equipment and my skills. I hung out my shingle and started making money right away. I've never been in the red, unless you count the nanny - which - as I said - I'm not completely convinced that she is totally MY business expense.

I see childcare as a shared expense.
I can see where one might see it this way, however the bottom line is if you get rid of the nanny and put your business on hold til September 2010 (which will truly be here before you know it!), you'll stop losing money. Right now. The end.

No.way.on.earth. would I add 7.5 years to my mortgage to avoid getting rid of a nanny for 17 months.
post #49 of 139
Quote:
Originally Posted by wifeandmom View Post
I can see where one might see it this way, however the bottom line is if you get rid of the nanny and put your business on hold til September 2010 (which will truly be here before you know it!), you'll stop losing money. Right now. The end.

No.way.on.earth. would I add 7.5 years to my mortgage to avoid getting rid of a nanny for 17 months.
She wouldn't even have to put her business on hold, just get rid of the nanny and make it work.

BAM, $30,000 in expenses gone. It's not about a business expense its about your total household financial picture.

Don't think about the "but, but but...." just make it work.

But like you said wifeandmom there is no way that I'd want all of my hard work + extra to go towards paying someone elses salary. As a business owner it crushes my soul to even think of it.
post #50 of 139
Quote:
Originally Posted by wifeandmom View Post
So you'd be adding another 7.5 years til your house is paid off in order to keep your nanny and build your business?

I'd have to really, really, really hate being a SAHM to pay a nanny *all* of my earnings *plus* $5K of DH's earnings every year. And that's not even touching the fact that you're signing up for another 7.5 years of mortgage payments.

I would personally give a lot of thought to what it would mean for your family financially to have your house PAID OFF in 7.5 years. How many children do you have, when will they go to college, what type of retirement planning have you done, etc? You could do so much with no mortgage in 7.5 years, kwim?

When would your youngest child go to school? How much of a wait time are we talking here? It can't be more than 7.5 years, and I'd kick myself with every mortgage payment above and beyond the 7.5 years you have left.

The only other thing I'll add is that I would definitely consider refinancing to get a lower interest rate, but I would keep paying whatever necessary to get it paid off in 7.5 years. Heck, you could refinance for a lower rate and keep paying what you're paying now and have it paid off even sooner.
She's not adding another 7.5 years, she's adding however long it is until she can resume making payments at the level they are now. I would assume that would be when her business is making enough or when the younger child goes to school and the nanny hours drop dramatically. Probably about 18 months.
post #51 of 139
Why not get a cheaper nanny? There are a lot of people desperate for work out there, I bet you could find someone at half the cost.
post #52 of 139
Quote:
Originally Posted by Magpie1972 View Post
There is nothing wrong with enjoying it more. I do see some harm in disliking it to the point that you'd put your family in financial peril rather than take care of your own children as a joint unit. I say this as a mother of four, one set of twins who enjoys the heck out of her work. You do have to make sacrifices. Sacrifices are typically not or our first choice. I don't think anyone begrudges the OP for liking work. We just don't all have the luxury of doing what we like all the time as humans. I have never met one who does except my three year old. He's in for a rude awakening.

Working from home is a different beast altogether. You almost work MORE in my opinion than you would doing a straight 8 at a desk. There are lots of factors to weigh. A happy Mom is a better Mom.
But everyone expects to lose money in the first year of a business. It would not cost their family if her husband would agree to reducing their exorbitant mortgage payment. Do you think $4000 a month is reasonable or affordable?
post #53 of 139
Thread Starter 
Whew! Thanks for all the replies, ladies. I appreciate your input. Lots to think about.
post #54 of 139
Thread Starter 
never mind
post #55 of 139
Thread Starter 
*
post #56 of 139
Quote:
Originally Posted by velochic View Post
Is the nanny really a nanny or just a babysitter? That is, does she just watch your kids or does she take the place of you (and I don't mean that in a negative sense). Does she take them to the doctor, do your laundry, clean your house, make your meals, etc.? If she is really a nanny, then she is worth the money, but if she is just a babysitter, I think she is being overpaid and you would be better off with a mother's helper for the times you are working.

Regarding refi - this is the time to do it.
DITTO! I was just getting ready to post that if she is working for 30/wk that's 1560 hrs per year at $20 per hr. I would think she should make more in the ballpark of $15 per hour. I pay my mother's helper $8 per hour and she is a college grad.
I would:
1. pay nanny less & refi
2. refi and quit saving the nanny cash and monthly payment then restart you biz in a yr or so.
post #57 of 139
Thread Starter 
never mind
post #58 of 139
okay I see you pay her $15 an hr. So you pay taxes on her, etc, right? Do you deduct taht as a biz expense?
post #59 of 139
Is the child with special needs the one that is in school right now?
Does you nanny always work with both kids, or is she on the clock while your oldest is at school too?


I have a feeling that you answered that already
I'm just thinking that the first place I'd cut back on the nanny would be if she spent some hours with just one child...Try to get her hours closer to 20/week instead of 30 hours
post #60 of 139
Thread Starter 
Ok - here is a basic budget. The total for this is $67,000.

I said $75,000 because I'm conservative and like to have a cushion for when stuff happens - like the washer/dryer going out, trip to the ER, septic tank backing up, etc. That sort of stuff that life throws at you.

Also, I'm sure I've missed a few things and I want to make room for that stuff by padding it a bit. I don't have time right now to get a line-by-line budget prepared for you all to look at. Maybe later...

I've also included every expense relating to personal and business, so you see the big picture.

Ok - help me whittle this down!

Accountant - $1500
Auto (fuel, registration, maintenance) - $6200
Bank Fees - $360
Cell Phone - $1320
Childcare (other than nanny) - $2000
Computer (software, maintenance) - $900
Dues and Subscriptions (business) - $300
Housecleaner - $3600
Gifts Given - $600
Classes/Other - $900
Groceries - $6000
Home Repair - $2500
Homeowner’s Fees - $170
Household - $3000
Insurance:
Auto Insurance - $900
Dental Insurance - $720
Disability Insurance - $400
Health Insurance - $10,800
Home Insurance - $3000
Hurricane Insurance - $900
Life Insurance - $3900
Medical (meds, co-pays) - $3600
Phone (land-line – necessary for business) - $360
Postage and Delivery - $300
Property Tax - $3100
Supplies (business related) - $600
Website (business) - $180
Utilities:
Garbage Pickup - $150
Electric - $4800
Internet Access - $600
Water - $300
Unexpected Issues - $3000
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Mothering › Mothering Forums › Natural Living › The Mindful Home › Frugality & Finances › Refinance the mortgage or get rid of the nanny? FINAL DECISION POST #135