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Archive for July, 2009

Adjusting the budget for twins

July 29th, 2009 at 06:08 am

The twins are due in November, and I'm planning to quit working Oct 1, so I've been looking over our budget to figure out where to cut back. I think we need to cut about $675 per month to make it work. Here are some numbers based on averages for Jan-Jun this year.

DH pay after taxes $7900
401(k) $1318

Needs Accruing (Total $875):
Car Ins $560 Jun/Dec $93.00
Car Regis. $440 May $40.00
HOA $105 quarterly $35.00
Home Ins. $770 Apr $66.00
IEEE dues. $180 Nov $15.00
Life Ins $150 Mar/Aug $25.00
Property Tax $3600 Nov/Mar $600

Needs/Contracts Monthly (Total $3250):
Cable TV $45.00
Cell Phone $77.00
Electric & Gas $146.32
Gas Car $180.62
Groceries $488.94
Home Security $28.99
Mortgage $1,990.00
Phone/DSL $84.61
Water $210.00

Vacation (Total $200):
In-laws overseas $0.00
Relatives USA $100.00
USA travel $100.00

Wants Goals (Total $150):
Charity $600/yr $50.00
Christmas Gifts $100.00
Big Purchases TBD

Wants Montly (Total $2800):
BevMo $43.65
Cash $237.00
Cleaning $200.00
Dining $278.64
Home Depot $200.97
Kid stuff $173.60
Misc $663.22
Netflix $25.95
Preschool $380.00
Target $318.03
Trader Joe's $200.00
DH Clothing/haircut $50.00
Zetta Clothing/haircut $50.00

Total Income $7900
Total Savings $1300 (16%)
Total Needs $4125 (52%)
Total Wants $3150 (40%)
Shortfall $675

This doesn't account for the two extra paychecks (DH is paid biweekly) because it's easier to just stash the extra than to try and spread that income out over several months. We'll probably set it aside for the next trip to visit the in-laws overseas. I'm also assuming DH's withholding is correct and my pay until Oct will cover the estimated taxes for 2009 -- if not, they will come out of the emergency fund and get repaid when we get the refund.

Under Needs, the first place to cut is Groceries -- almost $500 for 3 people is crazy, I think there must be a lot of impulse purchases there (and produce that goes bad and is thrown away). I place Trader Joe's under Wants -- that's our fun food like favorite cereals, wine, good cheese. I hate to cut that out, but it's another $200.

Phone/DSL breaks down as follows:

Internet: $25
Local measured rate: $13
Plan + calls to Australia: $47

The need for a landline is driven by calling DH's parents in Australia. The local service is nice to have in case cell phone towers are down due to wildfires or earthquake. We could add international to our cell phones for $4 + taxes + $0.23/minute. Our current service is $7 + taxes + $0.09/minute. Last month we used 234 minutes. We use skype occasionally, but would actually rather talk on a phone than do the video calls. I should look into calling cards...

Most of the cuts need to come from Wants. I'm going to do my best to cut elsewhere so I can keep the cleaning lady! From our experience when DS was born, I know that Dining and Home Depot will go down on their own (no time to eat out or work in the garden), and that Target is likely to go up due to diapers and formula (I breast fed as much as I could produce but still had to supplement.) We're not going to do cloth diapers with twins, so don't even go there! Smile

Kid Stuff is clothing/haircuts for DS, fun classes (music, swimming, etc), toys, and small misc baby items (extra bib, pacifier, saftey latch etc).

The areas that always get me are Misc and Target. It's the impulse purchases that I really have to watch. $20 here and there really adds up. Our fun money also gets lumped into Misc -- a model rocket here, a massage there. Then there are those one-off but necessary purchases -- stamps, TurboTax filing fees, over-the-counter medicine, annual fee on a brokerage account. I wonder if splitting out these catagories would help us stick to them???

The other place this budget falls down is that I haven't set aside anything for Big Purchases. An example would be where we just spent $600 for a patio set. I should set aside a set amount and let it build up so that we have it available when we are wanting the next big item.

I guess I just really have to move from a tracking mode to a true budgeting mode. Set limits on the discretionary spending and stick to them.

Planning for twins

July 4th, 2009 at 08:41 am

We had the 18 week level 2 ultrasound this week, and I'm excited to announce that the babies are both girls! It was extremely cool to see the babies' hearts -- you could clearly see all four chambers and watch the valves moving as the heart pumped. They took measurements of all kinds of organs and bones, and so far everything looks healthy.

