The 55% Paycut
It was frightening enough to have to provide the primary care for the infant, but doing so on a 55% paycut made it almost terrifying.
Prior to the arrival of Eldest, we were the prototypical DINKs - Double Income No Kids - living the urban lifestyle. We frequently dined out with Thai cuisine being the preferred. Movies and trips were standard and it meant little to routinely shop at the Barnes and Nobel Superstore. And because my mate was in a federal government fellowship, her earnings were lower than mine as a corporate staffer.
My decision to stay home only came about five weeks before my mate had to return from maternity leave. It wasn't simple and the knowledge that our combined salaries would be cut by 55% made it problematic. How did we handle it and how would we do it differently now?
How We Did It
A baby means that you have new and unexpected costs for staples. What costs can you anticipate?
- Certainly diapers and remember that not all brands are created equal. Do you need all of the special touches, such as diapers that let you know they're wet by artwork that appears when it becomes wet? These are items that drive up the cost. In our case, we went with the Toys 'R Us store brand.
- Co-pays for doctor visits, assuming that you have such insurance.
- Formula, if that's what you use to feed your baby. One neighbor referred to it as "liquid gold".
- Rudimentary clothing, such as onesies. You might find that the extended family will provide the special clothing or play clothing but the staples are likely to be on you. You will also find that such items will typically not be found at second-hand stores although friends with other small children might be a source.
- Other staples such as bottles, nipples, and other safety devices and equipment. Larger items - strollers, carseats and the like - were either purchased prior to the baby's arrival, when we had available cash, or were gifts from friends. Don't expect that you can purchase such items at thrift stores since liability concerns prevent them from carrying any baby furniture. In this case, yard sales can serve as a source for reasonably priced equipment.
- We set aside money for life insurance, a first for us.
We re-examined what the spending habits and made changes.
- We were fortunate to rent at the time so we didn't have the corollary homeownership costs or worries about a mortgage.
- Cable was paid, but because we knew that we'd be spending more time at home.
- We continued to occasionally eat out, but the demands of the baby and costs meant that I did much more cooking. The Thai cuisine went away.
- We continued to drive older vehicles, although we did carry a note on one of the two autos. This was paid off early.
- Insurance was re-bid to assure that our costs were the lowest we could get.
- We paid extremely close attention to grocery sales and heavily utilized coupons, membercard savings and sales to cut the cost of some weekly groceries by 35 - 40%.
Despite these measures, we still found ourselves running a credit card balance.
When I reconsider those early days, there are certain additional things that I would consider.
- Shopping at second-hand/consignment stores for everyday adult clothing. I've found that the children's rack at such stores is sparse as children's clothing is either picked over before I get there or clothing is traded among close family friends.
- Paying off the credit card in entirety, as we typically do today.
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