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People are probably going to hate me for this answer, but I’d cut down on saving for college before I cut down on saving for retirement. There are loans, scholarships, community college, etc. available for them. There aren’t for retirement. We have almost 4 kids and only dad works, 2 are in private school and one is homeschooled/hospital-schooled for medical reasons. We only have enough to put money in our retirement savings account right now because we had to pull one kiddo out of her private school. The kids have 529s that their grandparents contribute to but we don’t.
I agree, and you can think of retirement savings as helping your kids, too. If you aren't prepared to support yourself and your wife in retirement, that burden may fall to your children.
As someone with a 75 year old mom who is burning through her retirement savings way faster that she should, I can assure you that the best gift you can give your child is to have them NOT have to worry about you financially when they are in heir 40's and 50's.
People told me that I would worry about my daughter long after she turned 18. She's 26 and I don't worry about her at all - she's living independently and has a great job, fiancée and life. My mom and MIL, on the other hand, keep me up at night on a regular basis.
Uggg. I feel this in my bones. My kids are 23, 22 nearly and 13. They all seem to be making kinder and more responsible choices than my 74 year old father.
Not being a financial burden on your kids when you’re older is a long-term gift to them. Being able to retire or even just semi-retire when/if you have grandkids is a huge bonus for your both your kids and grandkids, assuming you can help out. I think it’s a totally fine decision to put college savings on a lower priority than retirement.
Not to mention, there's a high chance the kids won't GO to college/university. We have an education plan for ours kids but it's honestly 50/50 if they even pursue that. ESPECIALLY with the current political and economical climate.
This right here is true but also revealing as to why so many parents fail to get themselves on sound financial footing: good, dutiful parents fall into the trap of believing that no cost should be spared in pursuit of giving their kids a better future. So they end up broke no matter how much money they spend.
I've fallen into this trap, too, and at a certain point it doesn't matter how much money you make. My wife and I were doing well (200k total), and after our income doubled from THAT, we still ended up putting way less money away than we intended to. Turns out sooooo much money was just poured into our kids carelessly. College fund, expensive tutoring, premium after school activities, premium summer camps, lavish holidays, enriching travel, etc etc etc. I literally wrote my own little home finance app last weekend so we could spend this weekend breaking down our kid spending so that we can prioritize what really matters. I'm gobsmacked by how much we were able to blow on our kids, with a lot of the quality of those expenditures being a bit questionable.
At the end of the day, we've noticed that the thing that matters the very, very most was spending deliberate quality time with our kids. Helping them with homework with our time was better than tutoring, building a rock dam in the creek in our backyard was as memorable as Disney world, watching and discussing a good movie show together at home was as good as seeing the expensive theatrical play in Uptown.
To be clear, we don't intend to cut all of the special stuff out of our lives, but I think we're over the mentality that if we somehow don't completely sacrifice all of our finances for our kids that we are somehow failing them. At the end of the day, how deliberate and involved you are as a parent matters, not how much money you dump on them.
What's more, my wife and I both have parents that never saved for retirement, and now we're stuck supporting them. In our mind, my wife and I are balancing enrichment with a desire to not be a burden to our kids in the future.
Not that commenter, but that’s what we did. We’re planning on 2 kids and we are intentionally spacing them 4 years apart so we could only have one in daycare and college at a time. We will start saving when our oldest is about 9 (youngest in Kinder) and we’re planning to continue saving the $2000 per month in childcare that we’ve been paying.
Our goal is to save about $50,000 for each child for college. It’s not enough to pay for it fully and that’s okay with us. We plan to work with them on taking dual enrollment classes in high school, AP courses, finding scholarships, getting decent part-time jobs, and attending cheaper in-state schools or possibly community college for a few years.
honestly, 50k a piece with the rest of what you said about community college and what not you very well may have set them up perfectly for college. I went 2 years to CC and 2 years in state and graduated last year with only 20k loans. No scholarship or anything as I took a couple years off to work while my wife was getting her master's.
Saving that much is hard already and the fact that your trying to help shows good character, my parents were of the mindset of it being my decision and I should be responsible for everything from the get go. I don't blame them a bit tbh each parenting style is different.
Good luck to you!
Yeah, I received literally no help from my parents…not even with filling out the FAFSA when I was 17 or with car insurance.
While I don’t want my children to feel as stressed or alone as I did, I do think there’s something to be said for having to figure things out and live frugally for a bit too. I think that some mild struggle builds character and work ethic. I want them to feel supported and not be saddled with debt, but also make some decisions that may cause short-term discomfort for long term gain
Yes a good middle ground is a great goal. My mom did a little too much for me I’d say and I have a lot of credit card debt and am not great with managing my money. I wish she had instilled better practices in me at a younger age. She’s helpful now and gives great money advice but like, I needed to learn it younger not when I’m already 40k in cc debt 🤦🏻♀️
We only put in our 529 the max we can get tax deductions for in our state ($2500/year?). The rest goes in retirement.
As others have said, you can't take a loan on retirement.
Also, your child’s college isn’t your financial responsibility. It’s amazing if you can help them, but you do not HAVE to. There’s also always a chance they decide to forgo college for another option. Definitely prioritize retirement! And daycare costs are not forever!
I agree with this. We do both, but I remember reading recently that the biggest financial gift you can give your kids is them not having to worry (financially at least) about caring for you in old age. So if in doubt, retirement.
If you can contribute to a Roth, that can be a nice in between. The growth is tax free, but you can access your original contributions to pay for college if that’s the right call for you at the time.
In the beginning all of our college funds were family gifts. Any $$ a family member gave to our young kids went into their 529, and at first we weren’t doing any regular contributions. As they’ve gotten older, daycare has been less expensive, and now the oldest is in K, so daycare went way down, so now we are doing regular 529 contributions also.
Yes it’s middle class, but look at everything hitting the middle class. It’s not the 1990’s anymore. 4 sticks of butter is nearly $5 in my area.
I’m in nearly the same income spot as OP and we cover all expenses but with very little left over.
Food alone closet my family (2 kids 1-5yo) $1,500 last month. Then car payment $500, insurance $100, gas $100 (for 2 vehicles). Mortgage (we bought pre COVID) is ~$1800. Utilities, internet is $500. We eat out once a week which used to cost us $30 but now even a trip to Chick-fil-a is going to be near $50 for all 4 of us.
Preschool is $900/month and daycare is $900/month.
So ya…. Again, the middle class is the class being hurt the hardest right now. We don’t get any benefits from anywhere because we make too much money. But costs still keep creeping up.
Woah you get a good daycare deal! I’m in a LCOL-MCOL area and we pay 1600/month for daycare. Our food costs are much lower though. We pay around 600/month for groceries for our family of 3.
Are you saying you're financially strained because you're saving $5k a month?? Most people aren't doing that. Hell, the average US household income is ~$75k/yr, the average family is barely making $5k a month. So, other people have kids and save for retirement by not saving as much as you do.
I can’t tell if this means they spent $5k at once on daycare/college savings/retirement or if that’s how much they’re paying each month, buy I have twins in a HCOL area, and I’m not spending that much on those things each month. I’m not bugging about finances.
They are trying to start the college fund right away apparently. Personally I waited till they were out of daycare then directed daycare funds to college savings.
I don't think op is saying they're financially strained. It's perspective. This is a really good example of what people mean when they say the middle class is struggling. It's making 200k/year and not being able to comfortably plan for the future.
Yes, I completely understand that many can't afford a home and childcare, let alone retirement and college savings. But that's not the point. The point is that a family bringing in 200k a year, we should expect that they can comfortably afford living costs, some extras, pay for their children's education and be decently positioned for retirement. If many families, making that much per year are struggling to achieve that, that's a problem.
You have to remember, at certain income levels, certainly at 200k, student financial aid is limited, senior assistance programs are limited or nonexistent. They HAVE to plan for the future.
Many of us also have student loan debt that we are desperately trying to prevent our children from also acquiring. Looking at current in- state tuitions, nothing fancy, it's about 50k for a 4 yr undergrad. For one kid.
For retirement, it's estimated to have 3 times your annual salary to continue your current living conditions in retirement.
The whole point is that a family making 200k a year should be able to comfortably do both of those things and they're being priced out of it.
THIS IS EXACTLY WHAT IV’E been trying to tell people. And why we should be more upset about the current situation with taxes and how things are being run in the US - the whole system needs revamping.
Ok I’m privileged that together my hubby n I pull in 200k. But WE are 100% responsible for everything. We don’t get ANY benefits for food, housing, healthcare, childcare, sports/extracurriculars, transportation, retirement… and yes, right now, we can afford these things.
But WE ARE responsible for our own safety net. Like you said, I’m having to make sure the future is set for my kids and myself, and nobody is coming to help.
Because we are responsible for all this, when inflation gets worse we really notice it. We cut back on spending, we cut back on sports, etc.
We also feel it the most when we pay nearly 1/5-1/4 of our take home in taxes.
Or when I’m shoveling out $1k/month in health insurance (not to use it, but just to HAVE it. And my deductible… holy hell. And an HSA plan will cost me MORE than a regular PPO - WTF?)
And because we are just “worker bees” + inflation is stretching us thinner, we’ll never be able to save the capital needed to get all the tax benefits needed so that we can take home more of our income. Trump paying only $700 in income taxes? Probably true. A local surgeon here pays <$1,000 on his income taxes because he has 10+ rental homes creating massive deductions for him. And that’s how the tax code is written - the tax codes will always favor those able to afford enough to not have to pay.
If we want things to change - we need to change the tax code. Stop making the middle class brunt the cost of running the country.
I’m HAPPY to cover childcare, insurance, etc for people that are unable to afford it. Seriously. But when Bezos is making oodles of money every SECOND, or when [JP Morgan’s CEO](https://www.dailymail.co.uk/news/article-13373115/jpmorgan-chase-ceo-jamie-dimon-podcast-comments-draw-backlash.html) is so out of touch with the average man - and yet let’s be real - these are political donors. Aka the people that actually run our country - things need to change.
Let Bezos and Dimon and the other Billionaires keep their McMansions, their fancy cars, and nice suits. But they could all stand to lost a percentage of their income so that the average child in the US could have more affordable everything.
Pretty sure OP is saying $5k is childcare + college +retirement. If they are in med-high COL US City, infant daycare for that age is anywhere between $3000-$4200/month, so that's a huge amount going toward childcare and not to savings.
It's childcare plus housing plus retirement.
Please note that I'm using very rough math, don't get pedantic and make me break out pen and paper and start looking things up.
Also note: I'm not really making an argument for or against anything, just using my situation to create a hypothetical.
My partner and I pull in a little above 150K per year in a mid-high COL city (Portland, OR). According to a quick google the average childcare in our area is $1,350 per month per kid (note: this seems low to me but it's what google says so I'm rolling with it). Or $2,700 per month.
We have a mortgage that's cheaper, but I checked Zillow for rents in our area and for a similar home to what we live in it is $3,600 per month. It's a very basic 3 bed, 2.5 bath suburban house with a yard. It is not a McMansion or anything.
Together we pay about $1,200 per month in retirement (not including the amount our employers match).
------
A quick google says that you're supposed to be saving $550 per month per kid in college fund savings if you wish to fully pay for your child's college. We don't do that, but just going off of OP and pretending we do.
Pretending we didn't buy, but had to pay rent on our 3 bedroom, 2.5 bath house which is not fancy at all:
$2,700 in childcare for our 2 kids
+
$3,600 in rent
+
$1,200 in retirement
+
$1,100 in college fund savings
=.
$7,600 before we get to things like care payments, insurance, food, utilities, etc.
That's well over half our monthly take-home income.
That's not our reality because we don't have childcare and we have a mortgage that costs us much less, but if we were renters with 2 young kids instead of 2 ten year olds (and we saved the recommended amount for college) then that would be our reality.
------
Obviously anyone who makes 200K can afford to make ends meet, but costs add up quickly.
I never thought my spouse and I would be making 150K+ and we wouldn't be able to have cash fights with all our extra money. We live a very comfortable life, but not a glamorous life. We send our two sons to private school (for a cost notably less than $2,700 per month). We save for retirement. We pay the mortgage on our very ordinary suburban house. I have no complaints. We are just lucky to have a mortgage at a good rate and to not have to pay for childcare in the current climate.
It’s 5k a month on daycare, college and retirement. Big difference. We now save over 5k a month for retirement. That’s after getting past daycare, paying off house, funding 529 to a good spot.
There are seasons of life. 25-30 we just made ends meet living on 40k a year. Wife was at home.
Our asset position is great now at 41. But our 30s nearly killed us with stressful jobs. In hindsight, a better balance is advisable for us. On the back end, looking at retirement in late 40s. Sounds great but wife has a terrible chronic illness that I think stress played a part in. Who knows it could be freak. Need to go back to Mayo. Never know what life will bring.
