Someone tell me it will all be fine

brij2006 · January 2017

So the situation at my job is turning worse even quicker. In a meeting this morning the boss' son (pretty much new boss) hinted that he's glad we're under 50 employees because then we don't have to recognize certain laws and regulations.
Well I'm taking maternity leave beginning in June. I sent an e-mail to him and my other boss (there are 3) in December to let them know I plan to take the full 12 weeks of leave. Same as I did with DD. I didn't receive anything back confirming this from either of them. This is really making me concerned since FMLA technically doesn't protect me here.
Well we planned for me to come home anyways, but I was wanting to work until I had baby so it would be born on my better insurance plan and cost us significantly less out of pocket. Now with a lot of the changes in management and lack of family oriented company, we're pretty certain I'll be putting in my notice when we get back from vacation on the 13th. But if they technically could remove me from the group plan on my last day of employment, I'd be having baby on H's plan anyways. Unfortunately the way things have turned, they would do this and I don't doubt it for one second that I'd receive a termination of coverage letter effective on my last day of employment.

Okay, so here's where I am scared. We'll be losing my income. Now that things are getting more real, I'm getting more scared. When I try to talk with friends or parents about this they just tell us that we'll figure it out. My H doesn't make a ton of money, but he does okay. Especially for our rural area. But our budget is insanely tight without my income. I'm just looking at things from this month alone and we had $400 in medical expenses and $700 in car repairs. My income covered those. Losing that, we wouldn't be able to cash flow those.
Maybe I just need to be talked off my rocker, but I need to hear it from MM people. It's easy for friends who don't manage their money, to tell me we'll figure it out and if we don't contribute to retirement for a few years then it's no big deal. Um, yeah, it is a big deal if we don't.
How do I just pull the plug and have some faith? Our budget has about $300/month of wiggle room. That's it. And that's living pretty bare bones. We'll be living more frugally than we did when we were getting out of debt. We have sold 1 extra vehicle and could sell another one that would free up about another $50/month. I've also shopped our insurances and found an option that would save us an additional $50/month. But other than those things, I'm not sure where else we could cut.
It's just hard because we follow Dave Ramsey's principals and are on baby step 7. Which is amazing and what is even making it possible for me to have the option to decide to come home. I'm very grateful and thankful to be in the position for us to choose to have me come home for a few years. But part of that is living and giving like nobody else. I feel like we're giving up our "living" like nobody else. We have eating out down to $100/month, entertainment to $75/month, if we sell the other vehicle to give us an additional $50/month, that's part of our living and fun that we enjoy. We'll most likely not put up/open our pool this summer as to save about $300 in parts/repairs it needs plus the cost to fill and maintain it.
Thankfully my H does get overtime, but this budget is based on his typical month of income. He said he can grab Saturday's here and there to make some extra cash and cushion things a bit more. But he already works 50-60 hours/week minimum as it is. The only thing that isn't accounted for are the 3 months/year he receives an extra paycheck. So that will be a decent buffer those months or we can use them to put aside for larger expenses.

Thanks for reading my novel.

julieanne912 · January 2017

OK take a deep breath. I think you are in a wayyy better spot than most people are. I know it's super scary, but things will be fine. You have tons in savings (wayyyyyyy more than most people your age with a young family), no debt, and if it truly does become a hardship, then you can always go back to work. Maybe not at that same job, but you will figure something out. After the baby arrives, maybe you can find a way to make a bit of income on the side working from home or something. I know my parents figured out how to make it work on a $12,000/year income, WITH a mortgage and my dad being self employed.... that was in the 80s, but still. If the car broke down and they didn't have the money to fix it, we either wouldn't go anywhere, or we'd walk. As a kid, I didn't even notice, I just thought we were going on a walk to the grocery store

I freak out about this on a daily basis since we are now TTC, and while we have a much larger income than you guys, we have way more debt, and we cannot afford for me to stay at home because of that debt. You guys worked hard to prepare for this and are truly blessed to be able to even have this as an option, even if it's going to be really tight for awhile.

AprilZ81 · January 2017

Is there a reason you are quitting now instead of waiting? I get that your new boss is an ass but if you are that worried I would keep working until after the baby is born.

Staying at home is a decision but maybe it isn't the decision for your family? If you are this stressed out about a tight budget and are feeling a little resentment that after all of your hard work you can't "live like no one else" then something has to give.

You either need to reduce your tithing/retirement a bit, you need to work, or you need to accept the lower and tighter budget. With your husband working such long hours I don't think him picking up more hours is the answer, he deserves time home with his family that he is working so hard to support. If he works more hours he will miss so much of your kids growing-up years so that you can stay home. If you are both okay with that fine, but it seems unfair to me.

