Refinance the mortgage or get rid of the nanny? FINAL DECISION POST #135 - Page 4

[lovemykeiki]

Originally Posted by jentilla

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?

Yes.

[lovemykeiki]

oops

[sogriffin]

I think that if we were in that situation, with the info you have given here, I'd have to cut the nanny down to 20 hours a week and dh would have to agree to refinancing the mortgage with a 15 year loan. And of course we'd both have to take a good look at reducing other expenses wherever we can.
I think we would both look it at as a compromise until we could meet our yearly expenses and restock the emergency fund. Once we were back to where we would needed to be financially, then we could start paying the $4500/mo again towards the mortgage and go back to 30hours a week with the nanny.
I just don't see any solutions that don't involve a sacrifice of one or both of your ideals, at least for the short-term.

[wahlmn]

See some thoughts in red.

Originally Posted by lovemykeiki

Accountant - $1500
Auto (fuel, registration, maintenance) - $6200
Bank Fees - $360 Can you find a cheaper bank?
Cell Phone - $1320
Childcare (other than nanny) - $2000 What is this for?
Computer (software, maintenance) - $900
Dues and Subscriptions (business) -m $300
Housecleaner - $3600 This number seems super high! How often do you have a house cleaner? We cut ours back to once a month at about $100-$150 each time
Gifts Given - $600
Girls 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 This sounds high to me too.
Hurricane Insurance - $900
Life Insurance - $3900
Medical (meds, co-pays) - $3600 Can you do a pre-tax account?
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

[dsaucone]

Am I the only one that noticed . . . business and nanny aside, with your DH's expected income of $120,000 and your expected expenses of $130,000 you're still overbudget?

Sorry if this has been said, I tried to read all the replies, but started skimming through towards the end.

[Delicateflower]

Why is your power bill so high? Can you cut back on the cleaner, get her less often and do a quick swipe in between? I also think $2000 in childcare in addition to a nanny is a lot! Is this covering her vacation? Can you get a better cellphone deal? Do you both need it for your businesses?

[lovemykeiki]

Originally Posted by dsaucone

Am I the only one that noticed . . . business and nanny aside, with your DH's expected income of $120,000 and your expected expenses of $130,000 you're still overbudget?

Sorry if this has been said, I tried to read all the replies, but started skimming through towards the end.

What is your point?

Do you want to help me figure this out? Because your comment sounds more like a slam than helpful. Sorry if I am misunderstanding you.

[skueppers]

Is that life insurance cost for 1 or 2 term life insurance policies, or for whole-life policies? It seems awfully high for term life, unless you and/or your husband are older or have significant health issues. It's typically possible for people under 40 to buy $1,000,000 worth of 20-year term life insurance for under $100/month.

I agree with the other poster about the childcare expenses -- what is that $2000 covering?

You may also be able to find a less-expensive house cleaning option.

Is it possible for you to learn to do whatever the accountant is doing for $1500 a year, or would that just be too time-consuming?

$500 a month seems reasonable for groceries, but what are you spending $250 a month on for your "household" expenses?

Some things I'm not finding on there that are in my budget include:

Clothes/shoes
Entertainment/Travel -- things like dining out, books, movies, day trips, visiting family, whatever.

[shayinme]

Originally Posted by Delicateflower

Why is your power bill so high? Can you cut back on the cleaner, get her less often and do a quick swipe in between? I also think $2000 in childcare in addition to a nanny is a lot! Is this covering her vacation? Can you get a better cellphone deal? Do you both need it for your businesses?

Actually if she is working at home, that is probably why her electric is so high.

The first thing that jumped out me is the housecleaner, I would probably get rid of the cleaner.

[Knittin' in the Shade]

From that budget, I'd chop the housecleaner off first thing. If you and DH both work from home, you cand find a way to divvy up the cleaning jobs and get it done without that expense. The homeowner's ins seems awfully high - maybe shop around and see if you can get that lower? The extra childcare also seems quite high - is that for coverage when the nany is sick/on vacation? The computer costs seem high also - $900 a year, you can almost buy a brand new laptop every year for that cost. What sort of software and maintenance is costing that much? There's gotta be a way to whittle that down.

[lovemykeiki]

Originally Posted by skueppers

Is that life insurance cost for 1 or 2 term life insurance policies, or for whole-life policies? It seems awfully high for term life, unless you and/or your husband are older or have significant health issues. It's typically possible for people under 40 to buy $1,000,000 worth of 20-year term life insurance for under $100/month.

This was for 2 term life policies - $1,000,000 for each of us.

I just called the insurance company and reduced our life insurance to $750,000 each. I really think it is enough. This reduced the premiums and saved us $500/year.

Originally Posted by skueppers

I agree with the other poster about the childcare expenses -- what is that $2000 covering?

That was when our youngest was in a daycare earlier this year, and also covered a few drop-in days. This was a one-time expense and will not be ongoing.

Originally Posted by skueppers

You may also be able to find a less-expensive house cleaning option.

I would rather give up other things that give this up.

Originally Posted by skueppers

Is it possible for you to learn to do whatever the accountant is doing for $1500 a year, or would that just be too time-consuming?

Too time-consuming and too much over my head, tax-wise. We need the accountant to help us keep things in order. Again, I'd rather cut back elsewhere than give up the accountant.

