In my house, we just celebrated a huge milestone. We made our final payment towards our daughter’s daycare. That’s $660 per month back into our budget. Or is it?
Due to our precarious financial situation over the last few years, my husband and I have fallen behind in some specific areas; namely, retirement savings, increasing our emergency fund and saving money for our daughter to go to college. Now that we have this money that’s not obligated towards a service, the logical step seems to be to divide that extra money into those areas (which would increase our current contributions made with money previously reserved for debt repayment). We’re already used to the money being spent so it’s not like we’d miss having it every month. But the more I think about it, the more I think that maybe that money could have some other uses.
Here are a few ways I think we can spend that money:
- School. Even though she’s no longer in daycare, my daughter will be in school. And along with school comes expenses. Clothes, class pictures, field trips, book fairs, teacher gifts, school supplies…a whole list of items to pay for. Perhaps it would be a good idea to set some of that $660 aside every month for these types of quasi-surprises. That way the money is there and we don’t have to scramble.
- Extracurricular activities. I am a huge supporter of extracurricular activities. I think they give kids a chance to enrich their education, meet kids from different schools, and apply their skills in other areas. As a result, my daughter is usually enrolled in 1-2 activities. Because we do most of them through our YMCA, they’re a lot less expensive. However, less expensive doesn’t mean free. Maybe some of that extra money can go towards paying for these activities and whatever “equipment” might come with them.
- Student loans. My husband still has student loans to pay off. Like a lot of student loans to pay off. We have a plan to pay them off before we turn 40 (we’re 34 and 35) but putting this money towards his loans would make the payoff that much quicker. This is probably the only debt we have that I resent (it’s a long, sordid tale) so the sooner we can get rid of it, the better.
- Add it into our monthly budget to pay bills. Right now, I’m on leave from my job and we’re not sure if I’m going to go back. If I don’t, we’re going to take a huge financial hit by losing my salary. Having that $660 per month in our budget to cover expenses will ease that burden and give us peace of mind.
- Do nothing and wait to see where we need it the most. This is probably what makes the most amount of sense to do but I am so crazy with allocating my money that to leave it there, without a purpose, makes me twitch. I feel like if it sits there, we’re going to spend it frivolously and then when we do need it, it’ll be gone. Which is a terrible, horrible, awful, no good, very bad feeling.
Then there’s the matter of private school tuition. Although we’ve signed Erica up for private school, we’re still debating if it’s the right choice, mainly due to financial reasons. Our feeder school isn’t as bad as it used to be and provided all goes well with selling our house, she’d only be there for one year. However, if we can opt for private school, that money we’re saving by not having daycare will most likely go towards tuition.
So. Many. Choices.
Since I’m a planner, I like to have every situation mapped out before I make a commitment to one thing. Figuring out what to do with this money is going to mean my husband and I need to have a long talk. And although we don’t fight about money, I’m a little nervous for this discussion (because we have completely different opinions on the whole school issue).
I’ll let you know how it turns out.
Good luck! Like you, I definitely hate leaving money unallocated. Right now, there is some money left over to put into savings and I can’t do that until I get paid next, because what if I oversave and have to go into overdraft? Lol. It’s driving me crazy just sitting there.
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“This is probably what makes the most amount of sense to do but I am so crazy with allocating my money that to leave it there, without a purpose, makes me twitch.”
I actually disagree, or at least I know it wouldn’t be good option for me. If $660 got added to my checking account it would be GONE and I’d have no records of it. I have to keep my checking account low just so I don’t go spending it.
If you are a planner why not plan? Use $200 for x, $200 for Y, $200 for Z and then let that last 60 be eaten by the checking account monster?
It is so exciting, but I know exactly how you feel. I always get overwhelmed with extra money. What to do! What to do! There are so many options. I am sure you guys will find a balance, good luck!
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I agree with you and Evan. I wouldn’t want to let the money sit in my checking account unallocated either. It’s just too risky that it’ll end up getting spent and later on not even know what it was spent it on. Maybe the best thing you can do is sit down with your husband with this list and each choose your highest priorities, and then split the amount between each of them. That way you both can feel like you are allocating some of this extra money to the place you feel needs it the most.
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I love the new look!
As for the money – have a plan. We stopped paying daycare two years ago, and the money went into “general revenue”, which was a bad idea. Now it just gets sucked up by life.
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I cannot even fathom $660 a month for daycare. I had my own business when my babies were little so I had part-time daycare. I did a lot with them in tow. That said, I am a planner. Money will disappear if not put somewhere. If the interest on the student loans is not a help in the tax dept. I would either pay that off or put part away for a family memory trip. Kids grow up so fast. By 10 or 11 they won’t even want to be seen with you. I agree in kids activities, but family outings are memories you can’t go back and get.
Thanks for sharing this blog! An opinion, for what it’s worth: I have taught in both public and private/parochial schools in the past five years. I loved both and saw the benefits of both. While teaching in a Catholic elementary school, I had an easier time planning “big” field trips because parents were, for the most part, willing to foot the expense. There were behavior issues, but I would say to a lesser extent given the fact that a student could be expelled without the pomp and circumstance a public school system is required to go through legally.
WITH THAT SAID, my neighbor recently approached me for some advice. He explained that he is under water on most of his bills and doesn’t know how he’s going to pay for his daughters’ parochial school this upcoming school year. I got the gist of where the conversation was heading pretty quickly. He didn’t want to admit it, but he had reservations about public school—and he knows that I teach in the district where we live. I explained that I am, of course, very biased as a teacher in said district, but in all honesty, I see so many benefits to public education. 1) Your tax dollars are going to support your district whether you send your kiddo there or not. 2) Public schools receive a lot of federal grant money, which allows them to hire more Title I reading teachers and special education intervention specialists. And you really can’t appreciate the value of this until your child needs the extra attention. These folks are amazing. 3) Every district in the US that receives federal money (as I’m betting yours probably does) is required to adhere to strict guidelines that ensure students are making adequately yearly progress. Of course there is a debate that this lends to “teaching to the test”, but it might be too broad an assumption to decide that is -all- your child’s school is doing. (For me, test prep is one piece of the entire puzzle.) What’s more, if your family qualifies due to income threshold, your child may qualify for things like free and reduced lunches as well as assistance with school fees and supplies. 4) In my opinion, a child’s education is as good as the support they have from their families. It’s obvious that you will play an active role in seeking out enrichment opportunities for your child and with the money you’d save from tuition, you’ll have an easier time providing for these experiences.
I am biased. While I absolutely loved teaching in a parochial school, I believe in public schools, too. And as was the case for my neighbor and so many families, public education makes a lot of financial sense.
Best wishes! 🙂