Message Font: Serif | Sans-Serif
 
UnThreaded | Threaded | Whole Thread (12) | Ignore Thread Prev Thread | Next Thread
Author: monica3674 One star, 50 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 5069  
Subject: FIRE Planning for a future SAHM Date: 8/10/2003 9:24 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 1
My husband and I are both 29 years old. When we married three years ago, we made our "5 year plan." I would work for 5 more years, we would agressively pay down the mortgage and invest, and then we would have 2 kids and I would stay home for approximately 10 years then go back to work.

So far, our plan has gone well. We are saving and investing. I have been wondering, though, how my leaving the workforce is going to affect our RE plans. Our incomes are approx equal, so we will be cutting our monthly income in half. How can we continue to build our investments with less money coming in? Are there others out there in similar situations? What have you done to make up for the SAHM's lack of earnings?

I think that by working first and investing then having kids, our money that we do invest will have more time to grow. Had we had the kids first, we wouldn't get all the benefits of the compound interest.

Thanks for any ideas!

Monica
Print the post Back To Top
Author: phantomdiver Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 279 of 5069
Subject: Re: FIRE Planning for a future SAHM Date: 8/10/2003 9:52 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 5
Had we had the kids first, we wouldn't get all the benefits of the compound interest.

This is a question of doing what is most important to you. If retiring early is the top goal on your list, then you should do what you're planning. If, however, having kids is the top goal -- especially if it matters for you to produce your own biologically -- then it seems to me that it makes most sense to have them now or soon, before your fertility starts going down, as it does starting at about age 30.

When DH and I were married, we were 21 and 23. We hadn't ever heard of retiring early, and we had no money anyway, and we never expected to have any. Plus, pensions were a lot more secure in 1979 than they are now. The question for us was, do we have kids or have a house? Because with the 18% mortage rates of the late 70s and early 80s, we sure couldn't have both. We decided to have kids and forego a house forever, and we had three kids.

Then in 1987 we managed to buy a house and got pregnant with #4. DH immediately lost his job. He had had one only briefly, because he'd taken care of #1 and #2 and then gone back to school. Then we had #3 and kept all the kids in day care, full time this time. It was actually kind of a relief when he lost his job, because we didn't have to worry about day care any more. Stay-at-home parenting has a lot to be said for it!

Money was *very* tight for a while. Then we got a windfall, and things started getting easier. This was about the time when I started planning for retirement, when I was 34. Shortly thereafter, I heard about FIRE, and things clicked for me. Our financial plan is progressing pretty well, even with DH pretty much still not making any money -- he's partially disabled.

I do have a point somewhere . . . oh, yeah, here it is. :-) You can plan all you like, but life gets in the way sometimes. Your best chance at success comes when you go for what you've identified as most important to you, after careful consideration of all your goals. I'm really, really, really glad we had our kids starting at 25 and 23. They've sucked money out of us, of course, but it is a thousand times worth it to have them.

This may sound like I'm preaching, and I'm sorry if it does. I just want to throw in my two cents and see if it might actually do some good.

phantomdiver

Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post Back To Top
Author: fredinseoul Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 280 of 5069
Subject: Re: FIRE Planning for a future SAHM Date: 8/11/2003 12:29 AM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 1
Monica,

Another poster suggested that you start living on half now. Take one salary, and start living only on that one. Save all of the other one. Do not cheat, keep within your budget. You'll find out if you can live on one salary. You should also try to estimate the costs of the child/ren you plan to have: ie. medical, dental, clothes, diapers, food, etc, and try to reflect that in your budget. If you can't you will need to re-examine your plan and find a way to be a SAHM and live within your budget.

My personal opinion now, if retiring early is more important of a goal, you need to push children back further. IF children are more important, you probably need to forego retirement. Children are very expensive. Medical expenses alone will be significant. Add in the other, run of the course costs, and you face a significant challenge.

Good luck in your decision.

fredinseoul

Print the post Back To Top
Author: Lammergeier40 Big red star, 1000 posts Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 283 of 5069
Subject: Re: FIRE Planning for a future SAHM Date: 8/11/2003 7:49 AM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 7
I would work for 5 more years, we would agressively pay down the mortgage and invest, and then we would have 2 kids and I would stay home for approximately 10 years then go back to work.

My wife and I are about 6 years into what started as a similar "10 years off plan." But for the last 3 years I've been suggesting "Hon, you don't really want to go back to work, and you don't have to go back to work if you don't want to. We'll still get there alright."

And finally in the last year, for a lot of reasons, she's come around to agreeing with me. From my perspective, sharing the misery isn't a valid reason for both of us to work full time. Nor is racing towards FIRE at the fastest rate possible, ignoring what life is like on the way. And if you're embracing a LBYM lifestyle, there is a lot that a SAHM/F can do to contribute towards getting there (especially if you have kids).

