In this week’s reader mailbag, we’re talking about families, particularly financial issues involving children and parents. This is a topic near and dear to me as a member of the “sandwich generation,” meaning that I simultaneously have young children at home as well as parents and in-laws who are already retired. Most of the questions in this mailbag deal with those challenges.
1. How much should we save for having kids?
2. Caring for a parent without retirement
3. Managing kids’ virtual learning while working
4. Saving for college without stocks
5. Setting “rent” for in-laws
6. Making inexpensive school lunches at home
7. Kindle Unlimited for daughter
8. First pet for a child
9. Cleaning out parent’s stuff
10. Returning to a job after a year
11. Cheap healthy kid-friendly food
I’m 29, my wife is 26. We have been planning on having kids in our early 30s and decided a couple of years ago to get our finances straight. We are trying to decide how financially stable we should be before having kids. Is there a net worth level we should be aiming for, or some other measurement?
My experience with the finances of parenthood is that the most important thing you should build before having kids is a healthy cash flow. You should be spending significantly less than you earn before you have kids, on the order of spending 70% or less of your income on living expenses, monthly bills, and minimum payments on debt. That other 30% should be used for something wise, whether it’s extra debt payments, saving for retirement, building an emergency fund or saving for a down payment.
If you’re finding it difficult to make ends meet now before having kids (and all of the extra expenses they bring), it’s going to be doubly hard when you’re dealing with all of the costs that a baby introduces — child care, diapers, clothes and food. If you both continue to work, child care is going to be a big cost. If one of you stays home, that’s going to be a huge salary hit (recouped by being able to lean more into eating at home).
I would try to aim for spending below 70% of your monthly income. I think, if you’re doing that, you’ll be able to weather having a child pretty well. Aim to get that number lower if you can by paying down debts, as the lower your required monthly bills, the better.
What are my options for caring for a parent with no home or retirement savings? My parent has a small quantity of money coming in from the Australian old age pension but it is not enough to cover rent, transport and food.
I am considering borrowing to buy a positively derelict home for him to live in while I live in low-cost shared accommodation elsewhere. He would enjoy fixing it up (saving me money, improving the asset and giving him a hobby) and I could live there or rent it in the future when he no longer needs it.
Is this situation, where my money goes towards getting myself an asset and cover my father’s housing costs, my best option? Is borrowing to invest in something I will not live in prudent? According to The Economist and some newspapers, there is a housing bubble so the home and land may not increase in value over time.
What other ways can I multitask with the money I will continually spend on my father?
I want to be perfectly clear that caring for my father is the highest priority. I just want to do it in a way that doesn’t bankrupt my own future after he passes.
If you can handle it in terms of personality, your best option that offers the lowest risk of leaving your father in a bad situation and also ensuring that you don’t struggle financially after he passes is to live in the same home together. Have him move in with you, install him in a spare bedroom, and work out an arrangement where some portion of his pension goes to covering part of the mortgage and utilities and food on your current home. You might want to consider an arrangement where he just gives you $X per month out of that pension and then you handle all of the bills and food costs (except when he dines out, that’s on him).
You could perhaps employ him in some way to do improvement projects on the home you currently live in, depending on his ability. See if he will handle some landscaping and lawn care or redoing a bathroom — things like that will keep him busy and also improve the value of the home you’re sharing.
I would be hesitant to buy him a fixer-upper unless I was extremely confident of his ability to handle all of the fixing that the home would require. Otherwise, that fixer-upper would quickly become a money pit in the middle of a housing bubble, which isn’t going to turn out well financially for you. Without knowing your father, I cannot assess his ability or health, simply that he is single and of retirement age.
In March, our school district closed their doors for the year, froze grades, and just essentially passed all students to the next grade. My job also moved to work from home (I am a single parent). In a few weeks, our school district is launching all online teaching for the foreseeable future. This is great, except that during the time that I’m working, they’re also doing schoolwork. I have no idea how I am going to keep my two boys on task and focused while working without hiring someone to do it and I don’t think I can afford that. Do you have any suggestions?
The first thing I’d do is try to identify one or two other families in your district that are in a similar situation and are practicing social distancing similar to how you’re doing it and form a “learning pod” with them. Essentially, you work out a schedule where, on a rotating basis, each family hosts learning for the day.
Let’s say you’re doing this with one other family. On Mondays and Wednesdays, you might host, while on Tuesdays and Thursdays they host, and you alternate Fridays. With two families, you might just host every third day.