Originally Posted by skueppers

Some things I'm not finding on there that are in my budget include:

Clothes/shoes
Entertainment/Travel -- things like dining out, books, movies, day trips, visiting family, whatever.

Clothes/shoes would fall in the "Household"category.

We aren't doing any traveling right now - no entertainment, no eating out.

[lovemykeiki]

Originally Posted by Delicateflower

Why is your power bill so high?

We have tried and tried to get the power bill down, but electricity is very high here. We have all the power-saving light bulbs, we have solar hot water, we turn off lights. We will keep on trying.

[dsaucone]

Originally Posted by lovemykeiki

What is your point?

Do you want to help me figure this out? Because your comment sounds more like a slam than helpful. Sorry if I am misunderstanding you.

No slam meant at all. I'm just pointing out that loosing the nanny and putting the business on hold (which is what the majority of the posts seemed to be talking about - seeing as how loosing the nanny and continuing the business doesn't seem to be feesible) isn't a good solution. You'd still be in the red. That's all.

[lovemykeiki]

About the housecleaner -

We aren't giving her up!

Seriously, we have a large house. 5000 square feet. We both work at home and have home offices, so we fill out this space. I know it sounds like a lot, but consider what it would cost us to rent the space for our offices and you can see that buying the bigger home was a better deal. Instead of paying rent money to some office building, we are paying our "rent" to ourselves.

And because the house is so big - it is hard to keep up with. So having the housecleaner 3 hours a week is great. We still have to clean, too.

[lovemykeiki]

We are going to do first is try and cut our expenses as much as possible. There is money coming in this month - so it's not like we are dead in the water.

[jentilla]

Accountant - $1500 seems a bit high, but you probably write it off.
Auto (fuel, registration, maintenance) - $6200 [I]If you both work from home, why do you spend over $500 a month for your vehicles. I SAHM and Dh works from home and we spend "maybe" $100.
Bank Fees - $360 new bank, that's ridiculously pricey.
Cell Phone - $1320 Again..you work from home, we have trac phones
Childcare (other than nanny) - $2000 date nights? reduce that.
Computer (software, maintenance) - $900 write off?
Dues and Subscriptions (business) - $300 write off?
Housecleaner - $3600 every week? reduce.
Gifts Given - $600 try cutting those down to homemade
Girls Classes/Other - $900
Groceries - $6000
Home Repair - $2500 what is this for?
Homeowner’s Fees - $170
Household - $3000 what is this for?
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
I assume you can deduct some of this, but you LI seems very high.
Phone (land-line – necessary for business) - $360 write off
Postage and Delivery - $300 write off
Property Tax - $3100
Supplies (business related) - $600 write off
Website (business) - $180 write off
Utilities:
Garbage Pickup - $150
Electric - $4800 REDUCE $400 a month?
Internet Access - $600
Water - $300
Unexpected Issues - $3000 is this clothing, etc?

You could likely shave off at least $5,000 and with a refi, even more.

[Mama Dragon]

Accountant - $1500 (anything you can do to lower this?)
Auto (fuel, registration, maintenance) - $6200
Bank Fees - $360 (how? I pay $7 a month for gold checking and have free business checking)
Cell Phone - $1320 (can you lower this?)
Childcare (other than nanny) - $2000 (seems weird to have $2k when you're already paying someone else $30k, kwim?)
Computer (software, maintenance) - $900
Dues and Subscriptions (business) - $300
Housecleaner - $3600 (get rid of, or drastically cut down)
Gifts Given - $600 (drastically cut down)
Girls Classes/Other - $900 (cut down?)
Groceries - $6000
Home Repair - $2500
Homeowner’s Fees - $170
Household - $3000 (what is inluded in this? does it include things like paper towels that you can stop buying and use rags instead?)
Insurance:
Auto Insurance - $900 (have you shopped around?)
Dental Insurance - $720
Disability Insurance - $400
Health Insurance - $10,800
Home Insurance - $3000
Hurricane Insurance - $900
Life Insurance - $3900 (ouch - do you need to carry that much?)
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 (can you lower that?)
Internet Access - $600 (can you get cheaper? I'm moving to fiber optic for $20/m cheaper then DSL)
Water - $300 (do you have automatic sprinkers that you can stop using in the summer?)
Unexpected Issues - $3000

Would the nanny quit if you cut her pay? Not a lot, but some? All told, I would not extend my mortgage by 7.5 years to keep a nanny for 2ish.

[jentilla]

Well with 5,000 sq ft I see how your bills are so high. Have you guys thought about downsizing? We have a 3/2 with 3 kids and 1700 sq ft. Dh has a home office. Now sometimes it feels tight, but moslty b/c we are a bit disorganized right now. Just a thought.

[Mama Dragon]

I also had the thought after I posted of finding a smaller (not too small, just smaller) house, you could probably find a good deal on a foreclosure or someone doing a short sale.

[p1gg1e]

Id not Refi. Id cut back on the hours of the nanny or the house keeper. You said your DH's income may go down. I know its sounds harsh but you may have to put your feelings , wants ( even your dh will have to himself ) comforts, aside. This isn't a SAHM vs WOHM thing you aren't making enough to justify the nanny....mainly the reason I don't work , I like being a WOHM mom better but its just not something that I can afford right now.

Your DH is right to have a 15 yr loan , that's not the issue, the added nanny , house keeper and expenses are. Take care of your 4 walls first. Its reality.