Need advice: Paying for daycare

[Sentrosi2121]

So the wife and I are due to have our second child, a boy, in the middle of July. The wife and I sat down last night to look at our budget to see what we need to cut back on in order to pay for our second child. Pulling our daughter out of daycare right now, we feel, would be detrimental to her development (she's 3).

First, our assets. Between the two of us we pull in just over $4500/month. Now I'm in line for a promotion at work, which will raise my salary from $2030/month to $2300/month so that will bump our collected salaries up to $5030/month. We have no other form of income into the family.

Our debt consists of a mortgage ($1200/month), one car payment (Lease on a 2006 Trailblazer that won't be up for another year and a half at $288), and two credit cards (one is $8000 and the other is $1300, both at 0% APR). I also have a Sallie Mae loan that's $130/month. Daycare will be about $1600 when we enroll our second child into it.

So looking at our budget, we pull in around $4720 worth of bills, prescriptions, groceries, doctors appointments, etc. So at the end of each month, with my raise, we'd be looking at only a "savings" of $270/month. Hardly enough to do anything with. Does anyone have any ideas to come up with a more 'creative' way of paying for daycare? The house we live in is sitting on about $150k worth of equity. Would it be worth it to get a Home Equity loan/line of credit and pay for daycare that way?

 

[RadiclDreamer]

No, pull the other kid out of daycare and get a good private babysitter, much cheaper and they get more personalized attention. There is nothing about doing this that would hurt her development. And yes I am a parent

 

[Cuda1447]

It seems your wife makes $2200 a month, from what I can tell? Daycare costs $1600 a month. That means after daycare she only makes $600 a month. Wife quits job, works from home and takes care of kid. With a bit of luck wife can make more than $600 a month from home so you profit, plus your children get to be with their mom instead of some daycare.

 

[moshquerade]

Originally posted by: Cuda1447
It seems your wife makes $2200 a month, from what I can tell? Daycare costs $1600 a month. That means after daycare she only makes $600 a month. Wife quits job, works from home and takes care of kid. With a bit of luck wife can make more than $600 a month from home so you profit, plus your children get to be with their mom instead of some daycare.

the winner.

your wife could babysit a kid or two in your home and easily make $600/month.

 

[mh47g]

Originally posted by: Cuda1447
It seems your wife makes $2200 a month, from what I can tell? Daycare costs $1600 a month. That means after daycare she only makes $600 a month. Wife quits job, works from home and takes care of kid. With a bit of luck wife can make more than $600 a month from home so you profit, plus your children get to be with their mom instead of some daycare.

Are you serious? You obviously don't have kids. Or if you do, you've never met them.

 

[Capt Caveman]

Originally posted by: moshquerade

Originally posted by: Cuda1447
It seems your wife makes $2200 a month, from what I can tell? Daycare costs $1600 a month. That means after daycare she only makes $600 a month. Wife quits job, works from home and takes care of kid. With a bit of luck wife can make more than $600 a month from home so you profit, plus your children get to be with their mom instead of some daycare.

the winner.

your wife could babysit a kid or two in your home and easily make $600/month.

Sadly, I agree. I know a few folks that have quit their jobs to stay at home b/c it was more economical than continuing to work and pay for daycare.

 

[slsmnaz]

Originally posted by: Sentrosi2121
So the wife and I are due to have our second child, a boy, in the middle of July. The wife and I sat down last night to look at our budget to see what we need to cut back on in order to pay for our second child.

Why not have this conversation before getting preg with the 2nd child?

 

[kranky]

Originally posted by: Cuda1447
It seems your wife makes $2200 a month, from what I can tell? Daycare costs $1600 a month. That means after daycare she only makes $600 a month.

And when you figure in taxes on the wife's current income, she probably nets about $1700. That would mean the net cost to the OP of the wife quitting her job would be about $100/month.

 

[Vette73]

Why did you lease? You see a $288 payment ending in less then 2 years. I see you needing to save some cash to BUY your next car in less then 2 years.


As for daycare does either of your jobs offer any help?

Shop around for daycare. Prices can be all over the place. Also ask if they offer a discount for more then 1 child.

Can either you or your wife work from home even juts 1 day a week? That way one of you can watch your 2 kids.
Cuda1447 was getting to something as well. Tell your wife to quit. You/family pay less in tax and if she can get a part-time weekend job then the pay would be less but your tax's would also drop and since you are in a lower tax bracket you are open to more daycare benifits.

 

[Codewiz]

Au Pair FTW. You can get one for $157/week. You just have to provide room and board.

 

[Capt Caveman]

Originally posted by: Codewiz
Au Pair FTW. You can get one for $157/week. You just have to provide room and board.

And there's always the possibility of some side action.

 

[Aharami]

Originally posted by: mh47g

Originally posted by: Cuda1447
It seems your wife makes $2200 a month, from what I can tell? Daycare costs $1600 a month. That means after daycare she only makes $600 a month. Wife quits job, works from home and takes care of kid. With a bit of luck wife can make more than $600 a month from home so you profit, plus your children get to be with their mom instead of some daycare.

Are you serious? You obviously don't have kids. Or if you do, you've never met them.

why wouldnt he be serious. seems like the best option here.
I dont have a kid, but it seems it's getting harder and harder to raise a kid, let alone two. Fiancee and I have agreed to not have a kid until we both know we can comfortably raise one.