Then, talk to your supervisor at work and explain the situation. Explain that you can do your work in the evenings on the days when you’re hosting and completely as normal — without kids around — on the other days. In other words, most of your productivity would be jammed into the days when the kids are being hosted by other families.
The point is this: there are ways to do this without hiring someone to watch your kids and make sure they’re learning, without much more COVID risk than having someone come to your home each day to watch them learn. Your kids would be exposed to a very small number of additional kids and parents, probably in the single digits, with this plan.
Several families in our area have worked out arrangements like this. For me, my plan is to start rising very early to do more intense work early in the morning, then do lighter work during the day while I’m managing their learning. That may be an approach that works for you as well, depending on your job.
I am very afraid of economic disaster in the latter half of this year as people start losing unemployment benefits and there’s no work. I think a bunch of industries are going to take a huge hit and that’s going to ripple through every industry and stocks are going to fall rapidly until there’s a vaccine. I want to know what I can do to protect my children’s 529 savings. I have about $24,000 combined amongst my children, invested in target education funds.
One thing you can do is move all of that money out of target education funds and into a money market fund for the time being. Essentially, you just move all of it into cash.
The benefit of this is that, if stocks do fall rapidly, you’re not going to lose any money. The drawback of this is that, no matter what, you’re not getting much investment growth, probably not even enough to keep up with inflation, and if stocks keep their general positive direction, you miss out on that growth.
What you’re essentially trying to do here is time the market. If you sell stock at the peak and buy it at the bottom, you’ll do well, but if you miss either the peak or the bottom by very much, you will end up in worse shape than if you’d done nothing at all. This is explained in Burton Malkiel’s wonderful book A Random Walk Down Wall Street.
My advice? Don’t time the market. Leave your investments alone. If you genuinely feel like there is too much risk in your current investment strategy for you to tolerate — and you might be in that situation — move to something less risky, like municipal bonds or cash. You won’t get good returns, but you also won’t have the risk of big drops, either, and you can plan ahead better. You’ll probably want to bump up your contributions a little, but you’ll be very likely to get to your savings goal as there is much less investment risk.
[Read: How a 529 Plan Works]
My wife and I currently live on 1.2 acres on the very edge of the city. Our property came with a small one-bedroom cottage on it that the previous owners built. My in-laws are in declining health and my mother-in-law may be suffering from early dementia. We are considering having them live there for a few years rather than having them go into a retirement home, and they’re willing to do so. What we are struggling with is the question of whether to charge them rent or not, and how we even bring up that topic. Surprisingly, my wife is the one who thinks that they should not live there for free.
What does your wife think they would do if you just let them move in with no discussion of rent? Would they choose to not pay you at all? Would they just expect to live there rent-free? Or is this a topic that they would bring up on their own out of a sense of obligation?
Your wife may have a sense that her parents would just expect to live there without contributing anything to the household. I actually don’t think that’s a healthy route for anyone involved, assuming that they’re bringing in any income at all, and if they’re Americans, they’re likely at least getting Social Security. That doesn’t mean that they should be paying for the full cost of the cottage and all of the utilities (I assume that the utilities are all just bundled with the main house), but that they should be contributing something to the equation. Not only does it create an extra financial burden on you, but there’s also the issue of them putting value on what you’re giving them. If you’re just giving them a lot over time with no reciprocation, there can eventually be a strong feeling that you’re being taken advantage of. There’s also the issue of ownership and involvement from the side of your in-laws; they likely want to feel like they’re contributing.
I think what I would do is sit down with them and do a full walkthrough of their finances so that you understand what they can actually afford while still having control over most of their money, and come to a simple rental agreement that covers living in the house and utilities. I would have the price be quite low, but enough so that they feel involved and contributing without feeling strapped and you don’t feel like you’re being taken advantage of. Talk that amount over with your wife first, and be flexible about it.
We are sending our children back to school next month but we don’t feel comfortable with the lunchroom environment. The teachers are allowing kids to eat in classrooms if they bring their own lunches so we are going to be packing lunches for our kids. Do you have any suggestions on how to do this frugally? I’ve read some articles on it but am looking for frugal options.
This might be a standalone article in the future as I’ve already heard a few questions like it. We have sent lunches for our children in the past many times. Here’s how we do it to keep it as easy as possible and low cost.