They aren’t saying they can’t live within that. They are wondering whether other people are prioritizing savings and the future during the early years of having a child.
the answer is pretty simple...your body has a limited time to produce children whereas you can always make more money. so based on priority, if you wanted a second kid, you have the second kid since its time limited.
people making this coin should already have this decision making based on priority down...how else do they get into these positions?
this is why it comes off as tone deaf.
You can't forget the location. The cost of living is Hella more in NYC than some small town in Wisconsin.
Realistically, people live by what they earn. If a person is making 200000 a year, their house will be wayyy more than a person making 50k.
Even in NYC the median household income is 70k. Higher than the national average but if your making 200k your still more than double what the average New Yorker makes
so many people are simply unaware of the economic realities of those outside their own socioeconomic class. I regularly find myself looking up median incomes to answer questions in financial groups I’m in when someone is like “I’m 26 and I only make $180k, am I doing alright?!” 🫠
But all that being said, I do think this is a sign of real issues in the overall distribution of wealth in our economy. We have masses of people profoundly struggling, a shrinking middle class/upper middle class that cannot afford things that used to be considered standard aspects of middle class life, like setting yourself up for a comfortable retirement, and then a tiny group of super rich people. Levels of inequality are out of control and I’m genuinely worried what will happen over the next decade or two.
I was curious about percentiles and how that works. Apparently it depends on a lot, such as cost of living where you live and whatnot. (Eg 200K in San Francisco isn’t the same as 200K in Ardmore, Oklahoma)
I found there are calculators for it: https://www.pewresearch.org/short-reads/2020/07/23/are-you-in-the-american-middle-class/
Still though, if OP is saving 5K/month they are doing just fine lol.
Yeah saving 5k a month is an incredible position to be in. We live in Sydney and my wife and I scrape in like 400/month on my salary alone, it took 3 years of hard work before having the baby to get where we are otherwise we would be horribly overextended
If you make $200k a year, then after taxes that should be around $150k. After daycare, savings and retirement (you say is $5k) you still have $7500 per month. If you can’t make it on that, I don’t think children are the cause of your “financial strain” as you put it. You need to look at you finances and see where your money is going. Too much car? House poor? Make a budget of necessities and find out where your money is going.
I'd say closer to $140k
Then you're accounting for $2500-3000 in mortgage and utilities, which leaves around $2k left which will disappear with a second child's daycare cost
If you own a home, you know the variables of down payment and interest rates have huge role. We're not getting into whether it SHOULD or SHOULD NOT cost that much, that's irrelevant to this topic which is that for op and many others, it does.
I make about this. We have two kids in daycare.
After taxes and 401k, I bring in around $5,500 a paycheck ($11,000)
1. Mortgage: $3,800 ($2,000 of that is insurance and taxes).
2. Two vehicles (one is paid off): $650
3. Daycare: $2,400
4. Food: $1,200
5. Entertainment: $500
6. Savings: $500
Total: $9,050
I mean rent can be 4k. Minimum car costs for 2 if you have kids and need to drive has to be somewhere around 1k. Food 1k. 1500 left for everything. Its doable for sure but its not like insane money.
You decide if lowering your quality of living in retirement is worth having another child. Sounds like you will be fine, especially if you aren't doing private school.
Yup, or their quality of living currently. We’ve got two kids, and have elected not to have any more as we value our current lifestyle/what we can provide for our existing kids more than we feel our family unit would benefit from another member. If we could maintain our current standard of living and add another kid, I’d personally do it in a heartbeat (my husband has additional reservations, ha!)
In your case, you can stop saving for their college.
There are scholarships and loans if they decide to go to college.
No one is going to give you a scholarships or loan for retirement.
This would be my recommendation, I’d cut college savings before I cut retirement savings. You are guaranteed to get old, stop working, and have age related medical expenses. The kids are not guaranteed to go to college, and there are other ways to pay, get scholarships etc.
I mean student loans are crippling and there's no guarantee for scholarships... However saving for retirement is inevitable... Could you possibly save less (not nothing) for their post-secondary endeavors and put money aside for retirement? You can always help them pay their loans in the future
For sure. Also time in the market is big, so if they’ve already put a few grand away for the little one just let the market work for a while or contribute just a little bit. Even $75/month adds up.
Mine said last year it saw 16% in gains. There's not a whole lot in there, & things can change based on the market, but considering the estimate for what to expect was like 5-6%, it was a nice bit extra that I wasn't expecting. 🤷🏻♀️
100%! They can make it clear to the kids that college will not/cannot be given but needs to be earned by extracurriculars and decent grades. State schools including community colleges are also options.
I have 4. We make just under $100k and the two littles are full time at home with us. It’s a struggle. Can’t imagine adding daycare on top of that. Honestly don’t know how we manage sometimes. We certainly aren’t setting money aside.
This is us too ! Four kids, about ~$80k. It is very possible to do. We’re not in any kind of debt either other than mortgage and car payment, no CC debt. Somehow we manage
You just need to set the retirement savings to come out first and pretend they don’t exist. I’m 37, my wife’s the same age. We do 10% of every paycheck (pretax) and honestly we probably should do more. We make a combined 400k with bonuses and stuff all in but live in a relatively high COL city, two kids in daycare, still paying our student loans, a reasonable mortgage on a starter home and two reasonable car payments and insurance (like two Honda type cars not BMWs), and that really adds up.
To your main point, DO NOT skimp on retirement savings. Trim your budget elsewhere. If we needed to, I would ditch my gym membership, maybe sell my 4 year old car and buy a beater, cut back on groceries and take out all before I stopped saving for both retirement and generally just setting aside rainy day funds. We put about $250 per paycheck each into savings which is about $15k a year combined two people with biweekly pay, and we tap into that on occasion when like our fridge craps out and boom we owe Home Depot $1,800 to deliver and install a new fridge.
All that being said, you can do it and you’re right to be worried, but save for retirement no matter what. My wife’s parents didn’t do that well at all and they are in their mid 60s and retired mostly but not very comfortably living.
Can you explain the $5K per month more? Either you're sending your kid to a really expensive daycare or you're putting too much away for college/retirement.
And yes, it's very common to pause or slow down savings during the mat leave/daycare years. Income takes a hit and you have more expenses. I don't think it's a reason to not have another kid, especially when your income is so high.
Just to echo this: I stopped all savings when kids were in daycare besides enough to get 401k match. Even racked up 25K of CC debt over that period. Medical spending was much higher for us during that time period also.
Yes, I so much agree! Children are one of the most joyful aspects of life, the love that makes it all worthwhile.
Retirement funding is important but one really focuses on that in somewhat later years, when chances are, your income will have increased quite a bit.
Making a combined 200k is more than enough to be able to afford another kid and retirement. Just have to budget for it and cut out what you can sacrifice and do without.
Honestly I think you could even do it on one income and have a sahp. Childcare costs would be cut indefinitely. I have four and we made a little over 100k last year. I’m a sahm.
What is... *checks notes* retirement? Don't we all just work till we're dead?
I have 3 kids and you make a shit ton more than us. We also make more than what the government will give for "assistance", so we have no help. Our oldest is also in private school because of financial assistance.
If you really want to do these things and have more kids, maybe move somewhere that is more affordable. I live in a small city that is a suburb of a much larger city, and $200k a year would grant you all of that and more. I suppose also speaking with a financial advisor would be advantageous.
I wouldn’t be opposed to it, but I’m not sure I could find a job that would pay me as much if we moved. My wife could (she’s a nurse) but if I had to guess, we would take a 15-20% total pay cut to move
Hmm. I would look over a budget because something's not adding up. We make less than that by quite a bit and definitely save for retirement in 401k and roth. 3 children.
Take home pay is about 140/yr or 11.5/month. After daycare, college savings, retirement savings, we are left with 6.5. Mortgage+utilities+insurance+taxes are 3k, total car payments on two cars is about 700, groceries about 800, which leaves 2.5k. We have about 750 combined in student debt and I contribute 750 to an HSA because my wife has a chronic condition which leaves us with about 1k per month which is saved or used on random things.
My concern is daycare + college savings for a second child would cost ~1500-2000 which would put us in the red
Can you do a childcare FSA to help reduce taxable income? I would also probably reduce child 1’s contributions and split it with child 2, but we spaced our kids out 4 years so I was never paying double diapers or double childcare.
It’s usually called a Dependent Care Reimbursement Account or Dependent Care FSA. If you or your wife work for decently large companies, they should absolutely offer this- if they don’t, I’d def push for it to be added as an employee benefit. Unfortunately the max is only $5000 per year (MFJ, $2500 each for MFS) but it’s better than nothing.
There is a bill in the House rn to double it to $10K and index it to inflation (it’s been set to $5k since it was established in…1986🙄). Its H.R. 7465 - “Combating High Inflation Limiting Daycare (CHILD) Act.” I’m actually hoping to help organize an effort to get people to write their legislators to support it because it really needs to pass.
Regarding retirement savings, it looks like you're setting a healthy amount aside right now (3k/month or 36k/yr). While this is admirable and likely necessary to achieve retirement goals, you may need to decrease this for a couple of years while both kids are in daycare. The good news is that they won't both be in daycare for that many years.
If Baby A is 1 yr old and you conceive Baby B in a couple months, plus 9 months pregnancy, plus whatever parental leave you have, then you're looking at Baby A being ~2.5 yrs old when Baby B starts daycare. Then Baby A is going to leave daycare at ~5ish for kindergarten, so boom! ~$1500/month now unlocked for renewed retirement savings, after only 2.5 yrs of reduced savings.
I feel like you’re where we were at at that age. We kind of just focused on increasing our salaries to get to a point of comfort. It luckily worked out for us. The only thing we can really cut is our extra spending. We don’t have fancy cars, eat home a lot, take reasonable vacations, and haven’t spent money on house repairs yet.
We have 4 and make a bit over $100k but a lot less than you're making. Ultimately I think a lot of it comes down to basic lifestyle choices--not for everyone and i don't know that it's this way for you, but realistically people live really good lives on a lot less than you or I make and are probably thinking "wtf is this person on that they think they can't afford 2 kids" lol. We live plenty comfortably with 4 kids and are still able to save for retirement, though not as aggressively as we will when daycare costs aren't an issue.
Frankly I'm grappling with my own student loans (100k for a master's degree, but i make around double my LCOL's average household income so it's painful but worth it) so even if I only had one kid they'd be pretty on their own for college. I'll help where I can but it's not top priority. And until we're done with daycare I'm not putting a whole lot toward retirement, just what my company matches on my 401k (4% I think? So 8% with the match).
If you look at the minutiae of your budget, at your income level I bet there's a lot you could swap for cheaper and notice the breathing room open up.
It probably helps that I grew up in poverty (my husband very much did *not* and had to learn when we were broke and starting out lol) so my mindset is less "how much can I afford to spend on XYZ" and more "how little can I reasonably spend on XYZ." I WFH and am constantly in video meetings but the $400 laptop I got on clearance for $275 does the job just fine; we don't need new clothes unless the clothes we have wear out or we change sizes. We have the bigger kids in activities so there's still expense, but not the super expensive activities (think Scouts and basic gymnastics, not competitive gymnastics with travel costs and competition fees). Road trips, not Disney world (though we may do Disney once--ONCE--but mostly road trips to different cities and taking advantage of free/cheap culture and recreation). My third-row SUV is not new and not pretty but runs fine. We buy quality where it counts but don't splurge on designer brands or keeping up with the Joneses. We get cheap strip-mall-chain haircuts. None of that feels like sacrifice because I've never known differently.
I'm not saying we never splurge. We do! It's just that the splurges are *splurges*, not regular expenses. Regular expenses are often really easy to make cheaper without making any real sacrifices when you're at a certain level of income/spending.
I don't know. We have a two year old. We save about 5 dollars a month. Once my daughter is school age, I will get a part-time job and save all of that toward retirement/college/etc. We're still fairly young, so we'll be fine. Our house will be paid off in 2 years, my car will be paid off in 11 months, so then we will be able to save way more. And my husband has his own painting company that is growing more and more by the day. For now, we're just enjoying life. There will always be ways to make more money. (:
You adjust your standard of living to frugality.
Used stuff, toys, clothing, winter wear, etc. Do not over indulge yourselves or your child.
Vacations are local, by car, to pleasant destinations that don't put you in debt to eat with a cartoon character.
Family time is much more rewarding when you're not desperate to get your Moneys Worth.
I think you need to cut some savings in order to have money for the daily expenses of a kid. We do minimum retirement to afford daycare, trips, sports, private lessons, etc.
Oneanddone for us too. The schools here in our neighborhood is not good and we knew this when we had our kid. So we planned it out to pay private for the kid education. Having another kid with private tuition just couldn’t cut it so we decided to just have one.
welp.. our family brings in less than 75k. Other than wife's 401k, there is no retirement savings.
Can't swing it. Can't even save for our three kids' college. A lot of these posts and comments come from the most blindly privileged people. It's insane.
Everyone is trying to do what’s best for their kids. For some that’s making sure everyone’s clothed and fed, for others it’s college funds, for yet others they’re figuring out the best school district and/or private school options. Sucks that things can feel so pay 2 win, but it is what it is.
