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Planning For The Expected and the Unexpected

October 7, 2011 · 19 comments

in Life, Personal Finance

There are some things in life that seem to come out of nowhere and strike unexpectedly.

Then there are things that you know are a possibility, and can be planned for.

Having a baby generally falls into the latter category.  Even though not all babies ‘are planned’, people know what can result in a baby…

Going Into Foreclosure To Stay Home With A Baby

I was reading a great post over at Squirreler’s this week that instantly inspired me to write this post.  Squirreler writes about a couple who is headed toward foreclosure because they had a baby, and mom decided to just up and quit her 6 figure income job because motherhood was her ‘calling’.  This couple is also in their late 30s from what I can surmise from the article, and they live in a large home that requires two incomes to pay for.

First of all, if I was childless into my upper thirties and couldn’t afford to live on one income, then shame on me.  I cannot imagine how much money my husband and I would have stashed away if we hadn’t had children young. Also, why did this family of 2 need a large house with an equally large mortgage payment?  Both were making over $100,000 a year, so I imagine this house was way more than 2 people ever needed.

Second of all, where was the planning in this situation?  It isn’t like you get pregnant and the baby shows up during yoga class the next day.  It takes 40 weeks for that baby to make an appearance, give or take a week or two.  This couple could have either aggressively saved during the pregnancy, or looked into downsizing their home in order to have enough money for mom to stay home.  Instead, the mom threw caution to the wind, the dad just nodded his head yes and let her do whatever she wanted, and she went in and quit her job after the baby was born.  Meanwhile, the neighbors can watch their home values drop because this house will be going in to foreclosure.

These are grown adults that should know better!  It would be one thing if the baby had unexpected medical problems and the mom needed to be home, but that is not the case (as far as I know).

I Wish I Could Have Stayed Home Right Away Too

When I got pregnant at the age of 25, my husband and I were living in an apartment and didn’t have a ton of savings. We started looking for a house anyway, and ended up buying a cute starter home, which was reasonably priced.  Because of student loans, car payments, and the mortgage, we knew that I would have to return to work once the baby was born. That sounded reasonable when I was pregnant, but things changed once I had the baby.

You Can Never Understand How Much A Baby Will Change Your Life, Until You Have One

I had zero experience with kids or babies when my son was born.  As a matter of fact, my son’s diaper was the first diaper either my husband or I had changed, ever.  I had no idea what I was in for was that child appeared, and I was caught off guard in a million different ways when he arrived.

One huge thing that happened when my son was born was I did not want to return to work.  I just did not want to leave my little guy at all, I just loved my new role as mom.  Some of my friends were able to stay home while their kids, but they either didn’t have student loans, or were older than me when they had their children.

Anyway, when my maternity leave was over, I plodded along and went back to work, crying as I left the house.  I didn’t want to leave, my heart was broken, but I did what I had to do.  Nobody told me to get pregnant when we weren’t financially ready to live off of one income, it was all our decision.  Each month we paid down the debt more and more, and I constantly looked at our finances to see when I could quit.  After my third child was born, I was finally able to be a stay at home mom.

Never, in a million years, would I have quit when we could not live off of one income.  Sometimes life is hard, and sometimes we all have to make choices we don’t want to make.  However, we were not born with the right to do whatever we want, letting other people suffer consequences along the way.

You Must Always Look At Where You Are Now, and Where You May Be Tomorrow

Life can take twists and turns, and it is impossible to totally predict the future.  But, you can do your best to be prepared for the future. For instance, when I got my BA in Finance, I was engaged.  Since marriage and kids were not too far off in the future, I decided to immediately enroll in the MBA program because I knew my personality, and figured that I would never want to go to school at night while raising kids.  I knew what my future circumstances were most likely going to be, so I took appropriate action to prepare for my future.  I could have just gotten a job after graduation and enjoyed finally making some money.  But I put the money-making on hold to take care of something that I knew I needed to do instead.  In other words, I looked at the long-term instead of living for the moment.

Do Not Wait For Life To Happen To You

In this economic climate, many people do not know if their job may be eliminated tomorrow, or if a pay cut is waiting for them around the corner.  People should always have a backup plan in mind.  Don’t just think  ’oh I will look for a job while I am on unemployment’. Start thinking now of what you would like your next step to be.  Maybe you are an engineer and always dreamed of being  a teacher.  If so, take the next step and see what it would take to get a teaching certificate.  Only you can control your future.  Your employer and your spouse have some impact, but ultimately, you are responsible for your happiness and your income potential.  Don’t be an excuse maker, be a future-creator.