The first thing we did when we made school lunches frequently was that we made a menu each week of a bunch of options and had the kids each choose what they wanted in their lunches. The first one was protein and included things like a couple of different sandwich options, hummus with pita bread, hard-boiled eggs, and cheese and meat kabobs. We had a vegetable choice — various kinds of cut-up vegetables. We had a fruit choice with various kinds of fruits, like an apple or some grapes. We also had a snack option, something they could either eat with lunch or pull out later, like yogurt, applesauce, a few chips or string cheese. I would surprise them each day with a dessert, a bottled drink and usually a little note in their lunch box.
So, each week, we’d have the kids pick lunches. For Monday, one kid would choose the menu, and that’s the lunch all kids would have. For Tuesday, the next kid could choose, and so on. There wasn’t anything on the menu that anyone actively hated, so if you have really picky eaters, this might not work. The only rule we had is that you couldn’t repeat a choice from earlier in the week. One day lunch might be cheese-and-cold-cut kabobs, broccoli, grapes and chips. Then the next day, lunch might be hummus and pita bread, baby carrots, an apple and string cheese. (I also tossed in a drink and a dessert and a note to each meal, remember, but I chose those.)
Each evening, I’d prep their lunches. We used a bunch of resealable containers for this, and I’d just make three copies of whatever that day’s meal choices were. The resealable containers all fit in their lunch bags and I’d just pop them in the fridge. The next morning, I’d put an ice pack in each one and send them on their way.
The food containers meant that I never had to buy individually packaged stuff, as I could just buy big containers and split them up into smaller individual reusable containers. By using the grocery store flyer and trying to include menu items that were on sale, I was able to use a lot of on-sale items for their lunch. Having each kid have the same exact meal made things much easier, too.
I highly recommend having reusable lunch bags, reusable containers, ice packs, and it’s great if the lunch bags are dishwasher safe. Having some redundancy in these is good, too. You’ll blow through disposable items like there’s no tomorrow, and having standardized containers makes it really easy to know what will fit.
This seems complicated, but approach it like a routine. On the weekend, have the kids figure out their lunch plans and do the shopping. Each evening, prepare identical meals for each kid and pop them in the fridge. Each morning, pop an ice pack in each bag. After school, wash everything. That’s really it.
My 11-year-old daughter reads constantly. She gets books from the library every week. I’m considering getting her a Kindle and a year of Kindle Unlimited for her birthday. Is it a good deal?
I think it would be, but it depends a lot on what your daughter likes to read. If she’s varied in her tastes, it’s probably a good deal. If she sticks strongly to one particular genre or group of authors, you’ll want to make sure they’re on Kindle Unlimited.
For those unaware, Kindle Unlimited is a subscription program from Amazon that’s basically “Netflix for books.” For $10 a month, you get access to a pretty large library of e-books that you can read entirely at your own convenience. That library has a lot of things (more than a million titles), but it doesn’t have everything.
If your daughter doesn’t have a Kindle device or a tablet, she’ll definitely want one to really do this. I would not get her a Kindle Fire tablet (I think they’re pretty mediocre tablets) and just get her a devoted Kindle device, which is designed just for reading books. I’d rather have a great e-reader than a mediocre tablet. I’d suggest a current-generation Kindle Paperwhite without ads — you don’t save much by getting the one with ads on it. It currently comes with 3 free months of Kindle Unlimited on it, so then you could just tack on the rest of the months.
It’s a pretty good gift for someone who hits the library each week, I think.
Do you have any suggestions for an inexpensive first pet for my 7-year-old? He wants a dog but I don’t want to take care of one. I want him to learn some responsibility and what it means to take care of one without it being a bunch of work or money.
My suggestion is a guinea pig. My daughter has two of them and they were incredibly helpful for her in learning how to be responsible for taking care of a pet. She absolutely loves the little guys; although she has a cage for them in her room, she often carries them around in the pocket of her hoodies around the house.
You don’t need a whole lot to care for a guinea pig. They need a spacious cage, a place to hide in that cage, some litter, a water bottle, some straw or hay and kibble-like food. They don’t eat too much, either, so the ongoing cost isn’t much. (Plus, any time you eat anything green at the dinner table, like kale or broccoli, your son can take a treat to his pet.) Your initial cost will be just getting the pig, cage, a water bottle and the initial food and litter, which isn’t too bad.