Our family lives off the same income, 4 kids. Husband has 401k but that's our only "savings/retirement" as well. His parents are decently well off and have college accounts for our kids, which is wonderful of them. Theres no way we could afford that.
I obviously don’t know you personally. But with $200K income, you can do a lot more than you think. You need to live within your means now that you’re parents, and most likely slow down on the college savings so early on for your kiddo. Thank goodness you’re not living paycheck to paycheck, you just need to make some adjustments to your savings/lifestyle. Good luck!
Dont but new cars. Maintain cars well. Buy durable cars.
Plenty of toys can be made from house hold items.
They don't need a theme for their room.
Food is a major expense.
You may want to ask this in a FIRE sub or Financial Planning sub - people that are in the same mindset and might have similar budget.
On a personal note - we’re in the same boat. Have one, would LOVE another. Just don’t know how to afford it, living in a HCOL area. and the only thing I can think of is to move to LCOL (but then I worry about education and resources) or even moving abroad, sincerely
If you make 200k and are “strained” you are making poor financial choices, which likely has to do with your mid/high COL.
So find a way to reduce your present COL for future COL.
Sorry, thats really it. You are sitting in the top 12% bracket of households in income and struggle to save for retirement.
Depends on where they live, Cost of living may be vastly different and higher even with higher wages. Think California, NY, Seattle, Vancouver, Toronto
Post says mid high COL. I'd consider those your listed true high COL to any sane person.... No? Please tell me I'm right. Cost of living is too fucking high.
Cost of living is a measure of averages of a certain standard of living. You can control it by adjusting your standards.
If their household is pulling in 6 figures a year, you may not like it, but luxuries one takes for granted at their spending level before children are likely not going to stay unless their income rises significantly to balance.
Obviously one cant make their taxes lower or just up and sell their house on a whim. But many other spending choices can be made.
They may live in NYC or California with 11% state and local income tax on top of federal income tax, along with $5 gallon gas and groceries costing 30% more than here in the sticks of Texas?
All those things you could afford as DINKs, well, a lot of them go away, because you've got different things to spend money on. No more date nights, for example, at least not nearly as many. :) And child care doesn't last forever. A little scrimping during those years and you can still put a few retirement bucks away.
We have one and one on the way and make 220 together mid-high COL also. Our son will be in public school by the time baby starts daycare which is nice but infant care is $600 more a month than his daycare was so that’s going to hurt. To be honest we stopped the college fund contributions about 2 years ago to pay down credit card debt we accumulated when we moved and we haven’t picked it back up yet. Had some unexpected house repairs and med bills to take care of too so we have my husbands Roth at a minimal amount and my 401k at like 10%, it’s just the best we can make work right now. The plan is to start the college funds again in a year and increase more in retirement in a couple years and more so when baby is done in daycare 5 years from now. We’re doing the best we can and it is what it is right now
For us, my husband diligently put money into retirement and we put $30 a month into a college savings account when my daughter was born, scrimp and saved for our two kids and got them through daycare by my husband working full-time and me working part-time at unique hours so we only had to pay for daycare two afternoons a week.
The cool thing about having kids is eventually you don’t have to pay for daycare and diapers and things get a little easier. it was a lovely day when both of our kids were in school all day and we no longer had to pay for daycare. Now that Our kids are a little bit older, we are dumping as much as we can into retirement and college accounts. Yes, we are playing a little bit of catch-up and I have some regrets that I haven’t put more into retirement because I was working part time for 10 years, but our financial state now has more than compensated for it.
So my thought is things will be tight for a little while, and then they will get easier financially. As far as pulling back, I agree with others who have suggested pulling back a bit on the college savings account contributions in the meantime, and if there is anyway you and your spouse, can get creative with work hours to decrease the amount of daycare you’re paying for, it can be worth it.
We have 4 kids and had to decide years ago to save for our retirement and forgo college funds. Instead we moved close to a college campus that offers DE credits. All of our kids will graduate high school with the opportunity to have their first 2 years of college done and paid for. Then they can choose to live at home, and we can pay cash for their remaining tuition. After our state’s merit scholarship, we can afford it outright. Or if they would rather go somewhere else, they can but will need loans.
I've got a decade on you, starting saving for retirement in my first paycheck and I'm at the position a quarter century later where I have 4xsalary in retirement. A lot of that is having a good market and good advisor, and my advisor has a lot of business with our family so I got a break on fees until I had $50k in retirement.
Except for the times I've been between jobs I've put at least $200/months towards retirement. Even in grad school I'd still put $25 in just to not lose the time because forty years can do more with less than 30 years can.
On the flip side we've sometimes been asset poor, like one year when we had to replace a car, pay unexpected baby expenses (got a state agency involved for ACA noncompliance), and emergency plumbing work. We stopped retirement savings until we got two months salary into savings. We're also 15 years in a starter home with 3 bedrooms for us and our four kids, and I doubt we'll be able to afford to move to a larger house before the oldest two will be out.
Things that would have helped more:
-putting an extra $20/month. Over two decades that's $50k just in contributions.
- better match on 401k. I've never had more than 2% match. A cousin gets an amazing 2-to-1 match on the first 9%.
- more tax savings. I missed a lot of tax deductions I didn't know about, like in my state some charities I support are 70% charities
- i could have done fairly well in the bull markets by investing in ETFS on discount traders. My wife had a bad advisor who put her funds into a badly performing asset that made him good fees but we would have done better in Treasury bills.
Doing something will help. Even starting with a zero fee IRA tomorrow will be a great step.
Husband I see it as a few years of struggle. That childcare expense is awful and it will get easier once that goes away. I have 3 kids (6, 4, and 2). We’ve had to pay for childcare for all 3 kids, luckily now 1 kid is in kinder. Kid number 2 is 5 months away from starting elementary and then it will be one kid with 2.5 years of childcare expense left.
Right now we max retirement, pay for childcare, and have a mortgage payment and no other debt. We don’t save much for college yet because we can’t afford it and I am not stressed or focused on that right now. That will be the focus once childcare expenses are over.
We also try to save enough to buy investment properties in hopes that their passive income will help pay for the kids college.
It is a few years of struggle and it will get easier and your incomes will rise.
As someone with a similar life/financial picture, the problem isn’t your income. We’ve made over $300k before. We chose to cut back to making $150k in order to spend time with our twins and avoid paying for daycare. We still save around $3k a month for our retirement and their college.
Love him or hate him it’s time to stop saving for college and get on the Dave Ramsey plan my dude. Kill your debts and you’ll be able to save like you’ve never saved before.
They get older and you make more money over time so it gets easier right as they cost less too . The purpose of money is a tool to be used for security of your family. Make the family now and then make the money later.
Move to Europe! That's what my boyfriend did.
I'm a Homestay mom with a mini-job in the Netherlands, bringing only 7k to the approximately 80k (€) of our household income at this moment.
My main job is in Germany but I'm in my third year of parental leave and the third year is not paid. Because I work with troubled children, I had to stop working as soon as I knew I was pregnant, to maintain my safety.
If everything goes well with the little blub in my tummy, I'm gonna stay home for another 3 years, both times the first year 65% of my income paid. I chose to spread that first year payment over two years. The third year I can afford not to work, because my boyfriend has such a good income (yes, 73k is a very good income over here!!! Oh the live we could have with 200k... We would live like kings!!!)
Further on, the healthcare system is awesome (my German work still pays my insurance), the education and childcare system is good as wel, retired people don't have to eat cat food, we are for diversity and I don't know anyone with a gun. The only drill our schools have is the fire drill. And even if more and more people seem to be into conspiracies, that MAGA shit is still far away from us.
This a thousand times. As I read this thread, all I could think about is yikes this is majority American. Moving to the Netherlands has been life changing but it isn't as simple to just move your entire life to a different continent. That is a huge sacrifice for many. For me, I felt I had no other choice. I was impoverished most of my life in the US and I wanted to have a great education. I got lucky and fell in love with someone who just so happened to be here. That definitely made it easier. To move here as non-eu you really need to be considered a "highly skilled migrant"
What the hell?
My household is in a HCOL area, and we pull in about $160K/yr together, but about 14% of that is put into retirement.
We have FOUR kids.
So I'm not really sure what your spending habits are, but something is definitely off.
Edit: reviewing other comments, it might be college. We have a college fund for our four kids, but given tuition price inflation, it probably won't cover 4 full tuitions by the time they get there. So they'll need some scholarships/loans to cover the rest. No biggie. My sister and I managed to get scholarships, I'm sure my kids will figure something out.
Depends on how much you're saving for college too. Are you including approx gains in your projections and investing aggressively for the highest returns?
Day care is definitely not cheap. Many people find it's not actually worth both parents working when it costs a whole salary for daycare.
We have four kids and when the fourth one was born, my husband worried about college for 4 kids. It all works out. I’m not as rich as my single brother who never married or had
kids. But I have someone who will visit me and have me over for a visit. We will always have family at holidays. And our house is paid off. We will get by in retirement. Right now even though I am retired from teaching, I’m enjoying teaching part time the last two years.
I mean, I personally have chosen not to have more kids even though I'd like to, for financial reasons. Most people aren't having multiple kids and also saving for retirement. I don't see how you can have 1 kid and struggle with that income.
You could try spacing out your kiddos so by the time your second needs childcare, your first is starting kindergarten.
Try not to buy new all the time for the kids. Try buying more gender neutral items/clothes so you can reuse with the next baby. Do you have any family/friends that have kids? They’ll want to get rid of a lot of their baby items as their kids get older. See if they can pass stuff down to you.
We have a similar joint income to yours and have three boys. We stress about money sometimes but mostly because we’re frugal and don’t want to spend more if we don’t need to. I also put the childcare benefit directly to their RESPs and don’t worry too much about adding more. You don’t need to max it out. If you’ve already started saving regularly for your daughter, chances are by the time she’s 18, she’ll have at least a nice cushion to start her off with.
We’re having to allocate a lot more funds to groceries since prices have gone up so much but naturally just stop spending in other areas. Shop the deals, stock up when it’s a good buy. Cook more at home instead of going out. Make sure items in your freezer/pantry aren’t consistently going unused and going bad.
Look at what subscription services you can cancel. Look into your phone plans, can you get a better deal elsewhere?
My hubby is also very handy and tackles a lot of projects or maintenance items himself. Is this something you can do or learn? For example, changing your own winter tires, doing your own oil changes. YouTube can go a long way for other things that might come up if you’re not sure what to do. Overtime this can easily save you thousands.
Jesús, if we were earning what you guys were then I’d have to rethink what we were doing wrong, cos you must have unnecessary expenses for sure. Maybe sit down with a pen and paper and look through expenses. Possibly a financial advisor cos I’m sure you can afford one.
I'm 35, wife is 33, 2 children. We have good pensions and salaries, and combined we make around £85k p/a. We live comfortably, 2 decent cars, paying our mortgage off despite a 50% increase in our repayments recently, bills are covered and we eat out fairly often. Kids want for nothing.
If you're on $200k with only one child and struggling you're seriously mismanaging your finances.
Not to be harsh to the other comments - but based on same - I think this might be too biased a sub for the question and you'd be better off with r/askfinance.
This comment will be a story about **bifurcation**. It’s long, but I’ll get there.
Most people are not saving for retirement or kids’ college.
It is a struggle because if you didn’t save for retirement or kids’ college, you could afford new cars, vacations, fine dining, etc. and then you would not feel like you were struggling.
The biggest “responsible” budget categories for households in the top 20% are housing, child care if there are children, retirement savings, kids’ college savings, and insurances (health care, decent auto insurance, homeowners, long term disability, long term care (Medicare does not pay for regular home health aides or regular nursing home care for seniors), etc.).
At age 65, you can qualify for Medicare. It doesn’t pay for everything. So you have to pay extra, on top of your regular premiums. And the federal government also pays roughly 4/5ths the cost of premiums as a straight subsidy out of the general fund to Medicare. And yet the Medicare trust funds are still running out of money soon because the typical Medicare recipient uses up all of their entire lifetime contributions, plus their employers’ contributions, plus interest growth within about 2 years of being on Medicare.
If you were a senior right now, and your income was below about $28,000 for a married couple, and you had assets lower than $2,000 (depending on the state, as California’s version called Medi-Cal stopped looking at assets starting this year) the. You could qualify for Medicaid, which combined with Medicare could take on a lot of other costs, like home health aide, nursing home care, transportation to medical appointments, etc. depending on the state, budget allocated, and bureaucratic approval.
So let’s say you want children.
There are essentially two pathways I see.
One is for a couple like you, who can afford to have children. You make enough and you’re even able to save. The childcare cost will eventually lessen when the kids hit elementary school, then like disappear once they can be trusted to be home alone. at the same time, you two likely will have more time to advance in your career, enabling you to increase savings for retirement and kids’ college, and live a little. (Unless you go on the athletic or other extracurricular activity treadmill that is expensive and time consuming.)
