How do you afford for one parent to SAH?

[Samjm]

I’d love some honest feedback from those of you who stay at home with your children on how you manage to afford it.

Right now, both DH and I work.

We have an extremely low grocery budget – around $40 a week. We have 1 car paid off, and very low payments on the second car. We seldom eat out (maybe twice a month). We live out in a semi-rural area, because housing is cheaper out there. Our mortgage is on the low end for this area. We are very frugal with regards to heating etc. We have our house set at pretty low in winter. Yes, it’s chilly, but that’s what sweaters are for. We don’t go out to movies or any other clubs or entertainment. We have $0 in credit card debt.

We do have cell phones, Netflix and Dish Network, which we could drop if needed – saving a total of $100 a month. (It’s not enough to warrant dropping at the moment since we do both work).

We seem to be doing everything right, and yet there is just NO WAY we can afford for me to stay at home.

So how do you do it? The only thing I can possibly figure out is that families with one stay at home parent are not contributing to retirements savings at the level we are.

If we work out the potential savings for me to stay home, we still fall about $800 short a month. And this is for our normal lifestyle. We are not extravagent at all.

So, for those who stay home – do you have savings for retirement? Do you have a lot of credit card debt? I’m not saying that this is the only way to do it, but I don’t see other choices. If they’re out there, I’d love some enlightenment!

[Aeress]

I am not currently putting anything into savings or towards retirement. dh has a retirement, an some odd other savings that he puts money towards.

we lost about 20,000 in income but after paying for childcare wich was about 9-10,000 a year, I really only made 10,000.

we currently pay for my car, utilities, cell phone, dsl, grocery/incidentals all out of my dh's income.

[Twocoolboys]

I have been a sahm for several years. At times, things have been pretty tight financially. Right now, my dh is doing really well in his career, so we are not doing too badly. We still have to be frugal. Here are a few things I do to save money:

I hang laundry to dry instead of using my dryer. I save about 20-30 dollars a month.

I don't generally buy things like wrapping paper and birthday cards. I recycle paper and use other things (usually the funny pages) and the kids make cards.

We don't have cell phones and only have very basic cable. We do use netflix, but for us, that makes more financial sense.

We save the credit card for emergencies only and then we pay it off right away or in as few months as possible.

We shop at garage sales and thrift stores for a lot things. And, if we are going to make a major purchase, we save for it and don't buy it until we can afford to pay cash for it. We save a little money every month so that if a large, emergency expense comes up, we can cover it. Like we had to get our hot water heater replaced last year and we had the money in savings.

As far as retirement savings go, I have to ask how much you are putting in? What percentage of your income? While we do put some money into retirement every month, it is not a whole lot. I'd have to look up exactly how much it is. I prefer to live the life I want today rather than working my butt off trying to take care of tomorrow. I will work again when the boys are older. I'm not going to be miserable now (because I would be if I was working just for retirement). I have found that when money is involved, we always seem to have it when we need it, somehow. I believe the future will take care of itself. I feel I would be missing out on my children's lives while they are little if I worked now, especially if I worked just for retirement. You have to ask yourself if you would rather be home now with your children, or home later, when you are "retired" and your children are grown. For me, it's an easy choice.

[wildmonkeys]

In large part through luck. Earlier in my parenting career we couldn't afford for me to sah and when I first started it was tighter, but as my dh has advanced at work we have gotten a little more comfortable.

We have experienced a decent drop in taxes by going to one income and still putting the max into dhs retirement (15,000 a year) I still do a bit of freelance pt work which allows me to put away 4,000 per year in an IRA...it is less that what I would put away if working ft, but a pretty good bit considering I get to enjoy "retirement" right now. DH has just gotten a raise and we are going to direct deposit the entire amount into the boy's 529s (we figure we won't miss "new money") We don't have any credit card debt or any debt outside of our mortgage including a car payment. We never buy more car than we can pay cash for.