As I said, none of us have 100 percent control over what happens tomorrow.  However, if you take the time to really be aware of what is going on in your life, and in the world around you, it will be easier to handle the things that come your way.  I know that many people love to use the phrase ‘ignorance is bliss’.  To me ‘ignorance is stupid and dangerous’, and people that believe it is bliss just want to bury their head in the sand and complain when something goes wrong.

Don’t be that person that is unprepared for the future (especially if the future you create is a baby).  Make sure you frequently review where you are now, where you want to be in the future, and the steps you need to take in between.  If you do that and also live below your means, you hopefully won’t have to face foreclosure when you are 39 years old and making over $100,000 a year.

 

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{ 17 comments… read them below or add one }

Little House October 7, 2011 at 9:51 am

Well that was a pretty balsy move that mom made. You would think she would know better and would have downsized during the “planning” phase of getting pregnant!

I don’t have kids, but I’ve seen my friends lives change significantly after having a baby. They don’t want to return to work and their entire focus is on their child. It also means little sleep, lots of diapers, spit up, and lots of baby smiles (that’s when I hold them, of course!) Mr. LH has been asking lately when we’re going to have one of our own (we’re pushing the age limit now) and I really don’t know if he understands the full ramifications of life with baby. I do. It just won’t be the same. However, if it were to happen, financially our lives would have to change.

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Kris October 10, 2011 at 11:38 pm

Little House- as I said, you will never understand the ramifications of a baby until you have one, as you know. However, they are the best ‘ramifications’ you could ever make.

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Molly October 7, 2011 at 10:30 am

I read his article too and it kinda ticked me off. This type of entitlement can get my goat. It comes as a reaction (like you) from my own experience.
When I had my baby I went back to work when she was 5 weeks old. I cried that first day but I was also thankful. I was working two jobs and both employers offered me a full time position after the baby was born. One at a higher hourly and I would put my baby in a daycare the other was a lower hourly but I could bring the baby to work. I was grateful because I had choices! I decided to take the job where I could bring her to work.
I had separated from my husband and was getting a divorce. I never went into debt during this time. I lived on very little (babies don’t cost much in that first year!)
I’m not saying I’ve never acted like an entitled brat but I don’t stick my head in the sand! I say, “Molly pull your head out of your behind and stop it!” If I don’t my lov-er-ly husband or a close friend do it for me!

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Kris October 10, 2011 at 11:37 pm

Molly, you should run for President, or at least be the head of some important department. Maybe the ‘department for bringing reality to the disillusioned’?

Choices are a wonderful thing, but you do all the right things so that you would have choices. You didn’t just sit back and wait for someone to take care of everything for you.

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barter411 October 7, 2011 at 1:01 pm

Evidently, common sense is not necessarily a prerequisite to a six-figure income or a stellar career path. In every way they were living the “American Dream” until circumstances led to the rude awakening. No doubt they are facing some hard choices and it appears they have further to go before they accept reality. So many things that would have worked 50 years ago are hard to accomplish today. Stay at home moms are a blessing. I had one :)

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Kris October 10, 2011 at 11:35 pm

I love being a stay at home mom, but it definitely was not easy financially. Retirement will wait longer, and we have never lived extravagantly. However, I never wanted to either so I don’t feel like I missed out on anything. These people were just crazy to spend so much on just the two of them. I just do not get it. Seems so empty.

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Krantcents October 7, 2011 at 2:24 pm

How can someone who earns a six figure salary be irresponsible? I know there are many of them! Stupid decisions affect more than the adults.

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Kris October 10, 2011 at 11:33 pm

I guess it just goes to show that no matter how much some people make, they will find a way to spend it. Can you believe they were so broke and didn’t even have kids???

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retirebyforty@retireby40.org October 7, 2011 at 4:35 pm

That is crazy to quit working while you can’t pay the bill. They should just move to an apartment and cut enough cost to live on one income.

I know what you mean about going back to work after the baby. It was tough! I think you made the right decision and you are doing so great where you are now.

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Kris October 10, 2011 at 11:31 pm

I am very happy with my decisions, and I think you are doing a fantastic job. Look how far your site has come in the last year, and you have a wonderful baby and a plan in place.

I just want to smack those parents. I am surprised they don’t live next door to me given how people are walking away from their homes.

