? for SAHMs re: Retirement, Savings, etc.

[DVCLiz]

Lots of threads about working, staying at home, etc. lately, so I thought I'd ask:

If you're a SAHM, are you able to also save for college, retirement, etc. or is that something you'll do later after your children are older? Or can your husband do all of that at the same time? Or are you giving that up in order to have the time at home now??

No opinion about which is better - I just see a lot of people say things like, "I can earn money later but my children won't be little forever", etc. and I wondered if the bigger financial picture ever entered into the scenario.

 

[momto2girls]

I am a SAHM and don't ever intend to return to the work force. Until I had my first child a few years ago (at age 31), I worked. My husband and I were very disciplined about putting the maximum amount in our 401(k) funds since we started working in our early 20s. We also started putting money monthly in our kid's college funds upon their births.

We are very fortunate in that my husband makes a good income and we are able to continue to save for retirement and college monthly, as well as putting in large chunks of cash periodically as well.

However, even if this wasn't the case, I would cut back in other ways to be able to save for the future rather than returning to the workforce. Staying home with my children is my #1 priority.

 

[bebelle]

We were definitely able to put away more money for retirement when I was working. We still manage to save for the future. It is important to save money on a regular basis even if it is a small amount. The power of compounding should not be underestimated. The sooner you start to save the better.

It is also easier if you never see it in the first place. That is why having it deducted directly from a paycheck or checking account is a great place to start.

It is amazing that you usually have everything you need but not necessarily everything we want. We just need to learn the difference.

 

[meandtheguys2]

We have retirement and college pulled from DH's check also. Before we had kids each of us had a nice bit saved, which has also been a tremendous blessing! Day to day, we live relatively simply, but we enjoy traveling, etc. At home we cook from scratch, so that when we are away, we can do whatever we like. It works for us.

Both DH and I (enough to stay involved) work for Higher Ed., and the kids could technically go to either a state u., or my college (or one of the schools are in the network) for free. We don't assume, however, that they will, or that we might not change our plans!

 

[bebelle]

We have retirement and college pulled from DH's check also. Before we had kids each of us had a nice bit saved, which has also been a tremendous blessing! Day to day, we live relatively simply, but we enjoy traveling, etc. At home we cook from scratch, so that when we are away, we can do whatever we like. It works for us.

Both DH and I (enough to stay involved) work for Higher Ed., and the kids could technically go to either a state u., or my college (or one of the schools are in the network) for free. We don't assume, however, that they will, or that we might not change our plans!

I am glad you brought the point up about cooking and eating at home. Eating out and picking up take out really "eats" away at the budget. We were amazed at the amount of money we could save by turning on the stove!!

My husband also works in Higher Ed. We too don't assume that our son will go to school for free but it is an outside possibility. If he does, we will be that much further ahead financially.

 

[kribit]

We were definitely able to put away more money for retirement when I was working. We still manage to save for the future. It is important to save money on a regular basis even if it is a small amount. The power of compounding should not be underestimated. The sooner you start to save the better.

It is also easier if you never see it in the first place. That is why having it deducted directly from a paycheck or checking account is a great place to start.

It is amazing that you usually have everything you need but not necessarily everything we want. We just need to learn the difference.

We are exactly like this. As one of the other posters, I also did not intend on returning to work but dh and I realized our savings aren't as good as they should be so I took a part time consulting job to make up for the last 4 years of staying home. Being home for my children is the most important thing, so we're finding ways to make everything work. Schedule wise, it can be a bit of a pain, but I realize we are very lucky to have this flexibility. I know it's a hard balance for a lot of families.

Up until recently, I had intended on returing to school, but after looking at "our whole picture," realized it wasn't feasible. Plus, I just wasn't motivated enough.

 

[chip91]

Retirement - Yes 5% of DH's paycheck goes to this, a small amount but hey after only 5 years we are close to 24,000.00 in there right now!! he's only 33, so God willing he's blessed with a job and good health, we hope to contribute to that for another 30-35 years, my goal is to bump up to 10% at age 40 and 15% at age 50. I know I wouldn't have been diligent enough to save that $ over 5 years in a regular savings, so I am thankful for 401k being taken right off the top, don't see it, don't miss it!!
College - NO

* My parents didn't *HELP* me with any college money at all, other than they did pay my rent for 2 years while I attended a 2 year college, the 1st year it was 150.00/month, 2nd year it was 175.00/month, so they helped me with close to 4000.00, I GREATLY appreciate this, and that's all I will do for my kids, probably say here's $200.00/month for living/education expenses. We sacrificed $$ so I could stay at home, I feel that is what matters most, if I choose to get a job in a few years, I may try to stick some of that away for them, but first and foremost I will contribute to DH & I's future (paying down the mortgage, getting a nice savings account, adding to his or starting my own 401k).

