Archive for August, 2008
*Work being defined here as something you get paid for. Everything else I do daily (child rearing, cooking, cleaning) is, of course, gratis!
I probably have the ideal job situation, well certainly for me anyway. I have a Master’s Degree in Structural Engineering, and got my Professional Engineer’s license just prior to giving birth to our first child.
A while back a co-worker and I discussed the possibilities of working together in the future when he started his own company and I wanted to be able to stay home with my children. As luck or timing would have it, he was ready for his first employee as I was ending my maternity leave with my former employer. I may have been able to work out a part time schedule with employer at the time, but this was the opportunity to work exclusively from home, indefinitely. It was an opportunity that does not present itself to everyone and I am blessed to be able to stay at home, while still significantly contributing to the family finances. It also gives me the chance to exercise my brain so I don’t get mommy brain (which I have anyway, but at least this way I’m still sharp with the calculator!) This job has given me the ability to work from home and make great money. At the same time I can stay home with our daughter, which has always been a goal for our family.
For over a year I have managed to work a 20 hr week and care for a our child. Aside from a few weeks here and there. I typically work while our daughter naps and then after MITBeta gets home from work or after she is in bed for the night. She has been very good about sleeping (we did have some rough patches but I’ll save that for another post!) She has recently transitioned to one nap in the afternoon and I can typically get about 2 of my 4 hours in at this time. Since she just made the switch I’m hoping it may get a little bit longer, but for now I’ll take what I can get! I do have a little desk and coloring station set up downstairs in my office, but I haven’t really had a chance to test that out. I think she is still too young to be able to sit and entertain herself in one spot while I get anything productive done.
The other day I got to thinking about the pros and cons of being a work at home mom. It came up because I became annoyed by the opportunity for MITBeta to get a nap in after work. I suppose the reason it upset me is because it’s tough to work from home. It’s obviously a huge blessing to be able to work in my field, from home, and set my own hours, all while bringing in a healthy income. I can choose to work 4 hrs/day or do it all in a few days. Up until now I have never really asked anyone for help so that I can work unless I have appointments outside of the house. I’ve been lucky and have been able to get my work accomplished and still be able to do what I want to do in the evenings and weekends. As the months have passed we have had to re-evaluate and change our expectations.
Recently we switched from my company’s health insurance to MITBeta’s. This has removed the pressure to work the full 20 hrs every week. I try to work between 15 and 20 hours and have been averaging around 18. Although we lose some money this way, the pressure is eliminated and which may have been the hardest part of the being a work at home mom. Imagine the idea that you need to work, and have to constantly make choices between housework and “real” work. I think I’d rather do “real” work most days!
In the near future, it might be time to re-evaluate the situation. We do have a mother’s helper that is in the neighborhood that I could use for a few hours a week, although with summer quickly nearing an end, that option will go away. But more importantly, I realized the other day that we need to budget in time for me into our weekly schedule in the same way we budget savings into our financial budget. Unfortunately when you have to work while your child naps you don’t get much, if any, downtime. It’s amazing how much downtime there is at a desk job! So in order to maintain my sanity, since working at home means I can be working at all hours of the day, night, and weekends, I need to carve out time for myself each week. I think this will go a long way to helping me to be a more productive mom and employee.
Here are some Pros and Cons, as I see it, of being a WAHM:
Pros:
Flexibility to attend playdates, appointments, and lunches with Daddy and grandparents, the ability to run errands in the daytime when the stores are less crowded, able to personally care for my daughter and attend to her hourly needs. This last one has allowed me to breastfeed until my daughter was 19 months old and hopefully will also lead to quick potty training, but I’m not holding out too much hope for that one yet!
Cons:
No down time, always either working, watching the baby, doing housework or cooking. You need to work some evenings and weekends to make it work without outside help. You feel guilty about hobbies (reading, scrapbooking) while you still have work hours to complete for the week.
I think that as long as I can maintain my sanity I will continue to love working from home. It’s important to stay flexible and treat each week as it comes, but I have enjoyed it so far and hope to continue doing so in some capacity for many more years and children to come! I will keep you posted as we experience this journey first hand and live with the ups and downs of generating income while child rearing, all from the comfort of home.
What about you? How do you handle child rearing and budgeting time for yourself? Do you work outside the home and if so how does that change the dynamic?
Reminder:You still have 1 day to get your entries in for the Don’t Feed the Alligators Giveaway!
If you liked this article, you may be interested in seeing some related articles:
A couple of weeks ago I reviewed Nudge: Improving Decisions about Health, Wealth, and Happiness by Richard H. Thaler and Cass R. Sunstein. I wanted to take some time to explore two of the big personal finance concepts in this book: Saving and Giving more later.
Nudge details a study that shows that 401(k) participants who attended a seminar on retirement savings and why they are so important were still reluctant to increase their participation in the plan. However, when presented with an option to increase contributions in the future, a large number of them agreed. A few months into the program, participants automatically started having an additional 1%-2% of their paychecks funneled into their 401(k) plans. Additional increases occurred periodically, every 6 months to a year, until the participant had reached the contribution limit. Most participants stayed in the program.