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Jenna, Adaptu Community Manager October 7, 2011 at 7:00 pm

Wow! Definitely something to ponder. Thanks for sharing your thoughts.

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Moneycone October 9, 2011 at 9:54 am

“You Can Never Understand How Much A Baby Will Change Your Life, Until You Have One”

Absolutely! Being a new parent I can’t stress this enough! I always used to get annoyed with screaming kids in a plane; now I’m much more understanding! ;)

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Kris October 10, 2011 at 11:27 pm

Oh I know. I just think “oh poor parents”. I have been a parent on a plane with a crying child and it is awful.

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Squirrelers October 11, 2011 at 4:02 pm

Just got to fully read your write up, I was curious once you commented on my site that you’d be sharing your thoughts in another post on your site. I knew it would be good! :)

Anyway, I think that a big issue here is that there are some gaps in pereceptions of gender roles, and the realities of 2011.

By this, I mean that the economy today is not what it was in past generations in this country. Oh, I know the great depression was worse, but by relatively modern standards, this economy is bad. For some families, it really helps to have 2 people working, though there are tradeoffs of course as we know.

Also, there are more women in the workforce than ever before. I know – I see them all the time, they’ve been half the office in my workplaces for a decade. Plus, at this point, more than 50% of the undergrad degrees and graduate degrees are earned by women. So, the old fashioned reality of men only being the ones who can really earn decent money is long gone. Men can be breadwinners as can be women, from an employment opportunity standpoint.

The thing is, when lives are structured around both people having jobs and having these opportunities, you just can’t switch over to a different way of thinking without there being ramifications. Can’t have cake and eat it too.

Having the freedom to work, and then quit when having a baby, means needing to adjust to living on one income vs. two, and be fine with it. Also, it requires doing so responsibly, not just diving into a different lifestyle immediately based on emotions. May be hard to do, but it has to be done.

The issue here I think is that both man and woman in this case are stuck in old gender role thinking. She thinks that once she had a baby, he should be entirely responsible for providing for her simply because she’s his wife and mother of his child – that it’s his responsibility since he’s a man. She isn’t grasping that they both are responsible for each other, and that they can both work (post maternity leave of course) or one or the other could stay home. How they choose to handle it is a joint decision that involves both of them, but she sees it as her pre-ordrained right to quit working, and have him deal with the fallout….which ultimately will impact her anyway.

He, on the other hand, seems to think that he needs to simply make his wife happy at all costs. He seems conditioned to think that if he can’t make his wife happy and give her the life she wants, he’s not being a man. His pride and stupidity (even if well meaning) are sending their lives down a path of financial problems. He’s simply not understanding that his wife is a partner, not someone he’s solely responsible for pleasing. Being a grown up means being able to speak up. Conflict avoidance can be harmful. He really needs to realize that there are a variety of options for managing families in 2011.

I don’t see why they couldn’t sit down together and decide together what is best for their family – rather than have her unilaterally decide what she wants to do, and have him just follow along despite the clear negative consequences. Both of them need to be happy, and both of them need to use their brains and realize that in 2011, with their current commitments, there are a variety of ways they could compromise to live a life that makes them both happy and financially stable.

After reading your post, and reading the comments of others on my blog to my original post, I’m getting less understanding of both the husband and the wife.

I’m interested in following up with my friend to see how this all transpires with those friends of his….I wish them the best!

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Kris October 11, 2011 at 11:27 pm

Great comment Squirrel, and thanks for leaving it.

I would love to read a follow up post on your site. I totally agree with the evolution of the workplace over the years. However, she now wants to go back in time and act like they always could live on more income and she wants her husband to get out of the cave and go hunt and gather more. Well, I think she needs to gather too, or sell her larger cave and move to a smaller one. (I know you suggested they downsize their home in your post.)

It is hard when an instinct tells you to be home with the baby, that is exactly what happened with me. However, my brain had to take over and say ‘well, you can live with your happy little family in debtor’s prison, or suck it up and work until you can afford to quit’.

If he gives in to her every whim all the time, it is going to take its toll eventually. (I assume.) We all want to please the people we love, but common sense has to come in to the picture at some point.

Looking forward to the follow up!!

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Squirrelers October 11, 2011 at 4:03 pm

By the way, that was practically another post I just wrote above, isn’t it? Hit a new record again for longest comment ever:)

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Kris October 11, 2011 at 11:22 pm

I love long comments Squirrel!!

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