Guess I'm in the minority on this one, no flames please!

 

[twinspluscade]

Retirement - Yes 5% of DH's paycheck goes to this, a small amount but hey after only 5 years we are close to 24,000.00 in there right now!! he's only 33, so God willing he's blessed with a job and good health, we hope to contribute to that for another 30-35 years, my goal is to bump up to 10% at age 40 and 15% at age 50. I know I wouldn't have been diligent enough to save that $ over 5 years in a regular savings, so I am thankful for 401k being taken right off the top, don't see it, don't miss it!!
College - NO

* My parents didn't *HELP* me with any college money at all, other than they did pay my rent for 2 years while I attended a 2 year college, the 1st year it was 150.00/month, 2nd year it was 175.00/month, so they helped me with close to 4000.00, I GREATLY appreciate this, and that's all I will do for my kids, probably say here's $200.00/month for living/education expenses. We sacrificed $$ so I could stay at home, I feel that is what matters most, if I choose to get a job in a few years, I may try to stick some of that away for them, but first and foremost I will contribute to DH & I's future (paying down the mortgage, getting a nice savings account, adding to his or starting my own 401k).

Guess I'm in the minority on this one, no flames please!

No flames here--I'm in the minority too!!

Dh gets money taken out and put in his 401 K each week--but I have no idea what it even is right now! Other than that, we have no "future" savings. I'm not a big one for planning way in the future; there are just too many things that can happen in the meantime. On a side-note, my parents are the total opposite, and have been saving for years (not quite sure what they're saving for ). They literally spend very little money and haven't gone on a vacation since 1992 even though they both make pretty good money. So I guess my point is that you can "over save" and end up not living in the moment. It bothers me in particular with my Mom; she has a heart condition and who knows how long her health will be good enough to still travel and do other things.

We're also planning on having our kids pay their own way through college. We'll probably help a bit with living expenses--let them live here for free, pay for car maintenace and insurance, etc.--but otherwise they'll be on their own.

Kelly

 

[jjj444]

I am a SAHM that works 2 days out of my home(I watch a friends baby) and we have a very nice retirement account. My husband has maxed out his contributions and we are still able to save money monthly too. We live pretty frugally: eat out maybe once a month, no cell phone, clip coupons, only buy things that are on sale, I cut both of their hair and we find free things to do. With that being said we don't have to live this way we just choose to. We could easily blow through our money like everyone we know but this works for us. We do not have a college fund and we might not get one either. Like our financial guy says "your kids can get loans, scholarships and financial aid for school but you can't for retirement!"

 

[twinspluscade]

Oh, forgot to add that I was the same way (about not saving for things in the way future) when I did work, and probably will be the same when I return to the work force in a few years. Definetely a life management choice for us rather than a stay at home/work thing. Although I do think when we get a bit older we'll start saving more for retirement (we're currently early 30s).

Kelly

 

[bumbershoot]

We do not have a college fund and we might not get one either. Like our financial guy says "your kids can get loans, scholarships and financial aid for school but you can't for retirement!"

Ayep!

Plus, I still have student loans out there, waiting. First I need to really go after those, and once things are more squared away with that, THEN I can start thinking about helping DS and any future babes.

 

[nannerbadnanner]

I am a SAHM and we contribute to both retirement and college. Fortunately, DH's company matches at 150% for the first 2%, 100% for the next 2%, and 25% for the next 2%. This is a great help. His company also has a pension plan. He is fully vested, but who knows if it will be any money there when he actually retires. I also have a retirement account and contribute what we can when we can.

We put a small amount each month in a collge fund for DD and try to put in lump sums whenever possible.

 

[MrsKreamer]

I am a SAHM. DH's 401k won't kick in until September(that's when he makes 1 year at his company). We will be sure to try and put in the max amount to make up for me. The plan right now(we are only 25 and the kids are under 3) is to provide private education(public around here is horrible) through high school. As soon as the kids are school age I will work part time to pay for this. I do not want to pay for college. My parents did not pay for mine, and I had to work hard to stay in school. I will help out in living expenses, help with loan paperwork, etc.

Before Katrina I had just started court reporting school. I really liked it and I would love to get back into that. 2 years max of school, and it is something I can start later in life, flexable schedule and decent pay.

I feel that the sacrifices we make now...putting my college off, possible less spending money/savings/etc(I say possible because honestly whatever I could make in the shorterm would be almost completely devoured by daycare)...are less important, and should be there when my kids are school age.

When I did work(a few months before Katrina) I felt I had no time to myself. I was either at work, or at home, with no energy to devote to either. So after I found out Aiden was on his way, the decision was kind of made for me. We came home and the few daycares that were open and decent were full. After Aiden arrived, short term we couldn't afford two kids in daycare...long term it didn't make any sense to us.