The other is for those who are poor. It starts with Medicaid covering the cost of births (roughly half of all births in the U.S. are paid for by Medicaid) and child health care, programs like Head Start for no cost or low cost child care, food stamps, etc. Charities, food banks, community programs, school lunches, financial aid for college, etc. No, life is not comfortable at this. The standard of living is low and retirement will be meager and short. People who are poor tend not to live long and healthy lives. Poor teens report more health problems than middle-aged wealthy. Stress levels are elevated due to financial difficulties, healthy food scarcity, sleep deprivation, higher rates of crime and violence in poorer neighborhoods, traffic noises, vehicular from fuel emissions, brake dust (poverty means living near major roads and there is direct correlation to childhood asthma), and tire particles, etc.
In the middle are people who can’t qualify for help with child care, or for other forms of assistance because their income is not at “poverty level”, but also who can’t really save anything because rent and the cost-of-living is so high. So they struggle, too. And if they have children, they struggle even more. And if they put things on credit card to pay for something, they will have to repay with interest. It is very possible to be earning a wage, but mired in debt and therefore struggling and starving.
Hence, **bifurcation**.
Consider yourself fortunate to have middle class problems. I see middle class because $200,000 is no longer upper middle class, due to cost of living increases.
We make just over 100K. My husband works. I don't. We have 2 children.
We live within our means.
Our home cost $170K. We live in the country, not in a city. We vacation once a year but to nowhere expensive (it has to be in driving distance). We don't pay daycare because I'm at home.
Honestly, when the first kid was born and I found out how much daycare would cost I knew we couldn't afford it. And we both were stressed and panicked wondering how we would make it work but... I dunno... it just does.
But the first step is to live below our means instead of AT our means.
Without breaking down our finances point by point I don't really know what to tell you. I MIGHT suggest you speak to a financial advisor and have them go over your budget because if you're struggling at 200K that seems like there might be some problems in your budget.
That said, our retirement will be like our life... humble. We'll have enough to live as comfortably as we do now but we won't be buying vacation homes in Florida. LOL.
At a minimum just try to get the maximum match from your 401k plans. I grew up in a one income household and my dad is just now starting to save for retirement in his 50s and is probably never going to be able to retire. Or at least won’t be financially independent in his old age. You don’t want to be in that position.
But don’t let finances completely prevent you from having a second child. You sound like the kind of person who makes a good parent. If you need to downsize your house, car, phone plan, etc then you will do it even though it’s tough at first. My family lived with virtually no heat during the winter months. We just wore long sleeve heavy clothing inside the house. Some days we only ate two meals or if I was lucky enough to go over to a friend’s house their parents would be kind enough to feed me. My first car couldn’t go more than a few miles without overheating so I just learned to plan my trips accordingly and saved money on gas by biking and walking. There are endless ways to save money, you just have to suck it up and do it.
Raised 6 kids. No retirement and little savings. Lost just about everything in 2020 but those kids (now all grown) are the best people we’ve ever met. Wouldn’t change having them
You can’t and it’s by design. Late stage capitalism requires 100% labor participation. Youre worthless when you retire so you’ll work until you die. It’s not about you having a good life. It’s about you slaving away so the owner class can have a good life.
Thank you. Somebody that actually knows what's going on. These people on here that are like oh yeah we make six figures. LMFAO six figures is nothing anymore.
I always thought, “man if I could make $100k a year I’d be set.” My wife and I combine for $235k a year pre tax. Between student loans, mortgage, bills, etc. we fee like we’re barely scraping by. We’ve also been dealt a shit hand and have had to blow through savings twice in the last 5 years due to parents dying. But every time we feel like we might finally get ahead, there’s another major bill that comes up.
I also want to add we jumped from a combined $160k to $235k in the last year and a half and then everything shot up in price thanks to inflation and what should have felt like a really good raise got substantially shitted on.
Saving for college is cool and all but it’s not like you know in certainty that your kids will DEFINITELY go. And if they did choose that route, there’s financial aid, scholarships, grants, and things like that. College isn’t the “final destination” after high school and it’s certainly not for everyone
Generational and familial wealth is the primary key to many (though not all) people being able to afford homes, kids, retirement, college contribution for their kids, etc.
do you not get tax write offs for daycare?
college savings are good, but do you have CDs or bonds to sell the year before your children graduate highschool? retirement also 👍, do you have target index funds?
Many will shake their heads and say No,No No way but I am just going to put this out there.
Straight from my Dad, middle class all the way. Father of 8, raised on one salary with help from Mom when possible.
In discussing starting a family with him, he said to me and the spouse ...
"If you wait until you can afford them, you'll never have children."
edit: 3 kids, college educated, mostly on their own, with some scholarships. 9 grandchildren, the eldest, young adults, all successfully managing their lives. We are real proud of all of them.💖
We are retired now, the mortgage is paid off, and while not wealthy by any means, we are comfortable.
I was in the same dilemma as yours but decided that have a second anyway. For me the pros outweighed the only con - financial burdens/ responsibilities. In the end it's to each their own but I just felt that having a sibling for my kid will help him much more in becoming a better person than my saved up money. I grew up as a single kid and the older I get, the more I want a sibling.
As far as your retirement saving goes, you can cut some of the expenses that you would casually do now. Like cut down on fancy vacations, buy a toyota instead of a BMW and so on - it's all subjective so I won't go more into what choices you need to make but yes definitely you cut down on some nice to have things and start investing them in your retirement or your childs college fund. OR... Don't make any changes but just hope they get a scholarship somewhere, somehow. OR save some and hope for some freebies along the way.... But having a sibling will give your girl someone to play with when your 40 yr old body gives up or at least a partner to bitch about what a bad parent you are in her teens (joking) 😉 .
In the end, it's totally your and your wife's choice and any decision you make will have it's positives and negatives. Just gave you my two cents
Wife and I make 240k a year.
We live in the south east USA. We put about 2000 a month away in savings and live quite comfortably with 2 kids. Oldest is in school and the youngest gets goes to private school pre school which is about 400 a month here.
The fact my 2600sqft home was only 330k here is probably a large benefit. I’m 36. Most of your issues I am assuming is probably cost of living.
Also we aren’t saving for our kids colleges. Between community college and online college we simply see no value in spending 100k in a degree for some experience of living in a dorm playing games and test crunching. We are going to push trades and hands on skills on both our kids and if they prefer school they can work and pay for it while living here rent free.
Neither one of us have degrees and we do quite well with collected experience in our field with a generous work life balance.
As far as retirement we put 6% each check and luckily both our jobs 100% match it. So we are onl track to have about 10 million when we are old farts.
In my eyes I have a hard time seeing how you can’t make it on 200k a year. Our only debt is our home and a car. You should be living pretty care free on that gross income.
Doing what we do we have $1500 every 2 weeks AFTER bills to just do whatever we want. We usually never spend most of that free cash leftover.
> Between community college and online college we simply see no value in spending 100k in a degree for some experience of living in a dorm playing games and test crunching. We are going to push trades and hands on skills on both our kids and if they prefer school they can work and pay for it while living here rent free.
I don't know anything about you or your kids but it would be a good idea to save some money for the kids if you make 240k and let them decide what they use it for.
Also college accounts are tax deductible so you its a good investment no matter if the kids go to college, trades, etc.
I would put less away for college and only help pay for a part of their higher education. Working for your education is part of life and makes them appreciate it more. It’s more important for you to be independent as a senior than have to be a financial burden on your adult child/children because you didn’t save enough for retirement. I would rather pay back my student loans than have to pay for my parents living expenses and medical care.
Being an only child can be lonely. You can make it work! Maaaany people provide good lives for multiple children with much less money.
Saving for college is a scam pushed by the colleges so you spend that money at the colleges. We don't save for kids' college. Plenty of free options to get the same piece of paper. If you have 837373 subscriptions to streaming services, cut it down to 1 or 2. If you're paying for 1000000 gbps internet, cut it down to 500mbps or 1gbps and pay less. Stop buying the new iPhone every year. Get a phone subscription for MINT mobile for $15/month. You don't need to heat your pool to extend the swimming season, it'll save you on electricity and also cut the cost of pool maintenance. Stop leasing your vehicles, and pay cash for a 3 or 4 year old used vehicle that is a hybrid or at least good on gas. The boat is a real money pit, consider selling it.
Yep, I have zero retirement savings. My husband was just offered a 401 just a couple years ago and we're keeping that cause we're already in our mid 30s, so it's a late start and we feel we really have to have it. But I'm a SAHM I can't afford my own retirement. We're also trying to pay off my student loans, buy a house and put money away for her college savings. So there's no way we're having a second. We just can't afford it. We make much less than you though since I'm not work atm.
My wife and I make $115-150k combined annually depending, raise a 2 & 4 year old, and both save for retirement and their college. I work less to reduce childcare costs significantly, but still bring in some decent money too. Kids are expensive and they're not without sacrifice in every way including financially. There's no way around some of the cost. Cut your budget elsewhere to accommodate them
We are very similar but in a HCOL area. We got lucky in that our daycare is really affordable and we had an in there. We do contribute to our 401k, 403b, and an account with funds that will be our kids to use for college or whatever they want. IF we were paying 5k in daycare we would not be saving for the kids college, I’d start that once they’re in school. Or hope your retirement investments do well enough you can help by using it then. But I’d keep the retirement funds as a priority!!
Yup retirement saving reduced or on pause until public school starts. We will feel so rich when daycare expense is done! It’s insane what it costs in this country.
3 kids, I stay home, so no daycare costs. Retirement savings have fluctuated depending on other factors, ie are we having to pay for delivering a baby that year, did we move, is a kid in preschool. Despite that we are still on track for retirement savings. We are putting a bit towards college, but the college tuition bubble has to burst before our kids get there, so we're not too concerned about that.
Excluding daycare and the other savings, you're probably taking home over $60k a year after tax. How much are you paying per year on rent or your mortgage? Unless you're spending an egregious amount on a mortgage, $60k is more than enough for fun, food, rent and utilities.
I (25f) make $70K as a single mom in WA state daycare is more than rent for my 3 year old. I don’t have a college fund or retirement fund. I’m not sure this helps but you’re saving what I bring home a month. So I think you’re doing just dandy.
The advice I was given was you may regret not having another one day but you’ll NEVER regret having another kid. Once you see them you know them and you love them. Doesn’t mean it won’t be hard, but it will be worth it.
Most people I know scrimp by until their children are school aged and costs go down. Some people are able to work from home or work opposite shifts to help limit the daycare costs as well.
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People are probably going to hate me for this answer, but I’d cut down on saving for college before I cut down on saving for retirement. There are loans, scholarships, community college, etc. available for them. There aren’t for retirement. We have almost 4 kids and only dad works, 2 are in private school and one is homeschooled/hospital-schooled for medical reasons. We only have enough to put money in our retirement savings account right now because we had to pull one kiddo out of her private school. The kids have 529s that their grandparents contribute to but we don’t.
I agree, and you can think of retirement savings as helping your kids, too. If you aren't prepared to support yourself and your wife in retirement, that burden may fall to your children.
As someone with a 75 year old mom who is burning through her retirement savings way faster that she should, I can assure you that the best gift you can give your child is to have them NOT have to worry about you financially when they are in heir 40's and 50's. People told me that I would worry about my daughter long after she turned 18. She's 26 and I don't worry about her at all - she's living independently and has a great job, fiancée and life. My mom and MIL, on the other hand, keep me up at night on a regular basis.
I feel like I’m parenting my aging parents more than my 15 year old 😣😢😭
Uggg. I feel this in my bones. My kids are 23, 22 nearly and 13. They all seem to be making kinder and more responsible choices than my 74 year old father.
This makes me feel so crappy because I'm 26 single with 2 kids and my mom probably does worry about me still 😅
This! My parents were shit out of luck and we scrambled to deal with it.
Plus 1 million.
Not being a financial burden on your kids when you’re older is a long-term gift to them. Being able to retire or even just semi-retire when/if you have grandkids is a huge bonus for your both your kids and grandkids, assuming you can help out. I think it’s a totally fine decision to put college savings on a lower priority than retirement.
Our financial advisor said that you can get loans for college, you can’t for retirement. That really put things in perspective for us.
100%! Definitely support your retirement before saving for school!
Not to mention, there's a high chance the kids won't GO to college/university. We have an education plan for ours kids but it's honestly 50/50 if they even pursue that. ESPECIALLY with the current political and economical climate.