We have grocery bills & heating habits very much like yours, but live in a fairly urban area. We got into the housing market awhile ago so we have pretty inexpensive housing for this area (along with a bump in salary due to locality pay) without some of the expenses of rural areas (more driving, some services are more expensive, etc.)

We don't do cable or cell phones. Eating out and buying anything new are rare treats and we try to do lots of free activities (playgrounds, museums, movies from the library, etc.) My husband and older son ALWAYS pack a lunch. Many of our big ticket items (computer, tv, stereo) were really old versions of what is out there right now that people gave us when they upgraded. We do the kids parties birthday parties at home. We basically pay the mortgage, insurance, retirement, bills first and them make whatever money is left stretch to cover groceries and other spending. For us though...the bottom line is that dh makes enough money for our expenses.

If it is something you want to do...think about scaling back on retirement contributions for awhile (we did for the first year I was home) and building up an emergency cushion before you quit so you won't have to fall back onto credit cards if some unexpected financial need arises.

Hangout on this board --- this is a thrifty bunch of parents!

BJ
Barney & Ben

[Eman'smom]

I'm a SAHM now, but I haven't always been, dh makes a very good living but things are still really tight.


We heavily contribute to his retirement, but nothing to mine right now, it exists and it growing through intrest just nothing new.


It's easy to say cut cable go vegetarian but in all honesty it's not that simple. As you are discovering there is only so much you can cut. I figure you've factored in the reduction in childcare, there are also small things like I only have one wardrobe (as opposed to a work and home). But again, that isn't 800 dollars a month worth

[Bartock]

Here's our low down. If I went back to work full time (I currently work 1 night a week) I would bring home $100 per month, daycare for the baby would be $35 per day and after school care for DS would $18 per day. So pay both day cares and I'm left with $100 per month not worth it, no way I will work to pay someone else to raise our kids. Working 1 night per week with DH at home I make about $90 every 2 weeks, i suggested to DH for myself to work more nights and on his days off, so we could have more money to pay the bills, and he said no, you a mom you should not be working.(he's not all like you cook and clean either) : And yes things are a tad tight sometimes, but we would rather have that then one of us not here to raise the kids.

[D&S Mom]

I have stayed at home since my first was born. Basically, we can afford it because we only have one vehicle (now paid off), no credit card debt, and rent a house ($850 per month) instead of having a mortgage. Housing is pretty expensive where I live (Vancouver Island) so that's the trade off now. WIth the cost of childcare, needing another vehicle for work, dress clothes, lunches out, etc. we figure it's better for me to stay home.

[alegna]

We do have credit card debt. DH puts *some* in retirement, but only enough to get the matching funds at work. We don't have any savings.

Sure, I'd love more $$, but it's not worth having to work and put dd in daycare.

-Angela

[Llyra]

I'll be honest with you-- the only way we manage is by not saving. Well, DH has his pension deducted, but that's mandatory, we don't choose that. Otherwise, we just can't save. DH is in grad school right now, and when he finishes we're looking at a pretty substantial rise in income, and that extra money will be saved, but until then we've had to put retirement planning on hold. It's really scary, actually.

Besides, I'm shortly going to have three kids under 3. The daycare costs alone would eat up more money than I could possibly make, so that would defeat the purpose of me working anyway.

[Benji'sMom]

We have always saved for retirement, but we were never zealous about it. When DH worked and I stayed home, some of his paycheck went into a pension plan for state employees. Now that I work and he stays home, my employer contributes to my IRA, I don't spend any of my own money on it. We don't have any credit card debt and our cars are paid for.

[BetsyS]

We put some money into retirement, but not enough.

We are out of credit card debt (just this month!!), but we are still paying on 3 student loans (totalling $90,000) and a car, plus our mortgage. Once the student loans get paid off (we're on a snowball payment plan, and our payment equals $1800/month), we'll put more away for retirement.

For us, it makes much more financial sense for me to keep working, but my heart doesn't agree.

