The Choices We Make

My husband and I both currently work full-time (probably more than full-time if we were to actually keep track).  We don’t make a huge amount of money, but it’s plenty for us.  I know we could be earning a lot more money if that were our primary focus, but we decided a long time ago that quality of life is more important than a paycheck, and it’s been more than five years since we quit our corporate jobs and launched our own business.  In addition to our insurance agency, I have a part-time job at the local library that made up about $20,000 of our total income last year.  If I quit that job when the baby is born, it will be a significant pay cut.  And yet I know that we’ll be just fine financially if I do decide to let the library job go.  In situations like this, luck rarely has much to do with it.  Anyone can set themselves up to have options when it comes to work.  That’s not to say that it will be easy, but it’s not luck and it’s not unattainable.  Here’s what we’ve done to give ourselves choices with regards to working and taking care of our baby:

We got out of debt before we got pregnant.  We do still have mortgage debt, which will be paid off by the time I’m about 40,  but I didn’t want to wait another ten years to have a baby.

Speaking of mortgage debt, we decided to keep our “starter house” forever.  Our mortgage is about $1200/month, although we always pay extra.  Instead of upgrading to a bigger house for our expanded family, we’re making our 1300 square foot house work more efficiently.  We’ve done quite a bit of remodeling in the last year, but we’ve done it on a very low budget (about $5000 total, for a kitchen remodel, new office space, and new floors).  As the years go by, our fixed rate mortgage will become more and more affordable – we’ll never be house poor.

We drive old cars.  Mine is a 1991, my husband’s is a 1990.  They each get nearly 30 miles to the gallon.  We will drive them (and maintain them) until they just don’t go anymore.  At that point, we’ll buy another used car (two years old doesn’t qualify as “used” to us – we’d really only be looking at something at least ten years old when we do buy another car).  Our auto insurance is less than $50/month for two cars, and of course we have no car payments.

We buy all of our clothes used.  The only exception is socks, underwear, and running shoes.

We cook most of our food at home.  Over the last several weeks when we were remodeling our kitchen, we ate out a lot more than usual, but we’re back on track now that the kitchen is finished.

We consider very little of the stuff that’s marketed to new parents to be truly necessary.  We’re making our own cloth diapers and have found some that we’ve bought used.  We have a car seat, a crib, some cute baby clothes that we’ve received as gifts and hand-me-downs, and a couple of good slings.  No color-coordinated bedding for the nursery  (aren’t babies just supposed to sleep on a mattress with a sheet on it anyway?), no wipe warmers, no changing table (we got a used changing pad that screws to the top of the dresser we put in the baby’s room).  I’ll be breast feeding exclusively until the baby has teeth, and then we’ll be using an inexpensive food grinder to grind up a little of whatever we’re eating to supplement the breast milk.  We will be putting $100/month into a 529 plan, and our health insurance will increase by about $80/month with the baby on the plan, but we’ll be skipping a lot of the expenses that seem to come with the territory for a lot of new parents.

We don’t skimp on things that really make a difference.  We have $500,000 life insurance policies.  We have health insurance, liability auto insurance and homeowner’s insurance.  We fully fund our HSA in order to have money available if we need to meet our health insurance deductible.  We fund our retirement plans and an emergency account.   We haven’t been to a movie theater in at least two years, but we spend about $45/week on organic fruits and veggies.  If we didn’t have insurance, we would “save” several hundred dollars a month, but our financial foundation would be a house of cards.  So we’ve made a point to spend very little on stuff like clothing and entertainment and put our money into things that make our life more secure instead.  It makes adding a new family member a lot less scary.

We diversified our income.  When we first started working in the health insurance industry, we worked for one company, selling only their product.We soon decided that by offering lots of different products, we could provide better service to our clients and more stability for ourselves (it would suck to be a captive agent for a company that all of a sudden stops offering products in your state).  Setting up our own brokerage, with no advance commissions and no income guarantees was a scary step, but it got us to where we are now, with income from several different companies every month.  Not having all our eggs in one basket is a reassuring feeling.

We got in the habit of saving a good chunk of our income.  So if our income drops for a while, we wouldn’t notice a huge difference, since a lot of my income has been automatically routed to retirement plans.  That’s not to say that we’re going to stop funding our retirement in order to have a baby, just that it will be easier to not have the income than it would have been if we had been spending every penny I had been earning over the years.

We really like free and almost-free entertainment.  An ideal weekend for us involves a long bike ride, Frisbee in the park with the dog, a movie from Redbox, and home-cooked meals.  These are all things that we can do with a baby, cost almost nothing, and have an added benefit of keeping us healthy as well as happy.

We’ve been much poorer in the past than we will be if I quit my job at the library.  So we know we can do it.  This is true for most of us, although we may not like to remember it.  Think back to when you were in college (assuming that you didn’t have a monthly hand out from wealthy parents) and struggling to make ends meet.  Once you paid for books and tuition, there wasn’t much left over.  Rice and beans was a way of life.  The dollar theater was big-time entertainment.  A couch from Goodwill was fine, and one that you found on the curb was even better.  Your car was probably nearly as old as you were, if you had one at all.  Now fast-forward ten years and all of a sudden you find yourself “needing” $70,000/year to pay for two new cars, a big screen TV, a housekeeper, and weekly manicures.  I find that it’s helpful to remind myself of what I’ve gotten by with in the past.  It helps put some perspective into the needs vs. wants question.  During my time as a college student, and then as a Peace Corps Volunteer, I made do with very little – and was perfectly content with my life.  I can do the same now.

Life is all about choices.  Lucky people tend to make their own luck by the choices they make.  I love reading pf blogs, because I see so many people who are making good choices and setting themselves up for good luck and happy futures.  When we take the time to build a solid foundation, we give ourselves options and opportunities that wouldn’t otherwise be there, and then we get to enjoy all of our “good fortune.”