# Feel like we're struggling, but should we be?



## Elizabeth4 (Mar 28, 2011)

Hi there, 

Forgive me in advance if this is a bit rambling.  

I make an income of currently $88K/year, next year it will be almost $93K. HUsband is currently awaiting disability from insurance for stress leave/disability from his high-stress finance job. He was bringing in about $88K as well. Nothing right now as we are awaiting the ok from insurance.

Here are our particulars - 380K mortgage, 3.9 fixed rate for the next 4 years; 2 children under 5; I have around 60K in RRSPs, husband has about the same; we owe about 7K in consumer debt (some credit cards, LOC); car is $360 a month, finished in Nov with a balance of 8K to pay. We contribute $50/month to an RESP for our eldest son - haven't gotten around to one for our toddler.

Sometimes I think that hey, we make a pretty good income - why are we struggling? Other people seem to have it so good and easy. I know, I know - 'other' people...maybe they're in huge debt. But we don't have the fancy new toys, the blackberries, TVs in every room, game consoles every time they come out with a new version, we don't take family trips anywhere - ok, went to St. Jacob's for ONE NIGHT this last summer, but that's it...we don't have take-out regularly, or dinners out...where are we going wrong?? We have no savings to speak of (I know, it's horrible!) and with my husband currently not bringing in an income, I am starting to (ok, I have already felt it) feel the stress and burden of it all.

I guess I don't have a specific question, but are we that bad off? Is contributing 13K a year (just me) good enough for retirement? Where are we going wrong? Where is the money going??  I can't change what I contribute to the RRSPs as it is part of my contract, I have recently cut my phone/internet/cable bill almost in half, I commute daily to work which uses a lot of gas, we pay child care for both children ($400 a month for the oldest and $380 bi-weekly for the youngest).

Can anyone give me any pointers or advice on how to make the best of our situation? Or are we already ok? Am I stressing over nothing?

Thank you kindly for any consideration. 

Elizabeth


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## the-royal-mail (Dec 11, 2009)

Hi Elizabeth,

Welcome to these forums!

You are NOT stressing over nothing. You are running a family of several people and raising children. I think that is quite a job.

$7K in consumer debt is something that should be cleared away as a first priority.

You asked where the money is going. What lead to the $7K debt? What sorts of purchases caused that? That is the answer. If you want to solve that question/problem, stop buying the sorts of things that caused you to be $7K in debt. Chances are many of those things are in the landfill now while the debt is still with you.

Secondly, do you have a budget that you are following? Every one needs a budget to see where the money is going, itemize your expenses, add the income etc and then balance to bank accounts. I have an excel sheet I built many years ago on the recommendation of a friend and I follow it closely, analyzing each row and ensuring the expense is really necessary. By this approach, I was able to identify the $ bleed I once had and stop the flow of red ink.

Good luck!


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## Causalien (Apr 4, 2009)

Tax, consumer debt, mortgage and child care. Without details for one month of finances or your age, Can't really say whether or not you Are well off.


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## financialnoob (Feb 26, 2011)

Two things jumped out at me. One was the consumer debt already mentioned by the-royal-mail. You've got a high income, you say you don't spend it on fancy toys, so where does that debt come from?

The second thing was when you wrote, "Where is the money going??" Again, royal touched on it but are you budgeting? Because if you were, you should know the answer to that question.

I think a budget would be very helpful to first understand where you're spending your money, and then what can be cut. We will be starting to track expenses in April, but even setting everything up has made me realize a few things already.

I'm sure the delay in income from your husband is contributing to the stress. But I think the budget is an important thing to do. I think it will make you feel a lot more in control of your finances.


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## Oldroe (Sep 18, 2009)

I hate calling it a budget.

You do have reality's and they come in monthly and yearly bills.

So you work out your cable, hydro, phone, car payment, mortgage,heat ect. And but that amount in every pay period. Stress gone.

You work out all your yearly bills taxes, house and car insurance ect. Stress gone.

Now you have X dollars for the next stage and that's start a journal.


