This is the second half of our money mismanagement post. For the first half, see here.
It was really when we moved for my husband’s first “real” job (in his area of expertise) that we ran into trouble. Although we were living in a small town again with very little to do, we ended up spending a lot on housing, because said small town is a destination place highly desired by some people (who weren’t us). We got pregnant and decided we needed to move to another place, then we had a baby, and then moved again because the second place had roaches, a looming foreclosure, and a terrible landlord (obvs). The place we moved to was a townhouse, and at the very top of what we could afford, but it was the nicest place we ever lived while we were together – and the nicest place I had ever lived, period. (“Granite countertops?! I thought they only had those on House Hunters! SQUEEEEE!”)
If I had to determine when the decline began, it was probably making the choice of living in that townhouse. It was too nice for us, and I should have recognized that at the time. Unfortunately, I was blinded by beauty – one of my main faults when it comes to money management. I could make other excuses (“It was the only place that wasn’t a wreck,” “It had running water,” “The landlord didn’t SEEM like an asshole at the time”), but in the end, paying more than you really should for a house isn’t smart. We weren’t paying more than 30% of our income in housing costs, but when much of your income needs to be devoted to paying down debt and you’re paying for full-time daycare, then 30% is still too much for housing (in my opinion).
That was about 4 years ago now. That’s when I noticed that money was going to become a real problem for us.
We were spending over 25% of our monthly take-home pay on daycare. Side note: Fortunately, L was born in May, which meant I was able to go back to work the following August and it also means that she qualifies to go to kindergarten the fall after she turns 5. This is great, monetarily, because although we have been paying out the nose for childcare all this time, it could have been worse – if she had been born earlier in the year, then I would have had to take more sick days or even unpaid leave, and if she had been born later in the year, she could have had to stay out of kindergarten for a whole extra year (for which we would have had to pay at daycare).
People, I don’t even know why someone in our situation would ever have more than one kid. I know people do. Honestly, I can’t even imagine people having more than one child, debt issues or no! In those first six months, I would shake my head in disbelief at the concept that someone could be taking care of an infant and running after a toddler AT THE SAME TIME. Don’t get me wrong – some people are superhuman. And then there’s me. But I digress.
25% in childcare, 30% in housing, ~25% in student loan debt (and that was the minimum payments!). That doesn’t leave so much for living expenses. I knew we needed to make some changes! And H agreed.
What is childcare like in your area? Do you find yourself spending 25% or more of your take-home pay on it?
Thanks for reading… more to come!