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.”

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  1. says

    What a great post, thank you!! I too have some pretty strong goals as I want to be a mother, be out of debt, have a good emergency fund and be able to be home at least a year and return to work part time. That time is worth more than the money!
    I think these are some great tips here, thank you again! I’m new to personal finance blogging and these are great ideas!

  2. says

    It sounds like you’ve made some excellent choices along the way. Diversification of income is particularly good, since you’ll be losing the library side of diversification.

    May the baby bring much joy and little stress as you enjoy the fruits of your good choices.

  3. Christy says

    I want to know how you did all that remodeling for under $5000! We live in a house that is 55 years old and needs some updating. (our cabinets in the kitchen are the original METAL cabinets from the 50s) Our bathroom has to be first though as the shower has lots of cracked tiles and ‘issues’.

  4. FrugalBabe says

    We did all the work ourselves (with help from my family), we bought used cabinets and appliances, and didn’t require top of the line anything (there’s no granite or mahogany in our remodel). It’s amazing how much you can save doing a remodel if you shop on Craigslist and scrap yards instead of getting everything new.

  5. FrugalBabe says

    Our dog was an animal shelter rescue – she’s a mix breed, best guess is border collie and australian shepherd with a few others in there somewhere :)

  6. Trixie says

    Can you hear me clapping? I love reading encouraging stories like this! Thank you for sharing the great practical tips of how you guys did it.

    We are working our way out of the corporate jungle and are 1/2 there. You are so right, it is NOT about the money. It is quality of life.

    Take Care,


  7. Renae says

    Loved the post! My husband and I went minimal with my daughter (no swings, carriers, walker toys, etc.) because we had a small house and I thought they were a waste of money. She’s two now and is used to walking everywhere, and I’ve noticed a great secondary effect: she’s much more fit and active than the average two-year-old who was parked in a baby bouncer/ rocker, then was pushed everywhere in a stroller.

  8. Jenny says

    Thanks for linking your story about your time in the Peace Corps! I hadn’t seen it before and really enjoyed reading it.

    Can I ask what you and your husband did for work in your corporate jobs?

  9. FrugalBabe says

    Jenny, we both worked for a major car rental company, in management positions. The pay was good but we were working way too many hours and not enjoying our jobs at all. If we had stayed, our income would probably be about triple what it is now, but we’re so much happier with our current jobs, and that’s worth a lot.

  10. FrugalBabe says

    Frugal Trenches, we’re looking at a few different patterns right now. Once we settle on one and make the diapers (currently scheduled for the last weekend in April), I’ll write a post with all the info.

  11. says

    Awesome, you have made some excellent decisions. I can directly relate to almost all of them. Congrats.

    I love these personal glimpse into people’s financial best decisions.

  12. Frank Smit says

    Great post!

    Not only does living a wise Financial life allow you to quit working if you desire, but it also simplifies your life and makes you more capable of enjoying it.

    what I would do is keep the mortgage as long as possible, and paying of as little as possible.
    Instead of building a retirement/pension fund, I created my own ‘retirement fund’ by investing in diversified portfolio’s. This allows me more flexibility. As soon as I hit 100k+ in this account, I will never have to work again if I would desire that.

    thanks for posting & have a great day all

  13. says

    I really agree with: We don’t skimp on things that really make a difference.

    People thing that if you’re frugal, that you don’t pay for things you NEED and/or scrimp on them. This is a very good point. The whole post was good, but this part especially. :)

  14. says

    Great Post! I haven’t read your blog before and came over from the Carnival of Personal Finance hosted at The Happy Rock. I’ll be adding you to my list!

  15. says

    Great post, just too bad that so few people have the good financial habits that your family has. Living within your means, being debt-free, and enjoying the freer finer things in life can be so rewarding.

    And when you skimp on thing that are luxury items, you can afford to pay for insurance on the things that matter the most: your health and your life.

    Keep up the good financial habits!

  16. says

    This is a great post. I like your grasp of living in an affordable house along with the fact that the payments of a fixed rate mortgage become more affordable as time goes by.

    Your living style is inspirational. Thanks for sharing.

  17. kris brown says

    Seems you have your priorities straight, BUT why would you get rid of your most valuable TAX write off (your house)especially since taxes are doomed to be higher?

  18. FrugalBabe says

    Kris, the tax write-of is great, but we’re spending about $800/month in interest on our house right now. In a 25% tax bracket, that means we save $2400 on our taxes. Still puts us $7200 in the hole for the year. I’d rather not pay the interest at all, and pay taxes on the money instead.

  19. says

    Echoing the other comments here…great post! We’ve made a few different choices in our family, but many of the same. I remember people telling us we were crazy when we said that we didn’t need much for the baby. We have expanded upon the bare minimum we expected, but are still getting by with much, much less than the suggested registry at Babies-R-Us (or similar) would have you believe is “essential”. Keep up the good work and best of luck!

  20. says

    You’ve done your homework! I recently opted to become a stay-at-home mom, and let me tell you – it’s the BEST. My new “job” is to raise our kids and to make our dollars stretch as much as we can. I’m having a blast! Best wishes!

  21. says

    This was a beautiful post with sound advice. I agree with your thoughts and think it is well thought out, It is a plan i would reccommend more people try, it beats living above your means and accumulating more and more debt.

  22. Dan says

    Also, your comment about the 2 year old car not being used in your opinion… I think that buying an almost used car and driving it into the ground is probably one of the most frugal methods of car ownership.

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