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## steve41 (Apr 18, 2009)

I need the age of both you and hubby as well as a desired retirement age in order to whap off a tentative cash flow.


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## Four Pillars (Apr 5, 2009)

I'm going to guess that you are 37. 

I don't think you are doing badly at all, but it depends on your husband's income.

You have a very large mortgage (as you well know). 

$120k in RRSPs is not "no savings to speak of". That's not bad.

Your unsecured debt is a problem (car and other debt totalling $15k), but that's not a huge amount either.

Why can't you increase your RRSP contribution? Is it because of a defined benefit plan?

With your hubby not working - things must be tight. If your net income is $5k? - mortgage $2k, other housing expense $500, child care $1200, gas - $300?, resp - $50. That only leaves $950 for food and other expenses - not enough.

Based on your info, I'd say you guys aren't in bad shape, but you better hope your husbands disability comes through (or he starts working again) or you might have to sell the house. Your income won't be enough.

If your husband gets disability or starts working again (sometime in the future), I would really focus on paying down your debts - start with the car, credit cards etc and then work on the mortgage. Increasing your RRSP contributions would be a good idea as well.


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## OntFA (May 19, 2009)

Elizabeth4 said:


> Sometimes I think that hey, we make a pretty good income - why are we struggling? Other people seem to have it so good and easy. I know, I know - 'other' people...maybe they're in huge debt.


Elizabeth, I would urge you to stop comparing yourself to others. Once you get a sense of where you want/need to be, then simply track your progress against that. Some people will have the ability to generate higher cash flow; some have no kids; some get help from wealthy parents; some are up to their eyeballs in debt; etc. There are lots of reasons why different people in the same age group have some disparity in their standard of living.

Don't fall into this trap of comparing yourself with others. Just focus on doing what you can to maximize the value you can create with the cash flow you have. Understanding where your cash goes - as was suggested - is a good start. You already know what you make. I would suggest getting a receipt for everything you buy for a month and put that down in a spreadsheet so you can see, in one snapshot, where you spend your money.

It's a valuable step if you are somewhat puzzled as to where you cash flow goes. For instance, simply buying a small Starbucks latte every work day adds up to nearly $100 monthly. While $100 won't make or break you, how many examples like this might be hiding in your daily life? That's what you need to find out. And posting here is a good start. Hope the various suggestions here are helpful.

Good luck.


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## Kim (Jan 10, 2011)

If your husband is at home during the day would he be able to look after the children? Is it possible for him to downsize to an economy sized car. Maybe if he is not working he could help with tracking spending / budgeting while waiting for his disability to come in.


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## Dana (Nov 17, 2009)

If your husband is home on stress leave, is it possible to cut back some or all of the child care expenses while he is at home?

If you are contributing $13k to your RRSP through your pay each year, you can re-file your tax forms with your employer to have the amound of federal tax that is deducted reduced. In effect, you would be receiving your tax refund on each paycheque instead of at the end of the tax year. This might help the cash flow a bit. 

You need to log every cent of your spending going forward so you can see where your money is going and whether there is an opportunity to cut spending somewhere.


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## GeniusBoy27 (Jun 11, 2010)

I agree with Kim. The $1200/month in child care expenses has to be downgraded at this time, and is it possible for your husband to take care of the kids (or someone to lend a hand?)

Right now, your mortgage is 4-5 times your income. That's simply not sustainable, and you have to be draining cash quickly and going into larger debt. So unless cash flow is restored by your husband either getting disability/getting some income, you're in deep trouble. You simply won't have enough cash flow.

I think you need to make hard decisions quickly. Crunch the numbers and be honest about them.


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## steve41 (Apr 18, 2009)

It is a clunky projection, but assuming your hubby never works again, you continue working til age 64, and making arbitrary assumptions about your loans (leaving them be).... for a 4% rate of return, 2% inflation, both aged 37 and dying broke at age 95, then your lifestyle (combined/constant) comes in at just over $47K annually.

I assumed no pensions or settlement for hubby's disability, so the 47K could increase. Oh.... I didn't include any further RESP investing.