For some reason, people resist the idea of giving up money now, even if it is ultimately in their best interest. However, most have no problem with committing to contributions at some point in the future. Perhaps future money is sufficiently abstract that as long as we’re just dreaming about it, we can be convinced to do anything with it. Maybe this is why “No Money Down, No Payments for 90 Days” financing offers are so popular as well.
As I am learning in Getting Things Done, the book I am currently reading, people are too often paralyzed with the idea of starting a big project. This is because they often look at the project as a whole instead of seeing just what needs to be done next — the Next Step. I think that this is what drives a lot of the resistance to increasing 401(k) or emergency fund contributions. Most people hear that you should be saving 10% or 20% for retirement and get discouraged because they’re not saving anything. From the standpoint of 0%, 10% looks impossible.
Mathematics tells us that there are an infinite number of increments between 0 and 10. This leaves A LOT of opportunity to take the Next Step towards a savings goal. Most of us can also easily absorb a 1% reduction is gross pay, and if we can’t, then we can try 0.5% or even 0.25%. But something is better than nothing as a first step, and starting today is better than starting tomorrow.
A similar concept to Save More Later is suggested in the book for charitable contributions. Right now, ScrapperMom and I have no set plan for charitable giving. Usually the bulk of our giving ends up being sponsorships of friends and family in some walk, run, or flower sale of some kind or another. This is irregular, typically doesn’t amount to much, and doesn’t go to any charity that we actually get to pick. It’s also hard to stomach a big hit in our current spending plan. However, our daughter’s Money Savvy Pig[gy] bank has a slot marked “Donate” on it, so if for no other reason than not to be a couple of big hypocrites, we probably should start to make some effort in this direction. (Don’t get me wrong here, there are much better reasons…)
Enter the Give More Later concept. This works pretty much the same way as Save More Later. Start with whatever charitable contributions you are making now, and commit to increasing this contribution at some point in the future.
Okay, easy enough, right? Not quite. The same inertia that’s keeping me from starting a charitable contribution plan now is the same one that’s going to keep me from Giving More Later. Because if I wait until the day for which I have committed to increase my contributions, it will be the same situation as today. Fortunately, there are some easy ways to give more later. For example, I just logged into my ING Direct account, created a Charitable Giving sub-account, and then set up an automatic monthly transfer of about 0.5% of our income — to start in January of 2009. I also created a calendar entry in March of 2009 to remind me to increase or create a new automatic transfer for some point in the future. As Getting Things Done would say, I have “installed a new trick” in my finances.
Can you afford to save or give more later? Check with your 401(k) manager to see if there is an option to do this if you’ve been meaning to save more, but just haven’t been able to get around to it. If you don’t have this option in your plan, you can create a calendar entry for sometime in the future. Or you may be able to give instructions to your Human Resources department to increase your contributions for you at some time in the future, or to make contribution increases on your behalf whenever you get a raise.
Do you think a strategy like this would work for you? Do you have a better idea for how to save or give more later? Let’s hear about it in the Comments below!
Reminder:You still have 3 days to get your entries in for the Don’t Feed the Alligators Giveaway!
If you liked this article, you may be interested in seeing some related articles:
A reader recently asked me for more information about opening an ING Direct account. I have mentioned ING in the past, and recommend this bank for anyone who:
- Is looking to establish a savings account
- Wants to earn a better interest rate on existing savings
- Likes free money
- Wants to allocate separate pools of money to separate savings goals
What’s so great about ING? Well, there’s nothing particularly spectacular about any one aspect of ING, but it has a lot of really great things going for it, including:
- A rate of return far higher than the national average for savings accounts, currently 3% — although it’s not typically as high as some other online banks
- No fees
- The ability to create “sub-accounts”, which is useful for categorizing savings goals
- Anecdotally popular customer service*
- Ease of use; link your current checking account to your ING account to move money back and forth as necessary
- FDIC Insured
- Signup bonuses
So, if you have any of the desires listed at the top of the article, and enjoy any of the features listed above, then an ING account may be for you. If you would like to sign up, then you may want to act quickly. By using one of the referral links below, you will get a $25 bonus if you make an initial deposit of at least $250. That’s an instant 10% return on your money. At the same time, I will get a $10 bonus as well for the referral.
These links work just once, so if you use one, let me know so I can remove it. If a link doesn’t work, let me know and I will remove it. If there are no more links, let me know and I will add more. Contact me if you have questions or concerns. Happy saving!
ING Referral Link 1
ING Referral Link 2
ING Referral Link 3
ING Referral Link 4
ING Referral Link 5
* The personal finance blogosphere seems to agree on this point.
If you liked this article, you may be interested in seeing some related articles:
One of the keys to spending less than you earn and staying out of debt is having an emergency fund. Personal finance gurus like Dave Ramsey suggest that your very first step down the path to financial freedom is to put $1000 into a designated emergency fund. This should be done before beginning any kind of aggressive debt pay down.
We created our first official emergency fund just a couple of years ago. Before that we just tried to keep some amount of extra money available in our money market account. I don’t remember specifically how we created the emergency fund, aside from just diverting some debt reduction money towards this purpose.