I say to each there own. My mom was a working mom and even if she had a million dollars she still would have worked. I respect that.

 

[katerkat]

We have savings, IRAs (both of us) and money going into Russ's savings account every month.

 

[pantherlj]

No flames here--I'm in the minority too!!

Dh gets money taken out and put in his 401 K each week--but I have no idea what it even is right now! Other than that, we have no "future" savings. I'm not a big one for planning way in the future; there are just too many things that can happen in the meantime. On a side-note, my parents are the total opposite, and have been saving for years (not quite sure what they're saving for ). They literally spend very little money and haven't gone on a vacation since 1992 even though they both make pretty good money. So I guess my point is that you can "over save" and end up not living in the moment. It bothers me in particular with my Mom; she has a heart condition and who knows how long her health will be good enough to still travel and do other things.

We're also planning on having our kids pay their own way through college. We'll probably help a bit with living expenses--let them live here for free, pay for car maintenace and insurance, etc.--but otherwise they'll be on their own.

Kelly

That is the approach we are taking. A slight twist. I am the one working and DH is the one at home with the kids. I chip in the max that my company matches on my 401k (100% to 6%) and the add another 3% of my total salary at the end of the year - they just started the 3%, I get it tomorrow

We aren't saving for college. They do have bonds and a savings account that will help them get started but that is from their grandmother and great grandmother.

We don't want to struggle and not enjoy life so we do go on nice vacations when we can (we do it with cash, not credit cards). We could put more toward savings if we didn't but like you said, I want to enjoy the "now" too.

Of course, you have to pick and choose what is more important. Eating out all the time, vacations, savings. It is such a personal decision!

 

[PiperPizzaz]

I am a SAHM but, when my kids are in school I will go back to work. (plan on having 1 more kid) We will still live off of Dh's income. My income will go to retirement/college/vacations. That is it. I figure if we can do it now we can do it then. I know it is hard to keep your cost of living the same when you make more but, we will have to. Dh has 401K at work too. I am already saving Ds's money. He will have to help pay his way at college, I want him to have a good work ethic but not too stressed about money.

 

[DisneyMommyMichelle]

SAHM checking in We have college funds for all 3 of our children and the 3rd isn't even born yet

We also have retirement funds and a travel fund all in addition to our savings and Checking accounts. Our secret is we live waaaay below our means. We moved out to the middle of nowhere and our mortgage is a lot lower than we can afford. Our house is cozy and gives us everything we need! (well i wouldn't mind an extra car garage! haahha!).

I am not sure if i plan on going back to work right now. I just want to be here for all my children. before and after school and vacations and if they are sick and such. So until i make that decision, there is no huge mansion in our future

 

[mrsltg]

This thread is very interesting to me. I do work outside of the home and I have two dd's. We're considering another baby now, and we plan to finance college 100%. I do have a 401k that I fund at 12%, and dh has a federal pension. I feel fairly secure (as secure as one can be, at least!) in the future. I completely respect others who will not pay for children's college - to each their own. My one question, though, is when it comes to retirement, for those of you who do not maintain an account, what happens in the event of divorce? Have you planned for a scenario like that? I ask because none of my good girlfriends are SAHM, so the SAHMs I am friendly with I am not close enough to to be able to ask. It's just always something I've been curious about.

 

[katerkat]

My one question, though, is when it comes to retirement, for those of you who do not maintain an account, what happens in the event of divorce? Have you planned for a scenario like that? I ask because none of my good girlfriends are SAHM, so the SAHMs I am friendly with I am not close enough to to be able to ask. It's just always something I've been curious about.

I do maintain a separate IRA - we both have one in our own names, and they are funded equally. Neither of us have 401Ks - I was never at a job long enough (yay military wife!) and we don't see much benefit to the military retirement plan because they don't match contributions. (I don't think. I could be wrong.) We are counting on the military pension as well, and I remind DH on every anniversary that I only have to be married to him for ten years to get half his retirement. (Halfway there this year! ) We do plan on fully funding college for our child(ren) as well and have started saving for that. I also plan on going back to work when the child(ren)are older. (Actually, I plan on writing novels and finding a publisher.....but that's more a dream than a plan. )

 

[meandtheguys2]

I do maintain a separate IRA - we both have one in our own names, and they are funded equally. Neither of us have 401Ks - I was never at a job long enough (yay military wife!) and we don't see much benefit to the military retirement plan because they don't match contributions. (I don't think. I could be wrong.) We are counting on the military pension as well, and I remind DH on every anniversary that I only have to be married to him for ten years to get half his retirement. (Halfway there this year! ) We do plan on fully funding college for our child(ren) as well and have started saving for that. I also plan on going back to work when the child(ren)are older. (Actually, I plan on writing novels and finding a publisher.....but that's more a dream than a plan. )

LOL!

I'll read your books, KK!