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## Elizabeth4 (Mar 28, 2011)

*Thank you!*

I want to thank everyone so much for their replies - so full of wisdom - and plentiful! 

To the poster who guessed I was 37 - good guess! I am about 1 month away from that (still wondering how you guessed that?!?) My husband has just turned 38.

No, we do not have a budget.  Many times have I attempted to do one, and many times did I not follow through with it. Many times I tried to track my spending, and it only took one day of getting thrown off to throw me off the whole month. I know that it will take much diligence on my part to do this. April 1st is around the corner and I know I will have to start then. Growing up money was very tight for my family, my mother lived paycheque to paycheque (and that was living with my Grandparents rent-free!) so when it comes to money, I get very stressed about it.  

Husband cannot look after the second child while at home, he sadly is really not one of those people that can handle the stresses of looking after a child, for a huge amount of time...by that I mean, day after day. It just contributes to his stress. There is no one to help us. I will be at home this summer (still bringing in a paycheque) and looking after the kids - this will cut down on our child care expenses for those 2 months to $0. The following September it will be a combined total of about $900, so, a $300 difference from this year.

He is trying to get a software business up and running while he is at home.

We only have the one car and already traded up on this (to accomodate an infant car seat) which is why we have the $ owing in November. So I don't know if downsizing would be an option. I would be totally fine with it, though!!

I know that I should stop comparing myself to others, it is definitely a downfall!

I will get to work on a budget right away and start April 1st. I know a lot is at stake and it is very important to me. I want to thank everyone for the advice, calculations, and inspiration to get going!

Elizabeth


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## mrbizi (Dec 19, 2009)

I'm not surprised that you're feeling a bit squeezed. My wife and I currently have about the same income (we are also experiencing changes in our vocations) and it seems the same major expenses (e.g. child care), however the size of our mortgage is about a third of yours, and yet we too also feel squeezed. We also do not buy a lot toys (I'm guessing that most folks who buy these stuff buy it on credit anyway).

If your income situation does not change, you might want to consider moving to a less expensive home - that should free up your cash flow. Ignore what the banks say on how much mortgage you can afford.


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## OntFA (May 19, 2009)

Dana said:


> If your husband is home on stress leave, is it possible to cut back some or all of the child care expenses while he is at home?





GeniusBoy27 said:


> I agree with Kim. The $1200/month in child care expenses has to be downgraded at this time, and is it possible for your husband to take care of the kids (or someone to lend a hand?)


Sorry folks but couldn't help but laugh to myself reading these responses. They're certainly logical but given how stressful and difficult it can be to care for children all day long, I wouldn't have thought of putting a man on stress leave into such a stressful situation. But hey, maybe the kids are self sufficient or not real high energy kids or maybe they can keep themselves busy (if there is more than one). But this wouldn't have occurred to me given that watching kids is stressful.


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## Dana (Nov 17, 2009)

OntFA said:


> Sorry folks but couldn't help but laugh to myself reading these responses. They're certainly logical but given how stressful and difficult it can be to care for children all day long, I wouldn't have thought of putting a man on stress leave into such a stressful situation. But hey, maybe the kids are self sufficient or not real high energy kids or maybe they can keep themselves busy (if there is more than one). But this wouldn't have occurred to me given that watching kids is stressful.


I hear what you're saying, OntFA, but I think taking care of your own kids is less stressful than taking care of other people's kids. The 5 year old is likely in some kind of kindergarten program at least some of the time. 

It boils down to this: what is more stressful, parenting full-time or paying daycare costs you no longer have the income to support?


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## Four Pillars (Apr 5, 2009)

Dana said:


> I hear what you're saying, OntFA, but I think taking care of your own kids is less stressful than taking care of other people's kids. The 5 year old is likely in some kind of kindergarten program at least some of the time.
> 
> It boils down to this: *what is more stressful, parenting full-time or paying daycare costs you no longer have the income to support?*


I'd choose the daycare option (less stressful).


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## I'm Howard (Oct 13, 2010)

I suggest you documnet, accurately, your cash flow situation for the next two months.

I would then suggest which are controllable, which are not, which can be reduced, which cannot.