Try to look on the bright side. You guys are DEBT FREE. If anyone can make this work it will be you guys but you need to be comfortable with all aspects of what living without your income will mean.

abrewer5 · January 2017

I'm sorry to hear about your job situation turning worse.

You guys will be fine because you're definitely prepared for this. You have no debt, you have an e-fund, you have a budget that you're really good at sticking to, and you aren't planning on it being forever. I think it's normal to be anxious before making a huge change like this.

I will say it would be hard for me to go that barebones, but there is a reason I have debt and you guys don't. If for some reason it doesn't work out is there any way you could work somewhere part time? Or maybe watch someone's child a few days a week to increase your income streams?

I do agree with others, you will figure it out. It may be hard at first but you'll adjust as needed.

als1982 · January 2017

You can totally make it work. With no mortgage and a healthy emergency fund, if you need to find a few more dollars every month, you have the motivation and the mindset to hustle to find it. Truly, over the last year I've discovered there are so many ways to make extra cash. You can flip clothes or cars (which I know you're already doing), take surveys or even do micro gig jobs at your local Walmart. There's no shame in these things. I do them with minimal effort and make at least $100-$200 a month. You could easily pull in more if you invested more time into it.

hoffse · January 2017

So one of my questions involves the inheritance you received from your brother. I know a lot is tied up in farmland, but IIRC you guys had some cash and investments too, right? I think the last time you posted about it the consensus was to set it aside and let it sit while figuring things out.

Depending on what is left there you guys should be able to supplement your income without dipping into the principle if it's invested correctly. I have a retirement calculator coded into an excel sheet I use, and with our current investments H and I could retire today if we could live on $425/month. That assumes a 3% withdrawal rate, which is conservative enough to last forever, based on historical performance.

Obviously $425/month is not enough for us at this point, but it's just an example. We can generate that with only $170K invested, and IIRC you guys have a much more robust portfolio than we do.

To be clear, I'm not saying drain your retirement, I'm saying you might want to read up on FIRE (financial independence/retire early) to see what sustainable level of draw your assets can withstand, at least as a way to supplement your H's income when needed. With $300 of wiggle room I would not take a draw unless we needed it, but I would be sure to know my desired monthly ceiling (that $300) and the actual monthly ceiling ($300+investment draw) to plan all of this.

Here is some reading for you:

https://www.bogleheads.org/wiki/Withdrawal_methods

I think with small kids and a single income I would also keep a 6-month emergency fund + 1 year of medical deductibles on hand in cash.

Also, I would be open to some work from home opportunities, again as a way to supplement now and then. You will need to be able to afford a hobby that's just yours and/or the occasional date night/vacation, if only to preserve your mental health and marriage.

The last thing I would do is open a HELOC on your house. I know how you guys feel about debt, but after closing costs you don't pay anything to keep it around, and you only have debt if you make a draw on it. It can be a source of last-resort cash for you guys if shit hits the fan one day. And if shit ever does hit the fan and you do have to use debt again at some point to stay afloat, please do not feel like a failure or like you should have made a different decision when it comes to staying home.

vlagrl35 · January 2017

I would wait until it was closer to put in your notice. It takes a leap of faith to do what you will do and I totally get it. It was so hard for me to pull the plug to quit corporate and do self employed but I did and it was so scary! I don't regret it at all! I do have my own job part time with the music gig and that helps me feel better knowing my money goes to savings/retirement. Maybe you can work towards doing something like that and have it in place before baby is born. It's totally doable in your situation because you don't have a mortgage. Our budget is so tight but we make it work and you will too.

brij2006 · January 2017

@AprilZ81 My original thoughts were to stay until I had baby, take 3 months leave, then come back and put in my 2 weeks notice. There have been some things happening over the past couple of months that have become ethically and morally wrong as well as illegal in our industry, that they are doing. Its been very hard, but I am having a hard time staying just to be treated like crap because I continue to refuse to assist them in it, just for us to have 4 more months of my income.

At this point we do feel this is the right decision for our family. About a month after coming back from maternity leave, I talked with H about wanting to come home. I knew I wanted to be home even then, but we agreed that I'd come home when we had a 2nd child. H had been fighting against it for a while until I turned down the job at Dave Ramsey's. He realized then that I really truly do want a couple years home with our kids and I was willing to turn down my dream job in order to have that opportunity.

brij2006 · January 2017

@hoffse I'll be open.
We have $100k set up in a mutual fund right now that we could pull off of if we absolutely needed to. This would be my last resort. My thoughts are that this year H will make about $60,000 including his overtime. So without debt, we should be able to figure out how to live off of that.
We do have an additional $25,000 put aside on top of our 6 months emergency fund. This will be dipped into for the birth of baby if I come home and have baby on H's insurance plan.
Then we also have the Mustang we can sell and have been debating on selling that would free up about $50/month between licensing and insurance each month. That would give us about $25,000 to add to the pot.

