Coach’s Response:

I’ll address the last four words of your question first: “still have a life.” You may think I’m kidding, but there’s no way to imagine beforehand how much life will change when Baby arrives. People often try to do comparisons to life after and before (less sleep, less going out, no alone time, balanced by the joy of the new addition to the family). But really it’s just completely different. Life without Baby will become Life with Baby. Your priorities and expectations will shift daily.

In all seriousness, there are options to make childcare more affordable – or to streamline other parts of your life so you still have adequate cash flow. It’s good you and your husband are talking about this now so you can set some priorities together and keep the conversation going as things change. This would be a great time to set up a session with your financial coach. You and your husband can be on the call together, and your coach can help you set priorities and explore options.

Assuming you both want to keep working full time and that your careers are a priority, here are some quick ideas about making sure childcare expenses don’t overwhelm you:

• Tax options: If one or both of your employers offers a dependent care Flexible Spending Account (FSA) you and your husband can set aside pretax dollars to pay for qualified dependent care expenses. This is like getting a discount on daycare because you don’t pay taxes on the money you set aside (up to $5,000, if both spouses are working), giving you greater spending power. There are requirements and limitations, so make sure you understand the details.
• Our EAP (Employee Assistance Program) website has a good deal of reading material on this topic, much of it on considering your priorities. Here are instructions:
  How To Access EAP Online
  1. Enter this address in your Web browser: www.eapbda.com
  2. Enter standard6 as the login ID (in all lowercase letters) when prompted.
  3. Enter eap4u6 as the password (in all lowercase letters) when prompted.

  Note: It is a violation of your company’s contract to share this information with individuals who are not eligible for this service.

• Leverage your social networks: Your neighborhood probably has other young or expectant families in the same situation as you. Look for a local “moms” (and stay-at-home dads) Facebook group or connect to families through friends, church, or through parent groups at your local elementary school. You’ll find options such as nanny-shares where two or more families share nanny expenses – and you’ll get plenty of feedback and advice on other potential options.
• Create a detailed, evolving spending plan: Document and review where your money goes – a good project to work on with your coach. Then, with your priorities in mind, make sure your money is going where it creates the most value for you and your husband. Will you be eating out less once Baby arrives? Could long walks with Baby in the stroller replace a gym membership fee, at least for a few months? Do you need cable or a Netflix subscription if you’re too tired to stay up and watch anything after Baby goes to bed? Think creatively. Also revisit your spending plan every few months with your current priorities in mind.

Some other major questions to consider:
Some young families decide having both partners working full time isn’t, in fact, worth it. This is a major decision, obviously, and not one to be taken without fully considering the long-term implications. A few points to think about:

• Am I considering all costs associated with working? For example, could we get rid of a car (and all its associated costs – gas, insurance, maintenance, etc.) if only one of us had to get to work?
• What would the long-term impact on my career be if I left the workforce for a few years? Could I pick up where I left off, or would I need to essentially start over?
• Does one of our jobs have a more promising long-term career path than the other?
• Having only one partner working is more risky. What would we do if the working partner lost his or her job?
• Does one of us have the option to go part time? Could we reduce childcare expenses that way?
• Do we have the option to work staggered shifts? Or can one or both of us work from home a day or two per week?

A lot to consider, I know. But it doesn’t have to be overwhelming. You are far from alone in facing this challenge. Your financial coach and other families in your situation can help you talk through your priorities, point you to helpful resources, and offer meaningful guidance.

Dear Bride-to-Be:

You’ve taken an important first step towards successful saving by having a goal in mind. It’s a lot easier to save when you know you have something to save for. You also have a time frame in mind, another plus to start with. Having a defined amount of time to reach your goal is a great motivating factor. It also helps you determine how much you need to regularly set aside to reach your savings goal. And if your goal is reasonable and achievable for the kind of honeymoon you have in mind.

To begin saving, review your monthly budget. If you don’t have one yet, now’s a good time to start one. And, your financial wellbeing coach can help you with that if you need it. The point is, your budget helps you determine how much you can save. We all have bills to pay. So, what are they? And then how much is left to work with, for saving? Once you determine how much you want to save and can save, pay yourself first. Just like a regular monthly bill. Your honeymoon bill, right? And then stick to it. The easiest way to save money is to never have the chance to spend it in the first place.

If you have direct deposit of your paycheck through work, see if you can have part of it go directly into another account — your honeymoon savings account — as well. If not, deposit that amount manually each month.

At first, saving can seem difficult, discouraging, daunting. But no matter what your financial situation is, it’s always possible to begin saving. Then, when you see your savings grow and keep growing, it feels awesome, empowering. Like something you’ll likely want to keep doing and doing more of.

And remember, you don’t have to be alone in this process. As a MoneySteps Financial Wellbeing Coach I’m here and my colleagues are here to help you achieve your money goals, no matter what they are. Congratulations on your wedding! And good luck saving!

Dear Nearing Retirement Age:

It’s exciting, and perhaps even a little scary, to see the dream of retirement just a short five years away. You ask a great question about owning or renting, regardless of your life stage!

Nearing retirement age means being able to visualize what your lifestyle may look like with greater certainty than doing so earlier in life. Maybe your dreams of long walks on the beach and daily rounds of golf from earlier years have been replaced by the joy of spending more time with grandkids or volunteering for a local organization. With a clearer sense of your retirement lifestyle, it’s easier to understand what your needed living expenses will be.

But it’s important to understand the income side of the retirement equation first. Here, you want to estimate your household income from a variety of sources including: social security, 401K plans, pension plans, IRAs/Roth IRAs, and other investments. You’ll receive monthly income from social security, the amount of which will vary by the age at which you decide to start collecting (the longer you wait the more you’ll get). A pension plan will also typically distribute benefits on a monthly basis.

However, your “investment accounts” represent lump sums that you will draw down with a frequency you’re comfortable with (annually, monthly, etc.). Once you make a withdrawal, your remaining principal will be impacted by how the money is invested, assuming it’s not all in a cash account. There are many tools at your disposal, both on the financialwellbeing.com and Fidelity websites that will help you model out different scenarios for what your income may be from all sources.

On the expense side of the equation, it’s really helpful to project your retirement expenses if you have a really good handle on your current expenses. If you don’t, perhaps it’s something you may want to consider. When your spending plan or budget is organized by category, it’s easy to ask yourself “will this expense be less, more, or the same in retirement”? Perhaps you and your spouse both have cars you use to drive to work. If you will be driving less in retirement, then your gas, insurance, and maintenance costs will all go down. You may even decide that you no longer need two cars.

So once you’ve isolated your expenses today, and made some assumptions about what they will look like in the future, I think it’s logical to delve into the housing question. Here are some things to consider: where do you want to live? Downtown condo lifestyle with many attractions in walking distance? Or a cottage in the woods to enjoy nature? What does it cost in your dream scenario to buy a residence? How much money will you have for a down payment? Perhaps you may even have enough to buy the property outright, without a mortgage. But if there is a mortgage, how does the cost of your current rent compare with your mortgage payment, taxes, and insurance? Will you have enough income in retirement for this expense after estimating how your other expenses may change?

Yes, there are many questions to consider — but the good news is you don’t have to decide today on owning or renting. Take your time to consider all your possibilities and think about getting the assistance of your financial coach in thinking through your options, and taking these big life decisions and turning them into smaller, more manageable decisions that get you closer to the plans that work best for you and your spouse.