Forget RRSP's for now, concentrate on debt reduction.

Mortgage, can you get a better rate, can you stretch out the amortization period.

When you are up to your arse in alligators, first, you drain the swamp.


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## OntFA (May 19, 2009)

Dana said:


> I hear what you're saying, OntFA, but I think taking care of your own kids is less stressful than taking care of other people's kids. The 5 year old is likely in some kind of kindergarten program at least some of the time.
> 
> It boils down to this: what is more stressful, parenting full-time or paying daycare costs you no longer have the income to support?


I don't know if you are a parent Dana. But I am a mother and have cared for my own (obviously) and have watched others' children. For me, watching others' is less stressful. Everybody's different but I can speak from first hand experience - albeit only mine and from speaking to other parents - that while spending time with your children is wonderful it can also be stressful and emotionally draining.

It may not be the case here and it may be that Elizabeth's husband would find caring for their children low stress compared to his job. But if he's so stressed out that he may get disability benefits, I suspect that he's not up to caring for the kids, at least not yet.


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## Dana (Nov 17, 2009)

OntFA said:


> I don't know if you are a parent Dana. But I am a mother and have cared for my own (obviously) and have watched others' children. For me, watching others' is less stressful. Everybody's different but I can speak from first hand experience - albeit only mine and from speaking to other parents - that while spending time with your children is wonderful it can also be stressful and emotionally draining.
> 
> It may not be the case here and it may be that Elizabeth's husband would find caring for their children low stress compared to his job. But if he's so stressed out that he may get disability benefits, I suspect that he's not up to caring for the kids, at least not yet.


I have two kids, 8 and 5 years old. I stay home full time as well as manage our investment properties on a part-time/sometimes full-time, as-needed basis. I have a husband whose job involves frequent travel. Since we have no family locally, any babysitting help we receive we have to arrange with our families in advance and since they all have their own lives they have limited availability. I am in 'single parent mode' quite often, so I do know of which I speak. 

My heart goes out to someone dealing with issues related to stress and who is unable to work, but that doesn't mean they have a "right" to daycare that they can no longer afford. I have had colleagues on stress leave who have been approved for child care coverage through their insurer because they have been assessed as being unable to cope. So, if he is unable to cope with the stress of caring for his own children, perhaps they should look into their benefits for this.


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## kcowan (Jul 1, 2010)

I would mothball all your CCs and any buying on time. Put the after tax monthly amount of your income in one chequing account and pay all bills out of that account. You may have to adjust the tax withheld. That is the simplest way to live within your means.

Until the disability comes in, cancel cable and downgrade your phone service. Call it vacation disconnect. We do that once a year. You can also downgrade Internet to dialup or vacation status.

What revenues are you planning for husband's software business? Until you start getting disability cheques, stop all expenses on that business.


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## marina628 (Dec 14, 2010)

The one thing that screams at me is no emergency savings or any mention of savings.Big mortgage and Small kids dealing with an illness is not a good situation.If it were me I would consider downsizing the house .Also you were earning over $170,000 a year until your husband got sick.How long ago did his income get cut off? I think you need to sit down and do a extremely tight budget ASAP and get some Jars out!


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## steve41 (Apr 18, 2009)

OK... we guessed the ages fairly closely. As mentioned this is an ugly projection and it depends on two important assumptions. Firstly, you have got to be very comfortable in your desire and ability to continue to work at your current job and that you are happy working til age 65. Secondly, your husband is not contributing anything (partial employment, settlement funds....) to the enterprise.

This plan looks workable and some of the numbers seem counter intuitive, however it does work. It means robbing your RRSP near term to make those mortgage payments however. If your hubby will in fact be contributing to the household (partial salary or a nice fat settlement) then the plan will be much more balanced. As it is, it delivers a $47K net income to the household out to age 95 assuming a 4% rate of interest. That is close to $4K per month.

Mr Struggling
Mrs Struggling


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## Four Pillars (Apr 5, 2009)

Elizabeth4 said:


> ...
> 
> To the poster who guessed I was 37 - good guess! I am about 1 month away from that (still wondering how you guessed that?!?) My husband has just turned 38.
> 
> ...