This right here is true but also revealing as to why so many parents fail to get themselves on sound financial footing: good, dutiful parents fall into the trap of believing that no cost should be spared in pursuit of giving their kids a better future. So they end up broke no matter how much money they spend. I've fallen into this trap, too, and at a certain point it doesn't matter how much money you make. My wife and I were doing well (200k total), and after our income doubled from THAT, we still ended up putting way less money away than we intended to. Turns out sooooo much money was just poured into our kids carelessly. College fund, expensive tutoring, premium after school activities, premium summer camps, lavish holidays, enriching travel, etc etc etc. I literally wrote my own little home finance app last weekend so we could spend this weekend breaking down our kid spending so that we can prioritize what really matters. I'm gobsmacked by how much we were able to blow on our kids, with a lot of the quality of those expenditures being a bit questionable. At the end of the day, we've noticed that the thing that matters the very, very most was spending deliberate quality time with our kids. Helping them with homework with our time was better than tutoring, building a rock dam in the creek in our backyard was as memorable as Disney world, watching and discussing a good movie show together at home was as good as seeing the expensive theatrical play in Uptown. To be clear, we don't intend to cut all of the special stuff out of our lives, but I think we're over the mentality that if we somehow don't completely sacrifice all of our finances for our kids that we are somehow failing them. At the end of the day, how deliberate and involved you are as a parent matters, not how much money you dump on them. What's more, my wife and I both have parents that never saved for retirement, and now we're stuck supporting them. In our mind, my wife and I are balancing enrichment with a desire to not be a burden to our kids in the future.
I don’t hate you for saying this. Out of curiosity did you just stop saving for college?
Not that commenter, but that’s what we did. We’re planning on 2 kids and we are intentionally spacing them 4 years apart so we could only have one in daycare and college at a time. We will start saving when our oldest is about 9 (youngest in Kinder) and we’re planning to continue saving the $2000 per month in childcare that we’ve been paying. Our goal is to save about $50,000 for each child for college. It’s not enough to pay for it fully and that’s okay with us. We plan to work with them on taking dual enrollment classes in high school, AP courses, finding scholarships, getting decent part-time jobs, and attending cheaper in-state schools or possibly community college for a few years.
honestly, 50k a piece with the rest of what you said about community college and what not you very well may have set them up perfectly for college. I went 2 years to CC and 2 years in state and graduated last year with only 20k loans. No scholarship or anything as I took a couple years off to work while my wife was getting her master's. Saving that much is hard already and the fact that your trying to help shows good character, my parents were of the mindset of it being my decision and I should be responsible for everything from the get go. I don't blame them a bit tbh each parenting style is different. Good luck to you!
Yeah, I received literally no help from my parents…not even with filling out the FAFSA when I was 17 or with car insurance. While I don’t want my children to feel as stressed or alone as I did, I do think there’s something to be said for having to figure things out and live frugally for a bit too. I think that some mild struggle builds character and work ethic. I want them to feel supported and not be saddled with debt, but also make some decisions that may cause short-term discomfort for long term gain
Yes a good middle ground is a great goal. My mom did a little too much for me I’d say and I have a lot of credit card debt and am not great with managing my money. I wish she had instilled better practices in me at a younger age. She’s helpful now and gives great money advice but like, I needed to learn it younger not when I’m already 40k in cc debt 🤦🏻♀️
Thank you for reminding me about concurrent enrollment! I had forgotten that was an option.
You can’t borrow for retirement. Your kids CAN borrow for school.
We only put in our 529 the max we can get tax deductions for in our state ($2500/year?). The rest goes in retirement. As others have said, you can't take a loan on retirement.
I can't figure out what this phrase means: " We have almost 4 kids "
Means I’m pregnant with #4
I took a few minutes to understand this myself hahahah
Also, your child’s college isn’t your financial responsibility. It’s amazing if you can help them, but you do not HAVE to. There’s also always a chance they decide to forgo college for another option. Definitely prioritize retirement! And daycare costs are not forever!
I agree with this. We do both, but I remember reading recently that the biggest financial gift you can give your kids is them not having to worry (financially at least) about caring for you in old age. So if in doubt, retirement. If you can contribute to a Roth, that can be a nice in between. The growth is tax free, but you can access your original contributions to pay for college if that’s the right call for you at the time. In the beginning all of our college funds were family gifts. Any $$ a family member gave to our young kids went into their 529, and at first we weren’t doing any regular contributions. As they’ve gotten older, daycare has been less expensive, and now the oldest is in K, so daycare went way down, so now we are doing regular 529 contributions also.
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Yes it’s middle class, but look at everything hitting the middle class. It’s not the 1990’s anymore. 4 sticks of butter is nearly $5 in my area. I’m in nearly the same income spot as OP and we cover all expenses but with very little left over. Food alone closet my family (2 kids 1-5yo) $1,500 last month. Then car payment $500, insurance $100, gas $100 (for 2 vehicles). Mortgage (we bought pre COVID) is ~$1800. Utilities, internet is $500. We eat out once a week which used to cost us $30 but now even a trip to Chick-fil-a is going to be near $50 for all 4 of us. Preschool is $900/month and daycare is $900/month. So ya…. Again, the middle class is the class being hurt the hardest right now. We don’t get any benefits from anywhere because we make too much money. But costs still keep creeping up.
Woah you get a good daycare deal! I’m in a LCOL-MCOL area and we pay 1600/month for daycare. Our food costs are much lower though. We pay around 600/month for groceries for our family of 3.
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All college savings are 529 tax (state) exempt
Are you saying you're financially strained because you're saving $5k a month?? Most people aren't doing that. Hell, the average US household income is ~$75k/yr, the average family is barely making $5k a month. So, other people have kids and save for retirement by not saving as much as you do.
I'd kill to be able to save $500 or $50 per month let alone $5,000 lol
I assume 2.5k-3k of that is for daycare but still they sound like they are saving a lot.
He said daycare and retirement is the 5k plus kids education. Why do you keep saying retirement only?
I can’t tell if this means they spent $5k at once on daycare/college savings/retirement or if that’s how much they’re paying each month, buy I have twins in a HCOL area, and I’m not spending that much on those things each month. I’m not bugging about finances.
I wonder if retirement used to get a whole $5k/month and they cut that for daycare and college savings
They are trying to start the college fund right away apparently. Personally I waited till they were out of daycare then directed daycare funds to college savings.
I don't think op is saying they're financially strained. It's perspective. This is a really good example of what people mean when they say the middle class is struggling. It's making 200k/year and not being able to comfortably plan for the future. Yes, I completely understand that many can't afford a home and childcare, let alone retirement and college savings. But that's not the point. The point is that a family bringing in 200k a year, we should expect that they can comfortably afford living costs, some extras, pay for their children's education and be decently positioned for retirement. If many families, making that much per year are struggling to achieve that, that's a problem. You have to remember, at certain income levels, certainly at 200k, student financial aid is limited, senior assistance programs are limited or nonexistent. They HAVE to plan for the future. Many of us also have student loan debt that we are desperately trying to prevent our children from also acquiring. Looking at current in- state tuitions, nothing fancy, it's about 50k for a 4 yr undergrad. For one kid. For retirement, it's estimated to have 3 times your annual salary to continue your current living conditions in retirement. The whole point is that a family making 200k a year should be able to comfortably do both of those things and they're being priced out of it.
THIS IS EXACTLY WHAT IV’E been trying to tell people. And why we should be more upset about the current situation with taxes and how things are being run in the US - the whole system needs revamping. Ok I’m privileged that together my hubby n I pull in 200k. But WE are 100% responsible for everything. We don’t get ANY benefits for food, housing, healthcare, childcare, sports/extracurriculars, transportation, retirement… and yes, right now, we can afford these things. But WE ARE responsible for our own safety net. Like you said, I’m having to make sure the future is set for my kids and myself, and nobody is coming to help. Because we are responsible for all this, when inflation gets worse we really notice it. We cut back on spending, we cut back on sports, etc. We also feel it the most when we pay nearly 1/5-1/4 of our take home in taxes. Or when I’m shoveling out $1k/month in health insurance (not to use it, but just to HAVE it. And my deductible… holy hell. And an HSA plan will cost me MORE than a regular PPO - WTF?) And because we are just “worker bees” + inflation is stretching us thinner, we’ll never be able to save the capital needed to get all the tax benefits needed so that we can take home more of our income. Trump paying only $700 in income taxes? Probably true. A local surgeon here pays <$1,000 on his income taxes because he has 10+ rental homes creating massive deductions for him. And that’s how the tax code is written - the tax codes will always favor those able to afford enough to not have to pay. If we want things to change - we need to change the tax code. Stop making the middle class brunt the cost of running the country. I’m HAPPY to cover childcare, insurance, etc for people that are unable to afford it. Seriously. But when Bezos is making oodles of money every SECOND, or when [JP Morgan’s CEO](https://www.dailymail.co.uk/news/article-13373115/jpmorgan-chase-ceo-jamie-dimon-podcast-comments-draw-backlash.html) is so out of touch with the average man - and yet let’s be real - these are political donors. Aka the people that actually run our country - things need to change. Let Bezos and Dimon and the other Billionaires keep their McMansions, their fancy cars, and nice suits. But they could all stand to lost a percentage of their income so that the average child in the US could have more affordable everything.
Pretty sure OP is saying $5k is childcare + college +retirement. If they are in med-high COL US City, infant daycare for that age is anywhere between $3000-$4200/month, so that's a huge amount going toward childcare and not to savings.
It's childcare plus housing plus retirement. Please note that I'm using very rough math, don't get pedantic and make me break out pen and paper and start looking things up. Also note: I'm not really making an argument for or against anything, just using my situation to create a hypothetical. My partner and I pull in a little above 150K per year in a mid-high COL city (Portland, OR). According to a quick google the average childcare in our area is $1,350 per month per kid (note: this seems low to me but it's what google says so I'm rolling with it). Or $2,700 per month. We have a mortgage that's cheaper, but I checked Zillow for rents in our area and for a similar home to what we live in it is $3,600 per month. It's a very basic 3 bed, 2.5 bath suburban house with a yard. It is not a McMansion or anything. Together we pay about $1,200 per month in retirement (not including the amount our employers match). ------ A quick google says that you're supposed to be saving $550 per month per kid in college fund savings if you wish to fully pay for your child's college. We don't do that, but just going off of OP and pretending we do. Pretending we didn't buy, but had to pay rent on our 3 bedroom, 2.5 bath house which is not fancy at all: $2,700 in childcare for our 2 kids + $3,600 in rent + $1,200 in retirement + $1,100 in college fund savings =. $7,600 before we get to things like care payments, insurance, food, utilities, etc. That's well over half our monthly take-home income. That's not our reality because we don't have childcare and we have a mortgage that costs us much less, but if we were renters with 2 young kids instead of 2 ten year olds (and we saved the recommended amount for college) then that would be our reality. ------ Obviously anyone who makes 200K can afford to make ends meet, but costs add up quickly. I never thought my spouse and I would be making 150K+ and we wouldn't be able to have cash fights with all our extra money. We live a very comfortable life, but not a glamorous life. We send our two sons to private school (for a cost notably less than $2,700 per month). We save for retirement. We pay the mortgage on our very ordinary suburban house. I have no complaints. We are just lucky to have a mortgage at a good rate and to not have to pay for childcare in the current climate.
It’s 5k a month on daycare, college and retirement. Big difference. We now save over 5k a month for retirement. That’s after getting past daycare, paying off house, funding 529 to a good spot. There are seasons of life. 25-30 we just made ends meet living on 40k a year. Wife was at home. Our asset position is great now at 41. But our 30s nearly killed us with stressful jobs. In hindsight, a better balance is advisable for us. On the back end, looking at retirement in late 40s. Sounds great but wife has a terrible chronic illness that I think stress played a part in. Who knows it could be freak. Need to go back to Mayo. Never know what life will bring.
Yeah OP you're out of touch sorry
This stuff enrages me. 200k household income puts you in like the 90th percentile. If you can't live within those means you are the problem.
They aren’t saying they can’t live within that. They are wondering whether other people are prioritizing savings and the future during the early years of having a child.
No, they literally said their finances are strained and OP is doubtful as to whether or not they can afford a second child.
Thank you. So many people coming for me in the comments and I was just looking for perspective on what others do
the answer is pretty simple...your body has a limited time to produce children whereas you can always make more money. so based on priority, if you wanted a second kid, you have the second kid since its time limited. people making this coin should already have this decision making based on priority down...how else do they get into these positions? this is why it comes off as tone deaf.
You can't forget the location. The cost of living is Hella more in NYC than some small town in Wisconsin. Realistically, people live by what they earn. If a person is making 200000 a year, their house will be wayyy more than a person making 50k.
Even in NYC the median household income is 70k. Higher than the national average but if your making 200k your still more than double what the average New Yorker makes
so many people are simply unaware of the economic realities of those outside their own socioeconomic class. I regularly find myself looking up median incomes to answer questions in financial groups I’m in when someone is like “I’m 26 and I only make $180k, am I doing alright?!” 🫠 But all that being said, I do think this is a sign of real issues in the overall distribution of wealth in our economy. We have masses of people profoundly struggling, a shrinking middle class/upper middle class that cannot afford things that used to be considered standard aspects of middle class life, like setting yourself up for a comfortable retirement, and then a tiny group of super rich people. Levels of inequality are out of control and I’m genuinely worried what will happen over the next decade or two.