[nonconformnmom]

When I had my first child at age 23, I could not afford to have one of us stay at home.

When I had my second two children, I was 38 and 40 years old. My career is very established and I make a lot more money than I made when I was 23. I realize, of course, that delaying childbearing is not the answer for everyone, it's not even something I chose intentionally. But to answer the question, "How did you do it?" that is my answer. I couldn't have done it earlier in life.

[jkpmomtoboys]

I agree with the delayed childbearing. We had our first at 29, which is early in the Bay Area, but it allowed us to get our degrees and begin our careers. Dh makes quite a bit of $$, so we are able to save for retirement, college, travel a little bit and right now we're doing a major remodel/addition on our house. But would we have been able to do that if we had our kids in our early 20's? No way...

[zinemama]

Not everyone can make it work, and it sounds like your family is one of them. You're not living an extravagant lifestyle, you are very conscious of your budget, and as you say, you are doing everything right. Except that neither of you makes enough for one of you to stay home. I don't think you should beat yourself up over this, but recognize that at this point, with the jobs you have, it just isn't possible - as it isn't for many, many people.

It works for us due to a whole laundry list of things:

-luck of being born into middle class families who sent us to college

-luck of landing good jobs after college, enabling us to pay off college debt

-frugal habits which enabled us to (independently) save for down
payments on a house before we met; so that when we met, we were able to combine savings

- luck of getting into the housing market here when we did, and finding a house with a mortgage we could afford to pay on one income

-luck of dh landing a good job with good benefits (including pension), enabling us to save for the kids college and our retirement while I sah.

Now, we only have one car, dh is a bike commuter, we pack lunches, don't go out a lot, have cellphones or a tv. I buy all my clothes except shoes at resale shops, cook everything from scratch and we have no credit card debt.

But frankly, none of that would make much of a difference if dh didn't have the job he does with the insurance he does, and we hadn't lucked out in all those ways earlier on in life.

Luck, location and frugality. And looking at how we "make it work," it's luck that plays the biggest role.

[mothragirl]

i wouldn't make enough money at a job to justify the expense of childcare, i might even lose money.
we rent, don't have credit cards, and don't have savings.

[sallyg6]

Originally Posted by Samjm

I’d love some honest feedback from those of you who stay at home with your children on how you manage to afford it.

Right now, both DH and I work.

We have an extremely low grocery budget – around $40 a week. We have 1 car paid off, and very low payments on the second car. We seldom eat out (maybe twice a month). We live out in a semi-rural area, because housing is cheaper out there. Our mortgage is on the low end for this area. We are very frugal with regards to heating etc. We have our house set at 60 in winter. Yes, it’s chilly, but that’s what sweaters are for. We don’t go out to movies or any other clubs or entertainment. We have $0 in credit card debt.

We do have cell phones, Netflix and Dish Network, which we could drop if needed – saving a total of $100 a month. (It’s not enough to warrant dropping at the moment since we do both work).

We seem to be doing everything right, and yet there is just NO WAY we can afford for me to stay at home.

So how do you do it? The only thing I can possibly figure out is that families with one stay at home parent are not contributing to retirements savings at the level we are.

If we work out the potential savings for me to stay home, we still fall about $800 short a month. And this is for our normal lifestyle. We are not extravagent at all.

So, for those who stay home – do you have savings for retirement? Do you have a lot of credit card debt? I’m not saying that this is the only way to do it, but I don’t see other choices. If they’re out there, I’d love some enlightenment!

We do save for retirement (15% of DH's before tax) and we also max out IRAs for both of us and put a little away for the kid's college. We have no credit card debt but do have one car (will be paid off in 4 months) and a mortgage (I don't know how this compares to others in our area but it is less than 20% of our income). We also save a little bit towards our EF (most of our extra money is going towards getting rid of that car payment).