There's still an enormous segment of society that evaluates people by what they do for wages and not by who they are and how they live, and SAHM bear the brunt of that discrimination, but as long as you surround yourself with like-minded individuals it should be OK.

Good luck,

Todd

Print the post Back To Top
Author: GusSmed Big gold star, 5000 posts Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 285 of 5069
Subject: Re: FIRE Planning for a future SAHM Date: 8/11/2003 9:53 AM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 2
I agree with Phantomdiver. If kids are something you want, it's best to be thinking about them sooner rather than later. I was quite careful in my financial planning, and delayed trying for children until I could clearly afford them - and then ended up not having children.

In truth, for most middle-class families, it's not really a question of whether you can afford children, it's what other luxuries you will have to give up in order to have them. Despite the flak I see on a regular basis from the LBYM board and the Choosing Not To Have Children board, very few people who post on a board like this will be put on the street by having children. You may end up pushing back FIRE, but there's just as much a trade off between being willing to live frugally and FIRE as between children and FIRE.

Phantomdiver is both right and wrong about decreasing fertility. In truth, the cutoff point is closer to 35 than to 30. On the other hand, women who have children earlier in life are less likely to experience infertility later. Why is not known.

There's also the issue of leaving yourself time for remedies if things don't work out. When I married my present wife, I was 31 and she was 37. We started trying for children immediately, because we knew it was an issue. After a year, we started pursuing infertility treatments. We went through 9 cycles of IUI, intra-uterine insemination. We went through 3 cycles of IVF with my wife's eggs, which we discovered were simply not all that viable at her age. When we moved on to donor eggs, we were told only to consider donors under 30, due to egg quality issues.

The main reason why it's 30, and not 35, is that IVF is chancier than normal fertilization. Typically they replace 4 zygotes that are at the 4-8 cell stage, hoping that one will make it to maturity.

After 3 failed IVF cycles with donor eggs, we stopped. The doctors simply could not tell us what failed. There's a good deal they don't know, as yet.

This doesn't happen to most people, but if you're thinking about FIRE, you're familiar with the idea of SWR's which plan for low-probability adverse results. Knowing what I do now, if I were in your position and children were a real priority, I'd be trying to figure out the earliest possible date that I could afford to do it - and I'd have a very broad definition of "afford", in the sense that I'd be examining what little luxuries I took for granted right now I could live without.

On the other hand, if you're willing to live with a small chance - call it 10% - that you'll never have children, your plan is a reasonable one, and you should try fredinseoul's plan of living on one salary now, and saving the rest.

If you do want children, ignore fredinseoul's suggestion of pushing children back past 34 in order to FIRE earlier. The odds get much, much worse as you approach 40, and it's the postive outcomes that start becoming the low-probability results. Women do get pregnant as late as 42-43, but it's rare. If you read about some celebrity getting pregnant at 48, I guarantee you it's IVF with donor eggs.

- Gus

Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post Back To Top
Author: vickifool Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 289 of 5069
Subject: Re: FIRE Planning for a future SAHM Date: 8/11/2003 12:49 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 2
Your plan sounds remarkably like what my family did. I didn't plan to be a SAHM but it made sense.

Look at the costs of you working:
Social Security and Medicare deductions.
Income taxes at higher tax rates.
Transportation and work clothes.
Convenience food and services because you are too tired to do things for yourself.

If you run the numbers on both of you working compared with one of you working, you may be very surprised at how little the second earner actually gains. Add in daycare and the results may be negative. Check "Your Money or Your Life" out of the library for complete guidance on how to calculate the true cost of working.

Ideas:
Make your husband's lunches and a thermos of coffee instead of him eating out.
Make nutritious dinners instead of eating out. Save money on food and health care! Have interesting leftovers for those lunches.
Make a price book so that you will know when the advertised specials are really a good deal and you can stock up. Shop when the stores are less crowded and save time.
Run errands without having to take time off work.
Meet friends who can pass on children's clothes and other stuff.
Wash your own cars. Change your own oil. Make minor repairs. Make things. Grow things. Go to the library. Do laundry.
SAHM can take over finances and investing and tax preparation.
Breastfeed. Use cloth diapers. Pay attention to your children and prevent problems.
Have time to have fun on weekends or exercise on weekdays because the SAHM did the errands and the home/housework. Get your life back.


On the negative side, we use more utilities when I'm home. And we need a second car so I can do all those errands.