I guessed it because I'm a friggin genius. Now I'm off to buy a lottery ticket. 

Seriously, your high incomes indicate that you are probably older, rather than younger. Your youngest child's age indicates that you are probably not yet in your forties. Hence the 37 year old guess.


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## Brian Weatherdon CFP (Jan 18, 2011)

Hi Elizabeth, awesome comments above I'm sure you agree, and kind people with many ideas. What I'm noticing though is that we're guessing your age, and saying "if" this and "if" that.... Then I realize we're guessing in the dark.

Some advisor, in or near your own community, would want to listen to you directly. It may start with speaking together for an hour or so to really get a grip on what's been happening for you. 

Right now, we're not really "*listening*" but guessing and posing possibilities as best we're able, with some good gems of guidance you can use (like budgeting etc).

By the way it's true; you really can't make progress by comparing yourself with others. Everyone's circumstances are so personal. Yet by and large I feel you've done well up to this point......and you just want to ensure the future can continue getting better for you! 

_Tiny item I hesitate even to mention: your 50/m RESP is optional isn't it. I ask parents, "What is your children's greatest source of financial security for college...?" They ask me if I mean RESPs. I answer, "No, children's financial security is having financially secure parents." In other words RESP could be on a back burner for awhile. But at 50/m it's a tiny issue._


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## Causalien (Apr 4, 2009)

Elizabeth4 said:


> I want to thank everyone so much for their replies - so full of wisdom - and plentiful!
> 
> To the poster who guessed I was 37 - good guess! I am about 1 month away from that (still wondering how you guessed that?!?) My husband has just turned 38.
> 
> ...



You should do this Elizabeth.

Go to mint.com and sign up. Enter all your banks and credit cards. Wait one month and you will have spent only about 10 minutes to track your spending forever.

You might be reluctant to embrace this intrusion to your privacy, but you can ask around others on this forum on the reputation of mint.com Being a high earner like you and your husband. Time is more precious than money.


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## the-royal-mail (Dec 11, 2009)

Causalien said:


> You should do this Elizabeth.
> 
> Go to mint.com and sign up. Enter all your banks and credit cards. Wait one month and you will have spent only about 10 minutes to track your spending forever.
> 
> You might be reluctant to embrace this intrusion to your privacy, but you can ask around others on this forum on the reputation of mint.com Being a high earner like you and your husband. Time is more precious than money.


I completely disagree with this advice due to our recent discussion about mint.com security issues. Please seek out that thread and read up.


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## the-royal-mail (Dec 11, 2009)

Brian Weatherdon CFP said:


> _Tiny item I hesitate even to mention: your 50/m RESP is optional isn't it. I ask parents, "What is your children's greatest source of financial security for college...?" They ask me if I mean RESPs. I answer, "No, children's financial security is having financially secure parents." In other words RESP could be on a back burner for awhile. But at 50/m it's a tiny issue._


Thank you for saying this. 100% agreed. I honestly do not understand parents who are in over their heads with their finances putting aside money for their children. Pay yourself first and follow the CFP's advice. Suze Orman also says the same thing: take care of yourself first before taking care of others. In the case of children, the more secure you are financially, the more secure they will be.


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## financialnoob (Feb 26, 2011)

Elizabeth4 said:


> No, we do not have a budget.  Many times have I attempted to do one, and many times did I not follow through with it. Many times I tried to track my spending, and it only took one day of getting thrown off to throw me off the whole month. I know that it will take much diligence on my part to do this. April 1st is around the corner and I know I will have to start then.


I wish you all the best with this. My wife and I will also be doing our first budget starting April 1 as well.

One thing I'd suggest is not being obsessed with being perfect to every single cent. The goal of the budget is to identify where your money goes, and ultimately, how to control it. 

Don't let one missed day throw you off. Create a miscellaneous category if you have to for small things like grabbing a pop or a snack here or there. Use your debit card whenever possible so you have a record of it on your bank statement. I'd suggest tracking it daily, as you may see trends emerging well before you reach the end of the month. Keep all your receipts and write on them with a pen if need be.