To separate the emergency fund from our everyday money, I created a CD ladder by dividing the money in the fund into 5 equal parts and buying 1, 2, 3, 4, and 5 year CDs. Since then, every time a CD matures, I roll it into a new 5 year CD. This generally allows us to enjoy the highest interest rates available while still frequently providing us with liquidity to some portion of our money. I like using CDs in this way because it places a penalty on the withdrawal of the money, which makes it far less likely that we will raid this fund for anything less than a true emergency. The penalty that we would have to pay to access the money is small compared to the security that the fund provides.
So what’s the problem? When we created the emergency fund, we did so by contributing the minimum amount allowed by our bank to each CD. Since that time, we have added some additional money to each CD when it matured and rolled over, but the overall amount of money currently available for an emergency amounts to only 2.3 times our basic monthly expenses.
On the one hand, we’ve got more than the recommended amount while still paying down debts. On the other hand, we don’t have the recommended minimum of 3 months of expense for a true emergency fund, and nowhere near the 6+ months that’s really advisable, especially in a soft economy. We’re not as worried as others might be, however, since ScrapperMom is working part time, and in the event I lost or left my job, she could go to full time immediately and her salary alone would cover our needs. Nonetheless, it may not always be possible for her to work given that her first job is that of stay-at-home mommy. It’s time for us to get serious again about an emergency fund.
So where do we go from here? Well, since our Roth IRAs are fully funded for the year, that is one possible source of funding for a larger emergency fund. We would like to save more towards retirement this year, however. Another source is the extra money that we have been devoting to the aggressive reduction of the balance on our car loan. I believe that this is one of the real tricks to effective personal finance: attempting to meet several goals simultaneously. In this case, we want to increase our available emergency funds, save as much as possible for retirement, and pay off our car loan and existing business credit card. The bottom line is that we will have to compromise something to meet all of these goals, and it’s not clear to me what that should be yet.
How is your emergency fund doing? What would you sacrifice in our case — retirement savings or debt reduction? Perhaps a little of both? Or would you be comfortable for now if you were in our shoes? We’d love to hear your comments below!
If you liked this article, you may be interested in seeing some related articles:
I’m pleased to present the first ever giveaway here at Don’t Feed the Alligators. The folks at Baby Signs, Inc. have been gracious enough to provide a Potty Training Made Easy with the Baby Signs Program kit. Now I know that this won’t interest some of you, but you can always give this to friends with a toddler!
ScrapperMom has written before about our great results with the use of sign language over the last 9 months with our 19 month old daughter. Linda left a comment on that post that introduced us to the product featured below. She pointed out that you can save LOTS of money on diapers by training your toddler as soon as possible. You can find out how to enter to win at the bottom of this post.
Everything you and your baby need to make potty training fun and easy! Kit includes 5 exciting products:
- A Parent’s Guide to Potty Training Made Easy with the Baby Signs® Program This straightforward parent guide from trusted child development experts will help you confidently lead your baby to potty success. Includes illustrated Signing Glossary.
- All Aboard the Potty Train DVD With its catchy tunes, delightful animation and real kids, this exciting DVD will teach your baby five potty-time signs and reinforce each step of the potty routine.
- All Aboard the Potty Train Lift-the-Flap Book Your baby will love discovering the potty-time signs hidden under each flap in this fun and interactive board book featuring the DiaperDoodles™.
- Job Well Done! Stickers These colorful reward stickers feature fun images and positive messages such as “Good Job!”, “I’m on the Potty Train!” and “I Rode the Potty Train!”
- All Aboard the Potty Train Conductor’s Whistle Whether to signal it’s time to go potty or to “sound the trumpet of success,” this fun-to-blow whistle will put a smile on your baby’s face when it’s potty time.
ScrapperMom, Daughter #1, and I have had a chance to review the DVD and while it’s a bit repetitive for my tastes, Daughter #1 gives it two little thumbs up. In fact, she is happy to sit on her potty, and sign along with the babies in the video! It looks like she’ll enjoy the lift the flap book, and it’s not clear yet whether she’ll be able to figure out how to blow the whistle. The parents’ guide book is really interesting and points out that like so many other things in our daily lives, it’s big business (namely the disposable diaper companies) that has delayed the onset of potty training in the United States. In fact, there is a vested interest in keeping kids in diapers as long as possible.
At a $40 value, this set should keep toddlers entertained while giving Mom and Dad clear guidance on how to get started with what is usually thought of as a frustrating and arduous task. We have already ordered our own set, so you could say that this product has the Don’t Feed the Alligators seal of approval.
To Enter to Win this great set, simply subscribe to this blog, if you haven’t already, using either an RSS Reader or by email by filling out the form below. Then send me an email with the secret phrase that appears at the bottom of the post you receive via the subscription feed. Contest entries will be accepted through midnight EDT on August 15. One lucky winner will be drawn at random using a random number generator. Odds of winning depend on the number of entries. While no purchase is necessary, the folks over at Baby Signs sure would appreciate your business!
Subscribe in a reader
– OR –
If you liked this article, you may be interested in seeing some related articles:
photo figure credit: Inferis
