The time has finally come. Our little girl is growing up and is entering kindergarten this Sept. While I am feeling many emotions ranging from fear of the unknown to happiness that my daughter is growing up, I also feel a bit of excitement that we’ll be seeing a very large expense reduced. For the last couple years we have been paying over $800 per month for daycare. We wanted the best daycare that we could get after having had my wife stay home for the first three years. I think that we chose the facility that we did because it had a very good reputation and it helped us emotionally send our daughter off to strangers after having sheltered her all of her short life. It turned out to be worth every penny and the experience has drastically helped our daughter improve her social skills and she is already reading at the 2nd grade level.
We won’t see a full $800 per month increase in our budget because we have opted to put our daughter in the "all day" kindergarten program which costs us $225 per month. Additionally we will also have to pay a daycare near the elementary school for a couple hours a day. Total cost will be about $400 per month for both kindergarten and daycare.
So, we’ll be saving a full $400 per month in our budget which we’ll use to increase our daughter’s 529 monthly contributions as well as increase our ROTH ira contributions. It didn’t seem to make a lot of sense to us to just pull that money back in to the budget and leave it unaccounted for. If we don’t align it to investments or savings we’ll be much more likely to spend it.
Oh dear, we’ve been fearing the exact opposite of this. We currently spend over $1000/mo for the CHEAPEST daycare in town, and now we’re going to have to figure out a way to squeeze another grand per month out of the budget for a 2nd child. Very stressful…
Yeah, we thought long and hard about how many kids we wanted to have. I joked that my wife and I were in contract negotiations on having another. In the end we agreed to just have one. My personality probably would have been too stressed out worrying about money with two kids, although everyone else seems to be able to cope. I guess you do what you need to do. Good luck on the extra daycare costs.