Vickifool

Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post Back To Top
Author: monica3674 One star, 50 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 302 of 5069
Subject: Re: FIRE Planning for a future SAHM Date: 8/11/2003 3:37 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 1
Thanks for the suggestions. My mother saw that special on 20/20 or one of the other news shows on women waiting longer to have kids and then finding out they're not able to. She's been bugging my sister and me a bit about this. I am a little worried about infertility issues - the idea that I won't be able to have kids makes me nervous.

My DH and I definitely live frugally now. We enjoy seeing how much money we can save. Truly, we could probably have kids right now and afford it. We want to put ourselves in a position, though, where when I stop working, we won't have to regularly worry about money. I just finished my Master's Degree, and I'll get a $10k pay raise when school starts (I teach.) I need to work for a year to recoup what we spent on tuition. Michigan requires its teachers take classes towards a master's but most school districts don't help with tuition.

Anyways...the plan is to start trying for kids somewhere around 8/04. I will be 30.5 years old. This way, I can finish off the school year with my accumulated sick days.

I definitely want to stay at home, but it is really difficult for women to take time off from their careers. The year after I plan on leaving, my base pay would be $72,000. I know that kids are priceless, but this is going to really put a dent in our FIRE plans. I have been thinking about working one or two days a week and having my dad and my FIL take the baby one day a piece. Who knows, though, once the baby comes, I may never want to work another day!

Sorry this is so long!

Monica

Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post Back To Top
Author: phantomdiver Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 303 of 5069
Subject: Re: FIRE Planning for a future SAHM Date: 8/11/2003 3:40 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
Anyways...the plan is to start trying for kids somewhere around 8/04. I will be 30.5 years old.

Ah. That's younger than I thought, somehow. I must've run the numbers wrong.

Best of luck to you! And keep us posted!

phantomdiver

Print the post Back To Top
Author: GusSmed Big gold star, 5000 posts Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 304 of 5069
Subject: Re: FIRE Planning for a future SAHM Date: 8/11/2003 4:03 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
I am a little worried about infertility issues - the idea that I won't be able to have kids makes me nervous.

As well it should. That said, it doesn't happen to everyone, or even most people. I know a woman who was 34 who saw what we were going through and decided to stop waiting. She got pregnant the first month she tried. Nor did she have any trouble getting pregnant the second time, though she did have to have a hysterectomy after the second one because she started hemorrhaging and they could not stop it.

Side note: giving birth at home with a midwife is stupid. Sure, most of the time everything goes well, but the low-probability adverse result is death. Childbirth is dangerous, and it's foolish to pretend that it isn't for a more "natural" experience.

Anyways...the plan is to start trying for kids somewhere around 8/04. I will be 30.5 years old. This way, I can finish off the school year with my accumulated sick days.

That sounds perfectly reasonable to me. The way you phrased your original post, I thought you meant 5 years from now, or 8/08. 30 is giving yourself enough time. 8/08 is probably enough time, too, but there's less time to take action if everything didn't work out perfectly.

Who knows, though, once the baby comes, I may never want to work another day!

Motherhood does tend to do strange hormonal things to you, at least if you wanted children in the first place. The woman I mentioned before had a real personality change after she gave birth. She did eventually return to work, but it wasn't as much the center of her life as it was before.

- Gus

Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post Back To Top
Author: phantomdiver Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 305 of 5069
Subject: Re: FIRE Planning for a future SAHM Date: 8/11/2003 4:07 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
Side note: giving birth at home with a midwife is stupid. Sure, most of the time everything goes well, but the low-probability adverse result is death. Childbirth is dangerous, and it's foolish to pretend that it isn't for a more "natural" experience.

It isn't necessarily stupid. Certified nurse-midwives check out their patients six ways to Sunday and route all the tough, complicated cases to their back-up doctors. They also have back-up plans to get patients to emergency rooms, rescue squads, etc.

But I'm with you in not wanting an at-home midwife birth. I figured that DH and I would have to clean up the mess, and then there's the problem of keeping the other kids busy while we were busy giving birth, and all that.

phantomdiver

Print the post Back To Top
Author: SoftSimp Two stars, 250 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 307 of 5069
Subject: Re: FIRE Planning for a future SAHM Date: 8/11/2003 4:56 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 3
I definitely want to stay at home, but it is really difficult for women to take time off from their careers. The year after I plan on leaving, my base pay would be $72,000.

Some random thoughts:

You could take 6 weeks maternity leave, then have DH stay home w/baby. This works even if you're breastfeeding - supply is built up over the first weeks, then you can pump and store so DH can feed.

We use a "home daycare mom" - basically a mother who watches children in her home, licensed and certified through a state program. She watches some kids part-time, others full-time, and she's very affordable. Her food budget is supplemented through the daycare program and in return she develops balanced meal plans for the kids.