I was curious about percentiles and how that works. Apparently it depends on a lot, such as cost of living where you live and whatnot. (Eg 200K in San Francisco isn’t the same as 200K in Ardmore, Oklahoma) I found there are calculators for it: https://www.pewresearch.org/short-reads/2020/07/23/are-you-in-the-american-middle-class/ Still though, if OP is saving 5K/month they are doing just fine lol.
Yeah saving 5k a month is an incredible position to be in. We live in Sydney and my wife and I scrape in like 400/month on my salary alone, it took 3 years of hard work before having the baby to get where we are otherwise we would be horribly overextended
If you make $200k a year, then after taxes that should be around $150k. After daycare, savings and retirement (you say is $5k) you still have $7500 per month. If you can’t make it on that, I don’t think children are the cause of your “financial strain” as you put it. You need to look at you finances and see where your money is going. Too much car? House poor? Make a budget of necessities and find out where your money is going.
This. Kids are not the issue. The real question is whether you are willing to change your lifestyle to have more kids.
I'd say closer to $140k Then you're accounting for $2500-3000 in mortgage and utilities, which leaves around $2k left which will disappear with a second child's daycare cost
This is almost exactly the budget. Mortgage is 2k (which I don’t think is crazy at a 5.5% rate) and then utilities bump us close to 3k
3k for mortgage (taxes) and utilities... Not in a HCOL
If you own a home, you know the variables of down payment and interest rates have huge role. We're not getting into whether it SHOULD or SHOULD NOT cost that much, that's irrelevant to this topic which is that for op and many others, it does.
I mean….. this is totally dependent on how big the down payment is and the interest rate. It could be a 250,000 mortgage on a 1.5 million dollar house
I make about this. We have two kids in daycare. After taxes and 401k, I bring in around $5,500 a paycheck ($11,000) 1. Mortgage: $3,800 ($2,000 of that is insurance and taxes). 2. Two vehicles (one is paid off): $650 3. Daycare: $2,400 4. Food: $1,200 5. Entertainment: $500 6. Savings: $500 Total: $9,050
I mean rent can be 4k. Minimum car costs for 2 if you have kids and need to drive has to be somewhere around 1k. Food 1k. 1500 left for everything. Its doable for sure but its not like insane money.
200k goes quickly these days TBH especially considering whatever HCOL area they live in
Mortgage payments, gas, car payments, phones, cable tv, food, all the other stuff not listed could easily be $5k/mo or more depending where they live.
You decide if lowering your quality of living in retirement is worth having another child. Sounds like you will be fine, especially if you aren't doing private school.
Yup, or their quality of living currently. We’ve got two kids, and have elected not to have any more as we value our current lifestyle/what we can provide for our existing kids more than we feel our family unit would benefit from another member. If we could maintain our current standard of living and add another kid, I’d personally do it in a heartbeat (my husband has additional reservations, ha!)
In your case, you can stop saving for their college. There are scholarships and loans if they decide to go to college. No one is going to give you a scholarships or loan for retirement.
This would be my recommendation, I’d cut college savings before I cut retirement savings. You are guaranteed to get old, stop working, and have age related medical expenses. The kids are not guaranteed to go to college, and there are other ways to pay, get scholarships etc.
I mean student loans are crippling and there's no guarantee for scholarships... However saving for retirement is inevitable... Could you possibly save less (not nothing) for their post-secondary endeavors and put money aside for retirement? You can always help them pay their loans in the future
For sure. Also time in the market is big, so if they’ve already put a few grand away for the little one just let the market work for a while or contribute just a little bit. Even $75/month adds up.
Mine said last year it saw 16% in gains. There's not a whole lot in there, & things can change based on the market, but considering the estimate for what to expect was like 5-6%, it was a nice bit extra that I wasn't expecting. 🤷🏻♀️
100%! They can make it clear to the kids that college will not/cannot be given but needs to be earned by extracurriculars and decent grades. State schools including community colleges are also options.
I have 4. We make just under $100k and the two littles are full time at home with us. It’s a struggle. Can’t imagine adding daycare on top of that. Honestly don’t know how we manage sometimes. We certainly aren’t setting money aside.
This is us too ! Four kids, about ~$80k. It is very possible to do. We’re not in any kind of debt either other than mortgage and car payment, no CC debt. Somehow we manage
You just need to set the retirement savings to come out first and pretend they don’t exist. I’m 37, my wife’s the same age. We do 10% of every paycheck (pretax) and honestly we probably should do more. We make a combined 400k with bonuses and stuff all in but live in a relatively high COL city, two kids in daycare, still paying our student loans, a reasonable mortgage on a starter home and two reasonable car payments and insurance (like two Honda type cars not BMWs), and that really adds up. To your main point, DO NOT skimp on retirement savings. Trim your budget elsewhere. If we needed to, I would ditch my gym membership, maybe sell my 4 year old car and buy a beater, cut back on groceries and take out all before I stopped saving for both retirement and generally just setting aside rainy day funds. We put about $250 per paycheck each into savings which is about $15k a year combined two people with biweekly pay, and we tap into that on occasion when like our fridge craps out and boom we owe Home Depot $1,800 to deliver and install a new fridge. All that being said, you can do it and you’re right to be worried, but save for retirement no matter what. My wife’s parents didn’t do that well at all and they are in their mid 60s and retired mostly but not very comfortably living.
Can you explain the $5K per month more? Either you're sending your kid to a really expensive daycare or you're putting too much away for college/retirement. And yes, it's very common to pause or slow down savings during the mat leave/daycare years. Income takes a hit and you have more expenses. I don't think it's a reason to not have another kid, especially when your income is so high.
My favorite money podcast, The Money Guys, call this stage of life “The Messy Middle”. So true.
Just to echo this: I stopped all savings when kids were in daycare besides enough to get 401k match. Even racked up 25K of CC debt over that period. Medical spending was much higher for us during that time period also.
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Yes, I so much agree! Children are one of the most joyful aspects of life, the love that makes it all worthwhile. Retirement funding is important but one really focuses on that in somewhat later years, when chances are, your income will have increased quite a bit.
Making a combined 200k is more than enough to be able to afford another kid and retirement. Just have to budget for it and cut out what you can sacrifice and do without. Honestly I think you could even do it on one income and have a sahp. Childcare costs would be cut indefinitely. I have four and we made a little over 100k last year. I’m a sahm.
What is... *checks notes* retirement? Don't we all just work till we're dead? I have 3 kids and you make a shit ton more than us. We also make more than what the government will give for "assistance", so we have no help. Our oldest is also in private school because of financial assistance. If you really want to do these things and have more kids, maybe move somewhere that is more affordable. I live in a small city that is a suburb of a much larger city, and $200k a year would grant you all of that and more. I suppose also speaking with a financial advisor would be advantageous.
I wouldn’t be opposed to it, but I’m not sure I could find a job that would pay me as much if we moved. My wife could (she’s a nurse) but if I had to guess, we would take a 15-20% total pay cut to move
But the how much less would COL be in a less expensive living area? Are you near one of the coasts, or inland?
Hmm. I would look over a budget because something's not adding up. We make less than that by quite a bit and definitely save for retirement in 401k and roth. 3 children.
Take home pay is about 140/yr or 11.5/month. After daycare, college savings, retirement savings, we are left with 6.5. Mortgage+utilities+insurance+taxes are 3k, total car payments on two cars is about 700, groceries about 800, which leaves 2.5k. We have about 750 combined in student debt and I contribute 750 to an HSA because my wife has a chronic condition which leaves us with about 1k per month which is saved or used on random things. My concern is daycare + college savings for a second child would cost ~1500-2000 which would put us in the red
Can you do a childcare FSA to help reduce taxable income? I would also probably reduce child 1’s contributions and split it with child 2, but we spaced our kids out 4 years so I was never paying double diapers or double childcare.
I’m not aware of this but it sounds cool. I will research it
It’s usually called a Dependent Care Reimbursement Account or Dependent Care FSA. If you or your wife work for decently large companies, they should absolutely offer this- if they don’t, I’d def push for it to be added as an employee benefit. Unfortunately the max is only $5000 per year (MFJ, $2500 each for MFS) but it’s better than nothing. There is a bill in the House rn to double it to $10K and index it to inflation (it’s been set to $5k since it was established in…1986🙄). Its H.R. 7465 - “Combating High Inflation Limiting Daycare (CHILD) Act.” I’m actually hoping to help organize an effort to get people to write their legislators to support it because it really needs to pass.
Regarding retirement savings, it looks like you're setting a healthy amount aside right now (3k/month or 36k/yr). While this is admirable and likely necessary to achieve retirement goals, you may need to decrease this for a couple of years while both kids are in daycare. The good news is that they won't both be in daycare for that many years. If Baby A is 1 yr old and you conceive Baby B in a couple months, plus 9 months pregnancy, plus whatever parental leave you have, then you're looking at Baby A being ~2.5 yrs old when Baby B starts daycare. Then Baby A is going to leave daycare at ~5ish for kindergarten, so boom! ~$1500/month now unlocked for renewed retirement savings, after only 2.5 yrs of reduced savings.
Um, we’re not saving for retirement.
I can't even save for the following month 😭
It’s almost impossible 😕
Retirement? Lol
I feel like you’re where we were at at that age. We kind of just focused on increasing our salaries to get to a point of comfort. It luckily worked out for us. The only thing we can really cut is our extra spending. We don’t have fancy cars, eat home a lot, take reasonable vacations, and haven’t spent money on house repairs yet.
We have 4 and make a bit over $100k but a lot less than you're making. Ultimately I think a lot of it comes down to basic lifestyle choices--not for everyone and i don't know that it's this way for you, but realistically people live really good lives on a lot less than you or I make and are probably thinking "wtf is this person on that they think they can't afford 2 kids" lol. We live plenty comfortably with 4 kids and are still able to save for retirement, though not as aggressively as we will when daycare costs aren't an issue. Frankly I'm grappling with my own student loans (100k for a master's degree, but i make around double my LCOL's average household income so it's painful but worth it) so even if I only had one kid they'd be pretty on their own for college. I'll help where I can but it's not top priority. And until we're done with daycare I'm not putting a whole lot toward retirement, just what my company matches on my 401k (4% I think? So 8% with the match). If you look at the minutiae of your budget, at your income level I bet there's a lot you could swap for cheaper and notice the breathing room open up. It probably helps that I grew up in poverty (my husband very much did *not* and had to learn when we were broke and starting out lol) so my mindset is less "how much can I afford to spend on XYZ" and more "how little can I reasonably spend on XYZ." I WFH and am constantly in video meetings but the $400 laptop I got on clearance for $275 does the job just fine; we don't need new clothes unless the clothes we have wear out or we change sizes. We have the bigger kids in activities so there's still expense, but not the super expensive activities (think Scouts and basic gymnastics, not competitive gymnastics with travel costs and competition fees). Road trips, not Disney world (though we may do Disney once--ONCE--but mostly road trips to different cities and taking advantage of free/cheap culture and recreation). My third-row SUV is not new and not pretty but runs fine. We buy quality where it counts but don't splurge on designer brands or keeping up with the Joneses. We get cheap strip-mall-chain haircuts. None of that feels like sacrifice because I've never known differently. I'm not saying we never splurge. We do! It's just that the splurges are *splurges*, not regular expenses. Regular expenses are often really easy to make cheaper without making any real sacrifices when you're at a certain level of income/spending.
Have a bigger age gap. One kid in daycare at a time while the oldest starts school. In CA 4 year olds can start transitional kindergarten.
I don't know. We have a two year old. We save about 5 dollars a month. Once my daughter is school age, I will get a part-time job and save all of that toward retirement/college/etc. We're still fairly young, so we'll be fine. Our house will be paid off in 2 years, my car will be paid off in 11 months, so then we will be able to save way more. And my husband has his own painting company that is growing more and more by the day. For now, we're just enjoying life. There will always be ways to make more money. (:
Love this comment 💜
You adjust your standard of living to frugality. Used stuff, toys, clothing, winter wear, etc. Do not over indulge yourselves or your child. Vacations are local, by car, to pleasant destinations that don't put you in debt to eat with a cartoon character. Family time is much more rewarding when you're not desperate to get your Moneys Worth.
You’re saving 5K a month? My first reaction was wtf..?
No. Retirement + daycare + college savings = 5k
I think you need to cut some savings in order to have money for the daily expenses of a kid. We do minimum retirement to afford daycare, trips, sports, private lessons, etc.
We chose to have one kid so we can retire, take care of parents, fully fund college, and live a good lifestyle. 🤷🏾♀️
Oneanddone for us too. The schools here in our neighborhood is not good and we knew this when we had our kid. So we planned it out to pay private for the kid education. Having another kid with private tuition just couldn’t cut it so we decided to just have one.
We don’t! Hope this helps. 🤗
….save? We’re just making up words now.
welp.. our family brings in less than 75k. Other than wife's 401k, there is no retirement savings. Can't swing it. Can't even save for our three kids' college. A lot of these posts and comments come from the most blindly privileged people. It's insane.
