Our 2009 New Year's Resolution: Save Like Crazy!
Posted on January 01, 2009 by Her and tagged savings
Today we sat down and had a discussion we've been putting off for a while: family planning. We both want to have children, although we hadn't sorted out the timing yet. We have already achieved many milestones that will help us prepare to be parents. We have completed our educations, have steady jobs with benefits like health insurance and family leave, and have some money in savings. We even have our own apartment that, while not ideal for a family, would certainly suffice. And this year, we got married. But there is one thing that would round out our preparations and make us feel really-for-reals ready...a home of our own!
We want to be responsible and put a big down payment on a home so we can minimize our mortgage liability. Right now, we don't exactly have big piles of cash laying around. So, we decided that our goal for this year is to save like crazy. Like, balls-to-the-wall crazy savers. Our plan is to cut out unnecessary expenses like dinners out, and help keep each other on track. Our hope is to have enough saved for a down payment by spring 2010, and then start thinking about kids. Wish us luck!
What is your New Year's Resolution?
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steve | Jan 2, 2009
While I understand that owning a house can be a psychological boost, particularly if you grew up in a home your family owned, you can have a family in your apartment and get a house later. It could be better for your pocketbook and less stressful financially. Hundreds of millions worldwide do that. I would think twice about delaying having children just because you haven't purchased a house. And, if the reason is that you will feel more financially *set* as a homeowner, it actually may be the opposite. Instead of putting that 20% down on your house, keep it in reserve for use by your family and continue saving.
Good luck to you and your family, it sounds like you have made lots of preparations and are getting ready for something really exciting!
MVP | Jan 4, 2009 | Reply to steve
I may be contradicting myself here, but I agree that you should probably think twice about delaying having children only because of finances, if one of your major desires in life is to be a parent. You should be prepared for the possibility that you may not be able to get pregnant right when you want to. It's hard working for years to pay off debt and going through the steps to prepare for a family, then experiencing infertility, wondering if you waited too long.
Lisa | Jan 2, 2009
Everyone plans for a mortgage/taxes that they can afford but nobody talks daycare. If you have relatives who work for free that is awesome. Otherwise, please research how much daycare is in your area. Infant rooms run 1200/month where I live. And when we had two in daycare at once, with discounts, we were up to $1600 per month. Even when they get older, between after school care and summer camp, we run approximately 10, 000 cash after taxes on each kid. Just something that nobody ever seems to talk about.
Steve and Lisa both make good comments, especially child care.
I also understand your desire for buying a house. I'm in the middle of buying a house myself. I'm a single guy but even just by myself buying this house will be a challenge (but one I'm looking forward too).
Check out your state housing agency to see what they offer. Probably everything from homebuying education to financing. It's the way I went.
Plus now is a good time to buy. I got a good deal. You also get a tax credit up to $7500 if you're a first time home buyer. Have to buy before June 1, 2009 I believe.
Good luck!
alissabess | Jan 3, 2009 | Reply to J.
Watch out for that "tax credit" -- the $7500 is structured as an interest-free loan, not a true tax credit. Check out Michelle Singletary's column for an overview (http://www.washingtonpost.com/wp-dyn/content/article/2008/07/30/AR2008073003013.html).
MVP | Jan 4, 2009
Good idea to start planning for the family now. We worked hard to pay off our debt before having kids so one parent stay home. Now I'm really glad we did. We never could've made it on one income with a pile of debt. I took a company-offered buyout three months ago and now we've got a kiddo on the way.
Sallie's Niece | Jan 1, 2009
That's a great goal, good luck! My resolutions are still a work in progress as my job situation is a bit hectic right now. Two of them are to devote more time to pleasure reading and to save up an Emergency Fund.
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