This is where me being such a tight ass financial nerd gets us in trouble. I get anxiety just thinking about pulling from the $25,000 to pay for the birth of baby, to where my free spirit husband is telling me to just come home where I ultimately want to be right now and if we have to touch savings for bigger things like larger car repairs, then so be it.
I just don't want to dip into it constantly and then have it be gone and nothing to show for it, you know? That's almost 5 trips to Hawaii. ;-)

hoffse · January 2017

Oh something I have to say about this - I know you know this already, but this notion that you should suddenly be able to "live and give like nobody else" is not helping matters. That's aspirational, and it's great to have aspirations, but it's not realistic here.

The hard truth is that most people never get there. It's not just because of debt, it's also because of income and very real budget constraints, whether you have debt or not.

You guys are super super young to have reached that point. My parents JUST reached that point in the last 10 years or so, and they were way early compared to most people. You get there through a combination of increasing your assets and reducing your liabilities and time. Lots and lots of time.

Regardless of whether you prioritize high savings or debt payoff first (and we have gone around in circles about which one is better), you really need both to be able to live and give like "nobody else."

Also, this "nobody else" is a myth. I have a good client who gave away a million bucks last year. I would love to be able to do that, but we could never afford it. He wasn't living above his means when he gave it away, he literally had a million bucks lying around that he would not miss. You can't compare yourself to how others are living their life.

hoffse · January 2017

@Brij you could draw on $250-$300/month from that $100K without drawing down the principal. If you are open to it, that's a little more breathing room.

If this is a relatively short-term thing - say for a couple years - then I would do it. I would even be willing to invade principal in a small way for a couple years.

If this budget includes retirement contributions, then you guys will be fine spending the income from that fund while you stay home. You just need more time for your retirement accounts to grow. Use that money to buy yourself that time.

brij2006 · January 2017

Oh most definitely. I think we're just at the point where we need to shift our mindset about that a bit. That it will no longer be living and giving because we can financially. But living like nobody else because we're able to do something like this. Making the choice to have me come home even though my income more than pays for 2 in daycare and the costs associated with me working. We're purely making this decision because it's what we want for our family right now.

Xstatic3333 · January 2017

I think @hoffse's idea of drawing off the interest from the mutual fund account without touching principal is a great one! Another thing that pops into my head-would you have any interest in watching another child while you are home with your two? Just a few hundred extra dollars a month would mean the world in terms of breathing room, while still enabling you to live out your calling of staying home with your children. I'm so sorry your job is being so difficult and that you'll have to change plans mid-pregnancy like this.

smerka · January 2017

I know you guys are pretty devout followers but I'm pretty if you called Dave and asked him, he'd probably tell you to stay home. You are already living like very few people your age with a paid off house.

I get that it's scary because I went through it too. But I will never regret that decision. We did burn through my 'magic fund' over the last seven years. But my husband makes a lot more now and both kids are in school full time so I can work more. We didn't fully fund retirement every year but we are doing okay in the retirement department.

As as far as quitting now, ask yourself this question. If you weren't going to be staying home, would you be looking for a new place to work? I'd bet your answer would be yes. It sounds like you're miserable. Because you've worked so hard, you get to make this choice based on what you want instead of what you have to do.

vlagrl35 · January 2017

you will not regret SAH @brij2006 I just can't emphasize that enough. I'm assuming you guys do all your errands and chores on the weekends and its very scheduled. Imagine being able to do a lot of that during the week when you are at home. Taking the kids to a story time, coming home having lunch then laying them down for a nap so you can catch up on a few things around the house while they nap. Change is scary and it can be stressful - it's an unknown but why stay miserable at the job you are at when you are blessed to be able to do something you want to do that will bring you a lot of joy.

short+sassy · January 2017

AprilZ81 said:

Is there a reason you are quitting now instead of waiting? I get that your new boss is an ass but if you are that worried I would keep working until after the baby is born.

Staying at home is a decision but maybe it isn't the decision for your family? If you are this stressed out about a tight budget and are feeling a little resentment that after all of your hard work you can't "live like no one else" then something has to give.

You either need to reduce your tithing/retirement a bit, you need to work, or you need to accept the lower and tighter budget. With your husband working such long hours I don't think him picking up more hours is the answer, he deserves time home with his family that he is working so hard to support. If he works more hours he will miss so much of your kids growing-up years so that you can stay home. If you are both okay with that fine, but it seems unfair to me.

Try to look on the bright side. You guys are DEBT FREE. If anyone can make this work it will be you guys but you need to be comfortable with all aspects of what living without your income will mean.

@brij2006, I know we have some different views on money, but wanted to throw in my two cents. It sounds like, on a normal day-to-day/monthly basis, you and your family will have enough money to live on with a little bit extra, while still fully contributing to retirement and tithing. Certainly not as much "extra" as you all have now, but that's okay!