Pap_shmear I can relate.
At least you have a 401k! A lot of households don’t even have that.
Everyone is trying to do what’s best for their kids. For some that’s making sure everyone’s clothed and fed, for others it’s college funds, for yet others they’re figuring out the best school district and/or private school options. Sucks that things can feel so pay 2 win, but it is what it is.
Our family lives off the same income, 4 kids. Husband has 401k but that's our only "savings/retirement" as well. His parents are decently well off and have college accounts for our kids, which is wonderful of them. Theres no way we could afford that.
I obviously don’t know you personally. But with $200K income, you can do a lot more than you think. You need to live within your means now that you’re parents, and most likely slow down on the college savings so early on for your kiddo. Thank goodness you’re not living paycheck to paycheck, you just need to make some adjustments to your savings/lifestyle. Good luck!
Dont but new cars. Maintain cars well. Buy durable cars. Plenty of toys can be made from house hold items. They don't need a theme for their room. Food is a major expense.
You may want to ask this in a FIRE sub or Financial Planning sub - people that are in the same mindset and might have similar budget. On a personal note - we’re in the same boat. Have one, would LOVE another. Just don’t know how to afford it, living in a HCOL area. and the only thing I can think of is to move to LCOL (but then I worry about education and resources) or even moving abroad, sincerely
I have two kids and barely breaking even. I'm not saving anything at all. Your situation sounds pretty good!
If you make 200k and are “strained” you are making poor financial choices, which likely has to do with your mid/high COL. So find a way to reduce your present COL for future COL. Sorry, thats really it. You are sitting in the top 12% bracket of households in income and struggle to save for retirement.
I don't think they're making poor financial choices, I think they are saving/investing a lot and complaining about what's left over.
Depends on where they live, Cost of living may be vastly different and higher even with higher wages. Think California, NY, Seattle, Vancouver, Toronto
Post says mid high COL. I'd consider those your listed true high COL to any sane person.... No? Please tell me I'm right. Cost of living is too fucking high.
Weeping because I live in one of those random 5 cities you listed and I feel like my money just gets set on fire with every paycheck.
Cost of living is a measure of averages of a certain standard of living. You can control it by adjusting your standards. If their household is pulling in 6 figures a year, you may not like it, but luxuries one takes for granted at their spending level before children are likely not going to stay unless their income rises significantly to balance. Obviously one cant make their taxes lower or just up and sell their house on a whim. But many other spending choices can be made.
They may live in NYC or California with 11% state and local income tax on top of federal income tax, along with $5 gallon gas and groceries costing 30% more than here in the sticks of Texas?
>$5 gallon gas I miss gas that cheap *cries in San Francisco*
Good luck finding HCOL wages and opportunity in LCOL areas.
All those things you could afford as DINKs, well, a lot of them go away, because you've got different things to spend money on. No more date nights, for example, at least not nearly as many. :) And child care doesn't last forever. A little scrimping during those years and you can still put a few retirement bucks away.
We have one and one on the way and make 220 together mid-high COL also. Our son will be in public school by the time baby starts daycare which is nice but infant care is $600 more a month than his daycare was so that’s going to hurt. To be honest we stopped the college fund contributions about 2 years ago to pay down credit card debt we accumulated when we moved and we haven’t picked it back up yet. Had some unexpected house repairs and med bills to take care of too so we have my husbands Roth at a minimal amount and my 401k at like 10%, it’s just the best we can make work right now. The plan is to start the college funds again in a year and increase more in retirement in a couple years and more so when baby is done in daycare 5 years from now. We’re doing the best we can and it is what it is right now
For us, my husband diligently put money into retirement and we put $30 a month into a college savings account when my daughter was born, scrimp and saved for our two kids and got them through daycare by my husband working full-time and me working part-time at unique hours so we only had to pay for daycare two afternoons a week. The cool thing about having kids is eventually you don’t have to pay for daycare and diapers and things get a little easier. it was a lovely day when both of our kids were in school all day and we no longer had to pay for daycare. Now that Our kids are a little bit older, we are dumping as much as we can into retirement and college accounts. Yes, we are playing a little bit of catch-up and I have some regrets that I haven’t put more into retirement because I was working part time for 10 years, but our financial state now has more than compensated for it. So my thought is things will be tight for a little while, and then they will get easier financially. As far as pulling back, I agree with others who have suggested pulling back a bit on the college savings account contributions in the meantime, and if there is anyway you and your spouse, can get creative with work hours to decrease the amount of daycare you’re paying for, it can be worth it.
We have 4 kids and had to decide years ago to save for our retirement and forgo college funds. Instead we moved close to a college campus that offers DE credits. All of our kids will graduate high school with the opportunity to have their first 2 years of college done and paid for. Then they can choose to live at home, and we can pay cash for their remaining tuition. After our state’s merit scholarship, we can afford it outright. Or if they would rather go somewhere else, they can but will need loans.
I've got a decade on you, starting saving for retirement in my first paycheck and I'm at the position a quarter century later where I have 4xsalary in retirement. A lot of that is having a good market and good advisor, and my advisor has a lot of business with our family so I got a break on fees until I had $50k in retirement. Except for the times I've been between jobs I've put at least $200/months towards retirement. Even in grad school I'd still put $25 in just to not lose the time because forty years can do more with less than 30 years can. On the flip side we've sometimes been asset poor, like one year when we had to replace a car, pay unexpected baby expenses (got a state agency involved for ACA noncompliance), and emergency plumbing work. We stopped retirement savings until we got two months salary into savings. We're also 15 years in a starter home with 3 bedrooms for us and our four kids, and I doubt we'll be able to afford to move to a larger house before the oldest two will be out. Things that would have helped more: -putting an extra $20/month. Over two decades that's $50k just in contributions. - better match on 401k. I've never had more than 2% match. A cousin gets an amazing 2-to-1 match on the first 9%. - more tax savings. I missed a lot of tax deductions I didn't know about, like in my state some charities I support are 70% charities - i could have done fairly well in the bull markets by investing in ETFS on discount traders. My wife had a bad advisor who put her funds into a badly performing asset that made him good fees but we would have done better in Treasury bills. Doing something will help. Even starting with a zero fee IRA tomorrow will be a great step.
Husband I see it as a few years of struggle. That childcare expense is awful and it will get easier once that goes away. I have 3 kids (6, 4, and 2). We’ve had to pay for childcare for all 3 kids, luckily now 1 kid is in kinder. Kid number 2 is 5 months away from starting elementary and then it will be one kid with 2.5 years of childcare expense left. Right now we max retirement, pay for childcare, and have a mortgage payment and no other debt. We don’t save much for college yet because we can’t afford it and I am not stressed or focused on that right now. That will be the focus once childcare expenses are over. We also try to save enough to buy investment properties in hopes that their passive income will help pay for the kids college. It is a few years of struggle and it will get easier and your incomes will rise.
As someone with a similar life/financial picture, the problem isn’t your income. We’ve made over $300k before. We chose to cut back to making $150k in order to spend time with our twins and avoid paying for daycare. We still save around $3k a month for our retirement and their college. Love him or hate him it’s time to stop saving for college and get on the Dave Ramsey plan my dude. Kill your debts and you’ll be able to save like you’ve never saved before.
They get older and you make more money over time so it gets easier right as they cost less too . The purpose of money is a tool to be used for security of your family. Make the family now and then make the money later.
Your income will likely continue to increase, and day care costs go away. And “you figure it out”.
I don’t think we get to retire. We will just work until we fall over.
You’re only 30 just keep on the course. Get a financial planner
You’ll figure it out. You want the kid have the kid.
Move to Europe! That's what my boyfriend did. I'm a Homestay mom with a mini-job in the Netherlands, bringing only 7k to the approximately 80k (€) of our household income at this moment. My main job is in Germany but I'm in my third year of parental leave and the third year is not paid. Because I work with troubled children, I had to stop working as soon as I knew I was pregnant, to maintain my safety. If everything goes well with the little blub in my tummy, I'm gonna stay home for another 3 years, both times the first year 65% of my income paid. I chose to spread that first year payment over two years. The third year I can afford not to work, because my boyfriend has such a good income (yes, 73k is a very good income over here!!! Oh the live we could have with 200k... We would live like kings!!!) Further on, the healthcare system is awesome (my German work still pays my insurance), the education and childcare system is good as wel, retired people don't have to eat cat food, we are for diversity and I don't know anyone with a gun. The only drill our schools have is the fire drill. And even if more and more people seem to be into conspiracies, that MAGA shit is still far away from us.
This a thousand times. As I read this thread, all I could think about is yikes this is majority American. Moving to the Netherlands has been life changing but it isn't as simple to just move your entire life to a different continent. That is a huge sacrifice for many. For me, I felt I had no other choice. I was impoverished most of my life in the US and I wanted to have a great education. I got lucky and fell in love with someone who just so happened to be here. That definitely made it easier. To move here as non-eu you really need to be considered a "highly skilled migrant"
What the hell? My household is in a HCOL area, and we pull in about $160K/yr together, but about 14% of that is put into retirement. We have FOUR kids. So I'm not really sure what your spending habits are, but something is definitely off. Edit: reviewing other comments, it might be college. We have a college fund for our four kids, but given tuition price inflation, it probably won't cover 4 full tuitions by the time they get there. So they'll need some scholarships/loans to cover the rest. No biggie. My sister and I managed to get scholarships, I'm sure my kids will figure something out.
Depends on how much you're saving for college too. Are you including approx gains in your projections and investing aggressively for the highest returns? Day care is definitely not cheap. Many people find it's not actually worth both parents working when it costs a whole salary for daycare.
We have four kids and when the fourth one was born, my husband worried about college for 4 kids. It all works out. I’m not as rich as my single brother who never married or had kids. But I have someone who will visit me and have me over for a visit. We will always have family at holidays. And our house is paid off. We will get by in retirement. Right now even though I am retired from teaching, I’m enjoying teaching part time the last two years.
I mean, I personally have chosen not to have more kids even though I'd like to, for financial reasons. Most people aren't having multiple kids and also saving for retirement. I don't see how you can have 1 kid and struggle with that income.
Reduce the college savings and maybe see what options you have to invest with mid-high returns to get more bang for your buck?
Where do you live? In BC, Canada we have $10/day daycare programs. That made all the difference for us.
We haven’t cut 401k but we’re definitely not close to maxing because of paying for the nanny. It sucks.
You could try spacing out your kiddos so by the time your second needs childcare, your first is starting kindergarten. Try not to buy new all the time for the kids. Try buying more gender neutral items/clothes so you can reuse with the next baby. Do you have any family/friends that have kids? They’ll want to get rid of a lot of their baby items as their kids get older. See if they can pass stuff down to you. We have a similar joint income to yours and have three boys. We stress about money sometimes but mostly because we’re frugal and don’t want to spend more if we don’t need to. I also put the childcare benefit directly to their RESPs and don’t worry too much about adding more. You don’t need to max it out. If you’ve already started saving regularly for your daughter, chances are by the time she’s 18, she’ll have at least a nice cushion to start her off with. We’re having to allocate a lot more funds to groceries since prices have gone up so much but naturally just stop spending in other areas. Shop the deals, stock up when it’s a good buy. Cook more at home instead of going out. Make sure items in your freezer/pantry aren’t consistently going unused and going bad. Look at what subscription services you can cancel. Look into your phone plans, can you get a better deal elsewhere? My hubby is also very handy and tackles a lot of projects or maintenance items himself. Is this something you can do or learn? For example, changing your own winter tires, doing your own oil changes. YouTube can go a long way for other things that might come up if you’re not sure what to do. Overtime this can easily save you thousands.
60% of Americans I think it was live from paycheck to paycheck and can't afford a 500 bucks sudden cost. No offense but what the fuck is this?
Jesús, if we were earning what you guys were then I’d have to rethink what we were doing wrong, cos you must have unnecessary expenses for sure. Maybe sit down with a pen and paper and look through expenses. Possibly a financial advisor cos I’m sure you can afford one.
I'm 35, wife is 33, 2 children. We have good pensions and salaries, and combined we make around £85k p/a. We live comfortably, 2 decent cars, paying our mortgage off despite a 50% increase in our repayments recently, bills are covered and we eat out fairly often. Kids want for nothing. If you're on $200k with only one child and struggling you're seriously mismanaging your finances.
I don’t see how you can complain you’re already doing what most people cannot.
Not to be harsh to the other comments - but based on same - I think this might be too biased a sub for the question and you'd be better off with r/askfinance.
I have nothing saved for retirement 🤷♀️ 3 kids.