That's how we save, but honestly, I am able to SAH because we live in an area with low cost of living and DH makes enough money to support us. We're not really frugal (I come to this board for inspiration) but we're not spendthrifts either.

Sara

[Maddy123]

I left a full time job and have been at home a couple years, but I am concerned about our future savings and college funds for the kids, etc. We have 2 cars, both paid for, and very little debt. We do take a large retirement deduction from DH's paycheck that is matched by his company. I have a retirement nest egg from my years of working that we haven't touched. However, we are not saving much of anything these days and it does concern me. Our mortgage is around 20% of our income, which is fairly low compared to many areas of the country.

We have several friends who spend tons of money, remodeling their kitchens, bathrooms, buying new furniture, etc. I do wonder how they can afford it. Even while I was working, it seemed like things like that would be difficult for us to do. Now it seems pretty impossible, unless DH moves to the next level in his job. And it doesn't look like he will anytime soon, given the personnel situation at his job. We could move and he could make more, but we like where we are very much.

It took me about 2 years to save up enough $$ to leave my job. I had a long commute, etc. and it was hard on me. I would say it has worked out, but money is very tight and I am considering my options. I really wanted to be home and am glad I made the move. Still, we are not as financially secure as I would like to be. It's funny you posted this, because I have wondered how others seem to be doing so much better financially than we are.

[frog]

About 28% of my gross income goes to housing costs. We don't have anything for savings right now on a regular basis, we have a little bit of credit card debt. We cut corners whereever possible, I pick up freelance work when I can, and turtle's started a SAH business.

[GooeyRN]

I wont be SAH much longer. We managed so far for a year. DH only contributes 2% of his salary to retirement. We have nothing going into savings. We do have a savings account, but one major home or car repair will wipe it out. What if there are two major repair's needed?

Im sick of living on Ramen noodles. We do not waste any money on entertainment. We do not have cable or long distance telephone service. We do not receive the newspaper. Our only luxury is the internet, and getting rid of that really won't help much. We already save water by not flushing unless its brown. We take 5 minute showers. There really isn't anywhere left to trim. I don't turn lights on unless I can't see to get through the house, and I turn them off as soon as possible.

We are 30ish, and really need to start worrying about retirement and dd's college tuition. Its not like I want to live an extravagant lifestyle. I just want healthy food and a decent savings account for the unknown future expenses.

I guess I am not a good one to ask. Its just not working for us no matter how much we cut back. I am going to have to start working weekends.

[prairiechild]

I stayed at home until our son was 2.5 years old. I thought it would be easier financially than what it was. The only way I could stay at home as long as I did was that...

Our only debt was our mortgage.

We followed a very strict budget. (Only $50 a month allotted for our DS for clothes, diapers, toys etc.) (Only $25 a month each for clothes for DH and I)

We were not able to save.

Did not use any credit cards.

We hardly ever ate out.

I shopped on ebay and at thrift stores.

We had saved up 6 months of living expenses to give us a financial cushion.

One of the things I did while staying home was go back to school. I was a LPN and found an LPN to RN program that had class one evening a week and clinicals one day a week. That was an extra expense but we looked at it as an investment in the future.

Finances were very tight. DH is self-employed which made it more stressful in a way. Fortunately we had the six months of savings to help out when work was slow.

I am back at work now and working 4 days a week. DS is in daycare 3 days a week.

We are living on my income right now and saving as much as possible. We are planning to pay off our house in several months and then hope to get pregnant again. I'm planning to work about a shift a week after the baby is born.

Our neighborhood is not that great but it is OK. I do not want a house payment while I'm staying home. That will make it a lot easier than last time. Plus we'll have a little bit of income from me and no tuition bills. I'm hoping that staying home will not be as big a financial stress this time. It was rough for DH because he had all the financial load and rough for me because I felt like we didn't have the money to go the zoo or eat out when I needed a break. I'm so glad I did stay home, it was worth it to be with our son and it paid off in that I can work less hours and make more money.

Prairiechild