Without your income, you all might occasionally have to dip into your e-fund when there is an unexpected expense. That's okay, too! That's what it is for. You all can pay yourselves back over time and/or when you're working again. Or cut back a little on contributing to retirement, if that is what you all need to do. You can choose to contribute more to make up when you are working again in a few years (that's the impression I have). That's okay also. I'm guessing if I asked you "do you want to retire 1-2 years further out (which I don't even think is necessary) or stay home with your kids until their school aged?", it would be a resounding "stay home with the kids".

brij2006 · January 2017

hoffse said:

@Brij you could draw on $250-$300/month from that $100K without drawing down the principal. If you are open to it, that's a little more breathing room.

If this is a relatively short-term thing - say for a couple years - then I would do it. I would even be willing to invade principal in a small way for a couple years.

If this budget includes retirement contributions, then you guys will be fine spending the income from that fund while you stay home. You just need more time for your retirement accounts to grow. Use that money to buy yourself that time.

Our budget includes continuing to put 10% into H's 401k. We would not be funding our Roths while I'm home, unfortunately.

This would be a short term thing. We both are very open to having a 3rd child, so we've said that this will likely be a 5 year thing at most.
I'm not completely apposed to pulling the interest from that fund if we need to for replacing a vehicle, major car repair, a larger house repair, etc. But I just want to try as hard as we can to truly live off the income coming in, you know? I don't want to get comfortable with the idea that if things get tough we can just pull from that fund.
We know we'll pull from the $25,000 set aside for some things over the next year since we likely won't be able to cash flow all of them, but we'll try to cash flow as much as we can.

@smerka Oh I know for a fact Dave would say to come home if I called in.
Actually, if I wanted to continue to work I would have taken the position in Nashville at his company and we would have moved there earlier this month. The one and only reason I didn't accept the position was because we had a heart to heart about me staying home and H finally realized that I truly seriously want to be home with my kids for a couple of years. So I turned down my dream job with a company I 100% believe in, just so I can be home with our kids for a few years. Can't even explain how difficult that decision was, but I feel good with the decision because I know I won't get this time back with my kids. I can always put my app back in at Dave Ramsey's when I'm ready to get back into the workforce.

@vlagrl35 That is correct. Right now it's rush rush rush to get things done and accomplished at night and on the weekends. We know it isn't going to get any better once we toss another child into the mix. Our home/work balance is absolute shit right now and it's hard. On the weekends we feel like we just hand her back and forth between one of us watching her so the other one can get something done without interruption. Then of course the mom guilt kicks in and I ask myself why am I doing this? I have zero quality time with my child when I'm with her and neither does H. Not saying I think this will get 10 times better if I'm home, because I'll still try to get things done. But at least maybe when H is off we can have some sort of family time.

smerka · January 2017

Well to quote another financial guru, people first, then money, then things. You guys are going to be fine. I promise.

hoffse · January 2017

smerka said:

Well to quote another financial guru, people first, then money, then things. You guys are going to be fine. I promise.

Suzy's show entertains me, not gonna lie

@Brij, it seems like you guys have a budget that can work without any extra funds. Most months it will probably be fine. But we all know that you get those oddball months when you just need extra cash. If this is a 5-year-tops plan, then please be open to taking a draw during those random months when you need to supplement.

Also, if this is a rice and beans budget in order to avoid spending any of that money, then I would be concerned that it's unsustainable. It's true that 5 years is a blip in the grand scheme, but it's an awfully long time to be stressed about an extremely tight budget like you are describing.

brij2006 · January 2017

@hoffse :-( It is a rice and beans budget. The grocery budget is low, but doable if I do some more things from scratch. It's the same budget we had when getting out of debt.
I know that there will be some months we're just going to have to use that extra little bit for us to do a few fun things and have some sanity.

I think we did find a little more wiggle room last night though. We met with our accountant to do our taxes and she ran a rough estimate of what our 2017 tax return would look like. We'd get about $3,500 back, even with losing my income. So we are going to adjust H's withholdings. So hopefully that will give us about another $200-250 each month.
If that puts us at about $500 extra each month then I feel a little better. It's just those things like this month H's car needs an oil change. It does save us money in the long run, but he uses higher priced oil so it lasts to 10,000 miles instead of 3,000, especially when he puts 30,000/year on his car. But it's $75 in an expense this month. Then he needs new catalytic converters. Thank God he's very handy with cars so he's going to do the work himself and has found a way that will be a cheaper option. But it's still $400 for the parts.
So there would go that entire buffer for the month. That's the part I get anxiety about.

I am open to any side hustles to bring in some extra cash. So I'm trying to do some searching about my options with that now. Just don't want to commit to anything until baby #2 is here and I have some sort of normalcy and schedule.

Someone tell me it will all be fine

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