You’ll want to encourage your son to get in the habit of a daily routine of care. They’re really easy to care for — it’s mostly just refilling the water bottle and giving them some food, with occasional cleaning of the litter. Most guinea pigs are pretty scared of people at first, but tend to warm up to a person that they see consistently, so it’s encouragement for him to spend time with the guinea pig. My daughter’s guinea pigs actually start squealing whenever she comes into her room and they see her, and she reports that they usually start squealing when she first wakes up in the morning (I suspect they forget she’s there and then when she wakes up they see her and are excited). It’s also a good trial run for a dog or a cat — if your son is responsible with the guinea pig, then he may be ready to eventually take that next step.
My mother passed away in early April after a long battle with cancer. We have just left her house untouched since then as we haven’t felt up to tackling it, but it needs to be done. We need to empty it out and get it ready to sell. All possessions in the house belong to me and my wife. A few questions. Do we need an appraiser? What about an estate auction? How do we know what we need? I feel lost. I have read a bunch of guides online but they’re just lists of things to do.
I’m assuming the will has already been fully handled, all important documents are already out of the house, and you just need to clean it out.
What I would do is set aside a weekend and rent a dumpster, then just go through everything in the house quickly. The deadline for that dumpster creates a firm deadline for you, so you’ll want to get it done ASAP. Put aside anything that you think might have much resale value and anything personal you want to keep. Don’t keep stuff that you’d just stow in a box and never look at again — you can take some pictures of that and then move on. Everything else should go in the dumpster. Just trust your gut on this.
An appraiser is only useful if you’re coming across collectibles or art pieces that might have significant value. If your mother didn’t have anything like that, an appraiser isn’t worthwhile.
For the rest of the stuff, you can sell off things you think you can sell yourself individually, but there’s nothing wrong with contacting a business that does estate auctions or estate liquidation and letting them take care of it for a fee or commission. It will save you an enormous amount of time.
If this is going to be emotionally hard for you, ask some friends to help with the big clean-out. You can focus on just looking for sentimental things and then trust them to get rid of junk and put aside things that might have value for you.
After that, you’ll just have an empty house to sell.
After hearing our school district’s return to learn plan we decided to homeschool. Actually we more or less already decided that. My wife decided to quit her job to do this and will be done on the 14th. She was a personal banker at a bank in town mostly setting up new customers. It’s actually not too bad financially since we now have no child care costs. We have a kindergartener, a 2nd grader, and a 4th grader.
Our intent is to send them back to school next year provided there is a vaccine and it seems safe again.
Her old job obviously won’t be there in a year. She liked her job but it was one of those “foot in the door from a friend” kind of deals. What can she do to help her get that kind of job again when this is over?
I think this is a situation where the longer she’s out of the field, the harder it will be to get back into it. If she goes back in a year and has good references from her old job, it shouldn’t be too hard to find another job in banking in your community, provided you live in a fairly large area with a lot of banks. If she doesn’t go back for several years, however, her skill set will probably be seen as outdated and her old experience won’t matter much.
If this ends up looking like a multi-year thing, I would see if you can afford some supplemental education for her during the summers or evenings where she could work toward a finance or accounting degree (if she doesn’t have one) or even an MBA. Some sort of additional effort towards staying in touch with the field should be vital. She should also stay in contact with people she used to work with at the bank, as that could still be a route back to working there.
What healthy food is there for cheap that kids would like? I don’t want boxed junk.
In your shoes, what I would do is go through my recent article offering 25 options for cheap, healthy, and delicious food and simply try various things with each of them with your kids to find things that they like. If it’s a cheap meal they don’t like, it’s not a big deal — it wasn’t expensive and it was a one-time thing. If it’s a cheap meal they really liked, then you have something to go back to.
As you start through that process, try to mix in some meals that they do like. With my own kids, I find that they’re pretty open to trying new things provided that there are some good, familiar things that they like that also pop up on a regular basis.
If you want a good set of inexpensive recipes that kids might enjoy, I strongly recommend Good and Cheap: Eat Well on $4 a Day by Leanne Brown, which is available at that link as a free PDF. That offers a lot of specific inexpensive recipes. Try using many of those in your mix of recipes ± try one new thing to see if they like it (it’s cheap, after all) mixed in with a couple of other meals that week that are familiar. Keep the ones they like and chuck the ones they don’t.
Got any questions? The best way to ask is to follow me on Facebook and ask questions directly there. I’ll attempt to answer them in a future mailbag (which, by way of full disclosure, may also get re-posted on other websites that pick up my blog). However, I do receive many, many questions per week, so I may not necessarily be able to answer yours.