 

[Anubis]

Originally posted by: Codewiz
Au Pair FTW. You can get one for $157/week. You just have to provide room and board.

this is by far the most economical option, my sister has a "nanny" who watcher her kid as well as 1-2 others in the area, she pays far less then 1600$ a month for this

 

[vi edit]

What's the plan for when that $8000 balance starts having to be paid? Are you making minimum payments on that or are you trying to knock it out in a year? That's going to hurt...bad. That will be $350 a month (not even counting interest) for 2 years.

I think you need to either consider cheaper daycare or figure out a way to pick up another form of income until the 3 year old hits full time school age.

How does the daycare work out right now? Like $1200 month for the upcoming infant and $400 for the 3 year old? Or is it more like 1000/600?

 

[Soundmanred]

Originally posted by: Capt Caveman

Originally posted by: moshquerade

Originally posted by: Cuda1447
It seems your wife makes $2200 a month, from what I can tell? Daycare costs $1600 a month. That means after daycare she only makes $600 a month. Wife quits job, works from home and takes care of kid. With a bit of luck wife can make more than $600 a month from home so you profit, plus your children get to be with their mom instead of some daycare.

the winner.

your wife could babysit a kid or two in your home and easily make $600/month.

Sadly, I agree. I know a few folks that have quit their jobs to stay at home b/c it was more economical than continuing to work and pay for daycare.

Yup, that's where I'm at. I'd rather stay home with my daughter (she's 18 months), but it was a financial decision as well.

 

[iroast]

Pay off your CC debts and your Sallie Mae loan. Once paid off, recalculate scenario in which your wife stays at home or send kids to daycare.

Any retired parents or unemployed siblings? Ask them to move in and care for the baby while your wife works.

 

[Sentrosi2121]

Originally posted by: vi edit
What's the plan for when that $8000 balance starts having to be paid? Are you making minimum payments on that or are you trying to knock it out in a year? That's going to hurt...bad. That will be $350 a month (not even counting interest) for 2 years.

We're putting $350 on each of the two credit cards.

Originally posted by: vi edit
How does the daycare work out right now? Like $1200 month for the upcoming infant and $400 for the 3 year old? Or is it more like 1000/600?

It will be like $1000/$600 and the daycare does offer a 5% discount on the toddler and a 3% discount on the infant, or the other way around.

 

[AgaBoogaBoo]

I'd definitely do whatever you can to lower daycare costs - maybe see if your wife can get a weekend job instead so that you can stay at home with the kids when she's working and she during the week? That way you can both have jobs, not pay daycare, etc.

 

[tw1164]

Can you or your wife work PT until the kids are in school?

 

[BurnItDwn]

I have a friend who has an Au Pair from Brazil. He and his wife work, and the Au Pair watches his two kids (then after they get home, she takes one of their cars and goes to night school.) You'll save a good amount of money vs a day care, your kids will get more attention (and as an added bonus, they may learn a foreign language and get ahead in their education.) That said, do you have the extra bedroom?

Otherwise you or your wife will need to work more (second job perhaps?), or one of you would need to find some way to work from home and watch the kids (Pretty much what Cuda1447 said.)

Finally, if those options are no good, you could sell your house and buy one that's a lot less expensive, but don't expect to get top dollar for your home, and don't expect it to sell any time soon. Albany NY has lots of "cheap" real estate, perhaps you could find something in a decent part of town for around 100K and have no mortgage?

 

[Sentrosi2121]

Originally posted by: iroast
Any retired parents or unemployed siblings? Ask them to move in and care for the baby while your wife works.

My mother is retired, but she lives back in Wisconsin. I know that she'd love to move out here, but a situation with my brother's ex has forced his son to live with my mother until he gets back to the states, around December. He's currently serving in the Air Force in Italy.

My mother-in-law's health is starting to slide a bit. She had her arm broken a couple of years ago and is currently trying to get a settlement out of that. She can't lift her arm past horizontal relative to the floor. But, as with all lawsuits, the insurance company is taking their sweet time with it.

 

[vi edit]

Are you affiliated/attend church at all and not adverse to having a your children in a parochial school?

The Catholic church near my home has a full fledge daycare and elementary school program. Day care is around $250 a month for 2 & 3 year olds. It's much more cost effective than the $600+ that many independent daycares charge.

 

[waggy]

Originally posted by: Cuda1447
It seems your wife makes $2200 a month, from what I can tell? Daycare costs $1600 a month. That means after daycare she only makes $600 a month. Wife quits job, works from home and takes care of kid. With a bit of luck wife can make more than $600 a month from home so you profit, plus your children get to be with their mom instead of some daycare.

yeap thats what we did. though the plan was for my wife to stay home but ehs does not have the personality for it heh. We also looked into starting a day care. but that fell through. Though i do take care of a few kids and make a decent amount for little time put in.



and if you look around there are cheaper daycare. $400 week is expensive.

 

[Saulbadguy]

Check to see if your work offers a dependent care flex savings account plan. You can pay for daycare out of pretax dollars which will help a bit.

I would consider selling your house and renting a smaller place until you are out of debt. You could also get a part time job to help move things along faster.

 

[Saulbadguy]

Oh, and $1600 a month is way too expensive for daycare. I'd call around.