I really love the idea of small changes over time adding up to huge improvements later on in life. When we first started our journey towards better financial health way back during the 2008 financial crisis we made many small changes that reduced our spending, raised our income and increased our savings rate. Over the last 10+ years many of the small habits we started are so ingrained in us that we don’t even think about it any more. We have added a couple of kids since then and now we have one in college and our expenses have dramatically increased so small changes are much more important for our overall financial health. I find that when we don’t keep track of the smaller things the larger ones get lost as well. One of our biggest costs every month is child care and keeping those costs low is a priority for us right now as we head into another school year where we could potentially be paying way more than we budgeted for if we are not careful.
As ridiculous as it seems, “sleeping in” until 5:30 am every day costs us around $300 a month. How you might ask? When I sleep in I start work an hour later and we end up paying for an extra hour of child care after school. At $15 an hour for two kids times 5 days a week is $75 a week extra in child care. Multiply that times 4 and you are at $300 a month which of course would be higher in a 5 week month. It is kind of ridiculous to think of that extra hour of snooze time as costing us so much money a month and $3900 a year if we do it all 52 weeks!
Small changes over time add up to huge improvements later on in life.
We are super lucky to have flexible schedules and childcare that charges us by the hour for after care instead of a blanket amount each month but it also leads to childcare costs not being steady and harder to budget. Starting this summer is our first time having to pay for after care for both kids. Prior to that our son was in a more traditional day care setting and had a flat monthly rate which was great for budgeting but it never went down when we missed days. Now that he is a preschooler his official school end time is at lunchtime and we pay for afternoon care by the hour. Our daughter gets out at 3:00 and we pay for care after that time.
One of the good things about this arrangement is that we are able to put our child care costs on a credit card and earn cash back for something we would be paying anyway. This only works though if you are paying off your credit card every month and not paying any interest. We find out about three weeks in advance how much our bill will be and prior to that I put a placeholder in my Quicken account for an estimated amount that is over what I think it will be and that helps us prepare for making a large payment on the next payday. I budget for childcare based on when they bill us. We get billed on a monthly basis from September through the first half of June and then we get a separate bill for care from the second half of June through the end of August. Last year all of the charges for the second half of June, and all of July and August went through in September so it was quite a large amount but I knew it was coming so I was able to set aside money and schedule my payments out in advance. This uneven way for charging us for child care is part of the reason why we have had a hard time budgeting over the past few years. Our expenses vary so much based on which month we are in that it is difficult to plan. Putting our expenses into Quicken months in advance and then looking at our lowest point over the next six months has really helped keep things in perspective.
We budget six to nine month in advance to get a bigger picture of where our finances are heading.
To reduce our child care costs Mr. Oscoey and I do a mini split-shift with work . I go in super early and pick the kids up as soon as I can and he drops them off when school opens so we are not paying for before care as well. We do this to save money and because our son can’t really be dropped off early enough to make a difference in paying for before care for our daughter. It does cause some issues, mainly because sometimes Mr. Oscoey has to go in earlier but so far we have been able to work it out where I work from home before dropping the kids off closer to 9:00 but honestly this is pretty exhausting for me. I usually end up having to work another hour at night and spreading my 8 hours out over the course of the day like that makes the work day seem soooo much longer. My commute is pretty bad and when I split my working hours up I end up spending the entire day working, driving, working, driving, eating dinner, and then working some more and that is not super fun. I need down time every day and when I work those crazy split shifts I don’t get enough.
Last year when we were only paying for after care for one kid some months Mr. Oscoey was able to get off early and pick the kids up by 3:00 nearly every day our bill was only $150 for an entire month which is super cheap. Based on our normal pick up time for this year with two kids in after care we will end up paying $262.50 a week if I sleep in until 5:30. This ends up being over $1000 a month which is a huge chunk of our budget. If I can leave in time to save an hour of after care every day that will lower our bill by $75 a week and $3900 a year! Unfortunately when Mr. Oscoey got off work early enough to pick up the kids and avoid after care he would have to work late at night and we would not get grown up time. For everything there is a trade off and finding balance while being a working parent is difficult.
Leaving an hour earlier will save us $3900 a year in child care costs!
If we wanted to save $3900 dollars a year and pick the kids up right after school I would have to get up at 4:30 every morning and unfortunately that is not an easy task for me. I need my sleep, like really need my eight solid hours a night and I would have to go to bed immediately after the kids if I wanted to get up at 4:30 in the morning every day. Leaving earlier would also be a guarantee that I would not see the kids in the morning, even for a little bit, nor would I get alone time with Mr. Oscoey at night. Being a working parent is all about balance and I love seeing my kids in the morning before I leave. We snuggle on the couch for a few minutes and we talk about our day for a bit. Sometimes if they get up early enough I am able to eat breakfast with them and maybe read a book. The days that I don’t see my son before I leave it is hit or miss whether or not he will cry for a long time because he didn’t see me before school and that is hard to hear about when it happens.
Alone time with your spouse is also key to a healthy marriage and difficult for any couple with small children. Mornings are spent packing lunches and getting ready for school/work and the evening is the only time Mr. Oscoey and I are able to catch up about work or talk about what our family plans are. I also spend some some of that time working on the blog and balancing our checkbook. Right now we are trying to watch “Game of Thrones” which is pretty inappropriate for kids so we are only able to watch when we are alone. Running the numbers on how much we would save if I leave earlier in the morning was pretty eye opening though and I think I will try to find a compromise where I can leave earlier some of the time and maybe have Mr. Oscoey pick up early when he can. I don’t want to lose too much of my morning time with the kids nor my evening time with Mr. Oscoey so we will have to find a way to reduce our costs without bringing too much stress into our lives.
Balance is key when you are a working parent.
What could we do with an extra $3900 a year? I can think of so many things but I would absolutely love to travel with part of it and invest the rest. If we saved $3900 for the remaining 6 years that we are paying for after care for both kids it would be a grand total of $23,400 plus interest! This small change would have a huge impact over time. It is definitely something I am going to work on and see if even leaving 30 minutes earlier will save us that hour of child care in the afternoon.
What small changes are you making that have a huge impact on your life?