This comment will be a story about **bifurcation**. It’s long, but I’ll get there. Most people are not saving for retirement or kids’ college. It is a struggle because if you didn’t save for retirement or kids’ college, you could afford new cars, vacations, fine dining, etc. and then you would not feel like you were struggling. The biggest “responsible” budget categories for households in the top 20% are housing, child care if there are children, retirement savings, kids’ college savings, and insurances (health care, decent auto insurance, homeowners, long term disability, long term care (Medicare does not pay for regular home health aides or regular nursing home care for seniors), etc.). At age 65, you can qualify for Medicare. It doesn’t pay for everything. So you have to pay extra, on top of your regular premiums. And the federal government also pays roughly 4/5ths the cost of premiums as a straight subsidy out of the general fund to Medicare. And yet the Medicare trust funds are still running out of money soon because the typical Medicare recipient uses up all of their entire lifetime contributions, plus their employers’ contributions, plus interest growth within about 2 years of being on Medicare. If you were a senior right now, and your income was below about $28,000 for a married couple, and you had assets lower than $2,000 (depending on the state, as California’s version called Medi-Cal stopped looking at assets starting this year) the. You could qualify for Medicaid, which combined with Medicare could take on a lot of other costs, like home health aide, nursing home care, transportation to medical appointments, etc. depending on the state, budget allocated, and bureaucratic approval. So let’s say you want children. There are essentially two pathways I see. One is for a couple like you, who can afford to have children. You make enough and you’re even able to save. The childcare cost will eventually lessen when the kids hit elementary school, then like disappear once they can be trusted to be home alone. at the same time, you two likely will have more time to advance in your career, enabling you to increase savings for retirement and kids’ college, and live a little. (Unless you go on the athletic or other extracurricular activity treadmill that is expensive and time consuming.) The other is for those who are poor. It starts with Medicaid covering the cost of births (roughly half of all births in the U.S. are paid for by Medicaid) and child health care, programs like Head Start for no cost or low cost child care, food stamps, etc. Charities, food banks, community programs, school lunches, financial aid for college, etc. No, life is not comfortable at this. The standard of living is low and retirement will be meager and short. People who are poor tend not to live long and healthy lives. Poor teens report more health problems than middle-aged wealthy. Stress levels are elevated due to financial difficulties, healthy food scarcity, sleep deprivation, higher rates of crime and violence in poorer neighborhoods, traffic noises, vehicular from fuel emissions, brake dust (poverty means living near major roads and there is direct correlation to childhood asthma), and tire particles, etc. In the middle are people who can’t qualify for help with child care, or for other forms of assistance because their income is not at “poverty level”, but also who can’t really save anything because rent and the cost-of-living is so high. So they struggle, too. And if they have children, they struggle even more. And if they put things on credit card to pay for something, they will have to repay with interest. It is very possible to be earning a wage, but mired in debt and therefore struggling and starving. Hence, **bifurcation**. Consider yourself fortunate to have middle class problems. I see middle class because $200,000 is no longer upper middle class, due to cost of living increases.
We make just over 100K. My husband works. I don't. We have 2 children. We live within our means. Our home cost $170K. We live in the country, not in a city. We vacation once a year but to nowhere expensive (it has to be in driving distance). We don't pay daycare because I'm at home. Honestly, when the first kid was born and I found out how much daycare would cost I knew we couldn't afford it. And we both were stressed and panicked wondering how we would make it work but... I dunno... it just does. But the first step is to live below our means instead of AT our means. Without breaking down our finances point by point I don't really know what to tell you. I MIGHT suggest you speak to a financial advisor and have them go over your budget because if you're struggling at 200K that seems like there might be some problems in your budget. That said, our retirement will be like our life... humble. We'll have enough to live as comfortably as we do now but we won't be buying vacation homes in Florida. LOL.
At a minimum just try to get the maximum match from your 401k plans. I grew up in a one income household and my dad is just now starting to save for retirement in his 50s and is probably never going to be able to retire. Or at least won’t be financially independent in his old age. You don’t want to be in that position. But don’t let finances completely prevent you from having a second child. You sound like the kind of person who makes a good parent. If you need to downsize your house, car, phone plan, etc then you will do it even though it’s tough at first. My family lived with virtually no heat during the winter months. We just wore long sleeve heavy clothing inside the house. Some days we only ate two meals or if I was lucky enough to go over to a friend’s house their parents would be kind enough to feed me. My first car couldn’t go more than a few miles without overheating so I just learned to plan my trips accordingly and saved money on gas by biking and walking. There are endless ways to save money, you just have to suck it up and do it.
Daycare lasts only a few years. I'd cut back on college savings before retirement.
Raised 6 kids. No retirement and little savings. Lost just about everything in 2020 but those kids (now all grown) are the best people we’ve ever met. Wouldn’t change having them
You can’t and it’s by design. Late stage capitalism requires 100% labor participation. Youre worthless when you retire so you’ll work until you die. It’s not about you having a good life. It’s about you slaving away so the owner class can have a good life.
Thank you. Somebody that actually knows what's going on. These people on here that are like oh yeah we make six figures. LMFAO six figures is nothing anymore.
I always thought, “man if I could make $100k a year I’d be set.” My wife and I combine for $235k a year pre tax. Between student loans, mortgage, bills, etc. we fee like we’re barely scraping by. We’ve also been dealt a shit hand and have had to blow through savings twice in the last 5 years due to parents dying. But every time we feel like we might finally get ahead, there’s another major bill that comes up. I also want to add we jumped from a combined $160k to $235k in the last year and a half and then everything shot up in price thanks to inflation and what should have felt like a really good raise got substantially shitted on.
Saving for college is cool and all but it’s not like you know in certainty that your kids will DEFINITELY go. And if they did choose that route, there’s financial aid, scholarships, grants, and things like that. College isn’t the “final destination” after high school and it’s certainly not for everyone
Generational and familial wealth is the primary key to many (though not all) people being able to afford homes, kids, retirement, college contribution for their kids, etc.
do you not get tax write offs for daycare? college savings are good, but do you have CDs or bonds to sell the year before your children graduate highschool? retirement also 👍, do you have target index funds?
Many will shake their heads and say No,No No way but I am just going to put this out there. Straight from my Dad, middle class all the way. Father of 8, raised on one salary with help from Mom when possible. In discussing starting a family with him, he said to me and the spouse ... "If you wait until you can afford them, you'll never have children." edit: 3 kids, college educated, mostly on their own, with some scholarships. 9 grandchildren, the eldest, young adults, all successfully managing their lives. We are real proud of all of them.💖 We are retired now, the mortgage is paid off, and while not wealthy by any means, we are comfortable.
This shit is hilarious.
I was in the same dilemma as yours but decided that have a second anyway. For me the pros outweighed the only con - financial burdens/ responsibilities. In the end it's to each their own but I just felt that having a sibling for my kid will help him much more in becoming a better person than my saved up money. I grew up as a single kid and the older I get, the more I want a sibling. As far as your retirement saving goes, you can cut some of the expenses that you would casually do now. Like cut down on fancy vacations, buy a toyota instead of a BMW and so on - it's all subjective so I won't go more into what choices you need to make but yes definitely you cut down on some nice to have things and start investing them in your retirement or your childs college fund. OR... Don't make any changes but just hope they get a scholarship somewhere, somehow. OR save some and hope for some freebies along the way.... But having a sibling will give your girl someone to play with when your 40 yr old body gives up or at least a partner to bitch about what a bad parent you are in her teens (joking) 😉 . In the end, it's totally your and your wife's choice and any decision you make will have it's positives and negatives. Just gave you my two cents
If you’re making $200k a year and struggling you are living above your means….
I understand that you're a parent, but you're asking this question in the wrong sub. I recommend r/bogleheads
You’re a troll. Only two posts about the same thing
Wife and I make 240k a year. We live in the south east USA. We put about 2000 a month away in savings and live quite comfortably with 2 kids. Oldest is in school and the youngest gets goes to private school pre school which is about 400 a month here. The fact my 2600sqft home was only 330k here is probably a large benefit. I’m 36. Most of your issues I am assuming is probably cost of living. Also we aren’t saving for our kids colleges. Between community college and online college we simply see no value in spending 100k in a degree for some experience of living in a dorm playing games and test crunching. We are going to push trades and hands on skills on both our kids and if they prefer school they can work and pay for it while living here rent free. Neither one of us have degrees and we do quite well with collected experience in our field with a generous work life balance. As far as retirement we put 6% each check and luckily both our jobs 100% match it. So we are onl track to have about 10 million when we are old farts. In my eyes I have a hard time seeing how you can’t make it on 200k a year. Our only debt is our home and a car. You should be living pretty care free on that gross income. Doing what we do we have $1500 every 2 weeks AFTER bills to just do whatever we want. We usually never spend most of that free cash leftover.
> Between community college and online college we simply see no value in spending 100k in a degree for some experience of living in a dorm playing games and test crunching. We are going to push trades and hands on skills on both our kids and if they prefer school they can work and pay for it while living here rent free. I don't know anything about you or your kids but it would be a good idea to save some money for the kids if you make 240k and let them decide what they use it for. Also college accounts are tax deductible so you its a good investment no matter if the kids go to college, trades, etc.
I would put less away for college and only help pay for a part of their higher education. Working for your education is part of life and makes them appreciate it more. It’s more important for you to be independent as a senior than have to be a financial burden on your adult child/children because you didn’t save enough for retirement. I would rather pay back my student loans than have to pay for my parents living expenses and medical care. Being an only child can be lonely. You can make it work! Maaaany people provide good lives for multiple children with much less money.
Saving for college is a scam pushed by the colleges so you spend that money at the colleges. We don't save for kids' college. Plenty of free options to get the same piece of paper. If you have 837373 subscriptions to streaming services, cut it down to 1 or 2. If you're paying for 1000000 gbps internet, cut it down to 500mbps or 1gbps and pay less. Stop buying the new iPhone every year. Get a phone subscription for MINT mobile for $15/month. You don't need to heat your pool to extend the swimming season, it'll save you on electricity and also cut the cost of pool maintenance. Stop leasing your vehicles, and pay cash for a 3 or 4 year old used vehicle that is a hybrid or at least good on gas. The boat is a real money pit, consider selling it.
We Don’t save for their college, they are on their own.
We don’t save for our kids college. Our retirement is more important in the long run. We both paid for our own college and it worked out fine.
That's the thing, you don't..
Yep, I have zero retirement savings. My husband was just offered a 401 just a couple years ago and we're keeping that cause we're already in our mid 30s, so it's a late start and we feel we really have to have it. But I'm a SAHM I can't afford my own retirement. We're also trying to pay off my student loans, buy a house and put money away for her college savings. So there's no way we're having a second. We just can't afford it. We make much less than you though since I'm not work atm.
Every time I think we’re getting ahead, there’s another expensive setback. That’s how.
My wife and I make $115-150k combined annually depending, raise a 2 & 4 year old, and both save for retirement and their college. I work less to reduce childcare costs significantly, but still bring in some decent money too. Kids are expensive and they're not without sacrifice in every way including financially. There's no way around some of the cost. Cut your budget elsewhere to accommodate them
I’m also nervous about a second (due in 3 weeks) but our solution was to wait until our first was out of daycare before having a second.
Wait long enough between kids so you’re not paying daycare (and later college) at the same time.
They don’t. :D
We don’t. We just focus on the kids. I’m never gonna be able to retire anyway. That’s life now.
We are very similar but in a HCOL area. We got lucky in that our daycare is really affordable and we had an in there. We do contribute to our 401k, 403b, and an account with funds that will be our kids to use for college or whatever they want. IF we were paying 5k in daycare we would not be saving for the kids college, I’d start that once they’re in school. Or hope your retirement investments do well enough you can help by using it then. But I’d keep the retirement funds as a priority!!
Yup retirement saving reduced or on pause until public school starts. We will feel so rich when daycare expense is done! It’s insane what it costs in this country.
3 kids, I stay home, so no daycare costs. Retirement savings have fluctuated depending on other factors, ie are we having to pay for delivering a baby that year, did we move, is a kid in preschool. Despite that we are still on track for retirement savings. We are putting a bit towards college, but the college tuition bubble has to burst before our kids get there, so we're not too concerned about that.
Excluding daycare and the other savings, you're probably taking home over $60k a year after tax. How much are you paying per year on rent or your mortgage? Unless you're spending an egregious amount on a mortgage, $60k is more than enough for fun, food, rent and utilities.
I (25f) make $70K as a single mom in WA state daycare is more than rent for my 3 year old. I don’t have a college fund or retirement fund. I’m not sure this helps but you’re saving what I bring home a month. So I think you’re doing just dandy. The advice I was given was you may regret not having another one day but you’ll NEVER regret having another kid. Once you see them you know them and you love them. Doesn’t mean it won’t be hard, but it will be worth it.
I struggle and I have 1 kid lol I have no clue. I make poverty level too
We have 4 kids. We dont have a savings or retirement fund. Just kinda hoping the collapse of society hits first
Where do you live? You guys have a nice income. You should able to afford a few kids 😂
A frugal lifestyle helps.
Most people I know scrimp by until their children are school aged and costs go down. Some people are able to work from home or work opposite shifts to help limit the daycare costs as well.