You could split the care between your dad, FIL, DH, you, and a home daycare mom. I wouldn't recommend this, though, as the baby would have a tough time bonding with so many caregivers.

We didn't have any parents available to watch our kids (except stepson, years ago) because DH's mother is dead and my mother is physically unable, so our choices were quite limited. When we found the home daycare mom program it was such a relief. Basically, the kids are in a home atmosphere (as they would be with an aunt or a grandparent), they have other kids their age to interact with, and the person responsible for them is focused solely on caring for them - she's not trying to divide her time between working at home, studying, running errands or anything else, because caring for the kids is her job and her #1 priority during the day.

I was nervous about placing my first baby in home daycare, but after seeing the way he blossomed in that environment, I had no compunction at all about placing my second baby with the same daycare mom. My first is now 6 and doesn't need to go to daycare anymore, because I work at home, but he still loves to go so we send him with his little brother occasionally so he can visit with his buddies and his "daycare mom."

I imagine that if your daycare mom was just in it for the money, the situation might not be ideal, but the lady we found absolutely loves kids and does it primarily for that reason (she's even watched my 6 yo for free, not wanting him to miss out on fun events like b-day parties just because our budget is tight). The income she earns from it seems an extra bonus. Her own kids have all gone off to college and/or married. My kids adore her.

Just wanted to let you know there are options. IMO, deciding not to stay home does NOT make you a bad mother. Each family needs to decide for themselves what the "ideal" situation is, what sacrifices they're willing to make, and what things they absolutely won't give up.

I know women who not only stay home with their kids, but also home school them. While I admire their devotion, I could never do this. I also know women who've decided not to have children because they didn't want the responsibility and didn't want to make the necessary sacrifices.

Then there are the (thankfully rare) women I know who stay home with their children and can't wait until their DH arrives home so they can dump the baby in his lap and take a break. They resent their DH for not being home, they resent the baby for not giving them and time to themselves, and they resent themselves for not being happy. These women have made the wrong choice, in one form or another. It is very unfortunate that their children suffer because of it.

For us, we wanted kids, we wanted to be able to send them to college, and we want to be able to retire one day. The one thing I would not give up is a loving environment for them - but I realized that they didn't need to be with ME 24-7 to be in a loving environment. Being with other kids and having the undivided attention of a loving adult care giver has benefits that I could not have provided here, since I couldn't give up my consulting business entirely and still stay afloat financially.

The way it worked out is that when my kids are with me, I'm able to give them my attention AND I'm not flipping out over the financial situation, so I'm less stressed. I really think that in our case a home daycare mom was a better alternative for me AND for them than keeping them home with me would have been.

SS

Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post Back To Top
Author: decath Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 391 of 5069
Subject: Re: FIRE Planning for a future SAHM Date: 8/14/2003 5:19 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
vickifool:
If you run the numbers on both of you working compared with one of you working, you may be very surprised at how little the second earner actually gains. Add in daycare and the results may be negative. Check "Your Money or Your Life" out of the library for complete guidance on how to calculate the true cost of working.

Ideas:
Make your husband's lunches and a thermos of coffee instead of him eating out.
Make nutritious dinners instead of eating out. Save money on food and health care! Have interesting leftovers for those lunches.
Make a price book so that you will know when the advertised specials are really a good deal and you can stock up. Shop when the stores are less crowded and save time.
Run errands without having to take time off work.
Meet friends who can pass on children's clothes and other stuff.
Wash your own cars. Change your own oil. Make minor repairs. Make things. Grow things. Go to the library. Do laundry.
SAHM can take over finances and investing and tax preparation.
Breastfeed. Use cloth diapers. Pay attention to your children and prevent problems.
Have time to have fun on weekends or exercise on weekdays because the SAHM did the errands and the home/housework. Get your life back.


This is great advice and exactly how we did it for 20 years and counting. We were married at the ages of 21 and 24, before either of us had graduated from college. Our 1st 2 kids were unplanned while I was 21 and the 2nd at 23. We played catch up for 10 years. My SAHW was forced to LBHM while I had the career and did all the outside stuff: yard work, built garage, built fence and many other small projects.

During that time I put away 10% in the 401k and another 10% to mortgage pre-pay. We drove older small cars (Huyndai and Hondas).

I don't recommend how we did it and like the 5 year plan the original poster is doing. If you agressively invest for 5 years, then cut back some when one of you quits work. You still should FIRE well before the age of 65.

Even with my early goof ups (getting married too soon and with kids to soon, a few credit card binges and a few disasterous investment decisions) I estimate RE around the age of 50 for me. Possibly sooner if my now SAHM wife would work some.

decath

Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post Back To Top
UnThreaded | Threaded | Whole Thread (12) | Ignore Thread Prev Thread | Next Thread
Advertisement