I'm really getting into the planning mode, both financially and otherwise. My due date is Nov 28, but on average twins come 3-4 weeks early so it will likely be early November. When I gave my boss the news, he was very complimentary about my work and said he was willing to hold my positon for 6 months or so. (I'm a software contractor for a tiny consulting firm, so there is no legal obligation to do so.) I've decided to take at least a year off, maybe more. I stayed home full time for 2 years after DS was born. I think I've made a good impression in the last two years and have an excellent chance of being rehired by him when I'm ready. I set a drop-dead date of quitting work by Oct 1 so that I won't have to work during the most uncomfortable part of the pregnancy, although I hope to start cutting back on hours sometime in September. With twins it's quite common to go on bedrest at some point, so plans could change at any time. While I could do my work while lying on the couch, it's not the most comfortable position for typing.

I woke up early this morning and wanted to do some budgeting, but can't get started until DH wakes up. Darn online paystubs! DH has gotten a small pay raise since the last time he printed one out for me, so I don't have the numbers I need to work with. Paycheckcity.com never seems to come out with the right numbers, but if he logs on to his work website they have a similar program that will calculate how your paycheck will change if you change your withholding and deductions.

It's going to be tough to figure out how much to change the W-4. We're paying estimated taxes this year, but I'll have at least 3 months less income, and we'll get deductions for two more children. DH's work gave large bonuses last year, but there will be none this year, so his income will be less as well. I have no idea what the dividends and capital gains will be like this year since the market is down -- it the past it's been as high as $30k, but for 2008 it was only $12k. Maybe I should consider asking an accountant to help us figure it out.

We have a four bedroom house, so in theory each kid could have his or her own room, but I'm strangely reluctant to turn the office into a bedroom. The wall adjoining the upstairs hallway is almost all windows -- french doors plus a third oversize window -- so it is very open and light. If it were a bedroom I'd have to cover them with blinds and it would feel much more closed up there. The closet isn't framed, and my desk currently sits in that space. I figure the twins can definitely share a room for the first couple of years, but eventually we're going to want a larger house.

The twins future room is currently a guest room with a queen bed. While the office is 10x10 and the bed could certainly fit in there, I think it would feel very crowded with the bookshelves, desk, printer, and other office stuff. (We don't have a basement, so storing the bed is not really an option.) Currently I'm thinking of keeping the queen bed in the twins room, but putting it flush against a corner. I need to take some measurements to see if two cribs will fit. DS didn't really play in his room until he was almost 3, so they won't need space for anything other than sleeping for awhile. Maybe the office can double as a playroom eventually.

To complicate matters, my inlaws will likely come visit from overseas for 3-4 weeks at Christmas, so I can't set up the twins room until after their visit. I'm planning on using a pack-n-play in our room for the first couple of months, plus temporarily putting a crib in the office for naps.

A local moms club organizes a swap meet twice a year to buy and sell used baby stuff. It's huge -- there are probably at least 100 stalls, and a couple thousand people attend. For about $150, I picked up a Pali crib with mattress (they run about $500 new), 2 bouncy seats, 2 swings, a baby bjorn, and enough baby toys, maternity clothes, and baby clothes to fill 3 grocery bags. I friend who has twins gave me her double nursing pillow and 3 HUGE tubs of maternity clothes that have been passed among her friends. A neighbor has offered a jumperoo and first pick of anything she is thinking of giving to goodwill. I joined a twins club, and someone was offering a free double snap-n-go stroller. So I've already saved a ton of money on equipment. I still need to get: 1 snap-n-go carseat, a pack-n-play with bassinet, and a double jogger. I may buy the pack-n-play new so that I can get the exact size that I want, and I'll get the jogger off Craig's List. I have my heart set on a Phil and Teds -- I've seen them used for about $300.

Although my fried was very generous with the maternity clothes, a lot of them don't fit or are very faded and stretched. Lots of size small, where I'm currently taking a medium and will need large (or even XL!) by the end. So I've splurged at the local Motherhood store and picked up a bunch of tops that have bright colors and patterns and fabric that feels really good. I stuck to sale items ($10-$20) except for one top, and even picked up a maternity jacket for only $10. I've probably spent about $250 altogether.

Many people on the twins forum I've joined recommend getting a night nanny once or twice a week because it is so tough the first few months. My mom lives about 5 minutes away. I'm extremely luck that she is so close, and is young and active and doesn't have to work. In the first few months, she's planning to come over every morning to help with the babies. She might even stay overnight sometimes so I can get more sleep. Night nannies run $25/hr in my area, so if we can avoid that expense it will be a huge savings!

I found a preschool that I like that offers an afternoon session, so I have switched DS there. At 3.5 years, he's ready to spend more time playing with other kids instead of with a nanny, so he's going half days five days a week. If I go on bedrest we can add mornings, too. They're very flexible with the scheduling. We'll just have to see how much preschool we can afford when I stop working, and how much time is right for him when the new babies are here.