So if you miss a transaction here or there, don't fret or give up. And if you have a significant amount end up in the "miscellaneous" category, that will still tell you that a lot is being wasted on stuff you can't even remember, which is probably a good sign that you can start chopping it.


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## Elbyron (Apr 3, 2009)

the-royal-mail said:


> I completely disagree with this advice due to our recent discussion about mint.com security issues. Please seek out that thread and read up.


I would agree with staying clear of mint.com, or any service that requires you to give them your bank account login details. However, that doesn't mean you have to use archaic budgeting methods like spreadsheets or [horrified gasp] counting up receipts by hand. There are some good services out there that will let you manually import your electronic data from your bank and credit card. I used to recommend MoneyStrands, but now they're charging fees if you want to be able to keep more than 6 months of history. 
So I switched to Buxfer.com, which has most of the same features (perhaps a bit clunkier) and their mobile offerings include Andriod as well as iPhone - thus making it very convenient to enter cash transactions as I spend it. And by using manual accounts you never need to provide any bank details or even use your real name... everything can be kept fully anonymous so there's no danger if their system were ever to be hacked. 
I would highly recommend to Elizabeth that she give it a try - you'll find that it's a lot easier than you thought to track where your spending is going, and create and adjust your budget to fit your financial situation. It even helps you stick to your budget by sending alerts to your mobile device.


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## Spidey (May 11, 2009)

"_Husband cannot look after the second child while at home, he sadly is really not one of those people that can handle the stresses of looking after a child, for a huge amount of time...by that I mean, day after day. It just contributes to his stress. There is no one to help us. I will be at home this summer (still bringing in a paycheque) and looking after the kids - this will cut down on our child care expenses for those 2 months to $0. The following September it will be a combined total of about $900, so, a $300 difference from this year.

He is trying to get a software business up and running while he is at home._"

I know your husband is stressed, but even though I'm a guy I'm having a lot of trouble with this. For one thing, most parents with children under 5 are stressed. You're the one working and it sounds like the bulk of the child care still falls on your shoulders. You are paying out $1200 a month for another person to take care of your children when their father is sitting at home. Your husband is too stressed to take care of his own children yet is about to embark on starting his own business -- usually one of the most stressful ventures imaginable. Has he considered how much less stress it may bring both himself and your family to have an extra $1200 per month, not to mention avoiding the gas costs and trips back and forth to daycare? That would pay off both your consumer loan and car loan in about a year! Then perhaps half could go to mortgage or investments and the other half could go to something nice like dinners out (and baby-sitter) and vacations. There could even still be enough for perhaps a 3 hour day-care or play-group to give your husband a mid-day break. 

Perhaps there is something I'm not understanding, such as a diagnosed case of severe clinical depression and if that's the case I apologize for the criticism. Otherwise, I think it's time for your husband to accept a little responsibility.


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## Kim (Jan 10, 2011)

Thank goodness someone else said it first - I was thinking the same thing.


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## Helianthus (Oct 19, 2010)

Spidey, thanks for saying what many others were likely thinking.


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## Dana (Nov 17, 2009)

Helianthus said:


> Spidey, thanks for saying what many others were likely thinking.


+1


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## the-royal-mail (Dec 11, 2009)

I think we all owe the OP a chance to respond. There may be a very good reason the hubby isn't prime for taking care of the kids. 

OP?


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## Four Pillars (Apr 5, 2009)

I think she already answered this:



Elizabeth4 said:


> ...
> 
> Husband cannot look after the second child while at home, he sadly is really not one of those people that can handle the stresses of looking after a child, for a huge amount of time...by that I mean, day after day. It just contributes to his stress.
> ...


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## HaroldCrump (Jun 10, 2009)

There is something else that doesn't add up here.
The husband has filed for a disability claim based on mental stress.
Supposedly, the disability payments will start soon.

However, he is starting a home base software business?
That raises questions about the disability claim itself.

Secondly, assuming that the business up and running, shouldn't the disability payments cease at that point?
It appears that the disability insurance is similar to EI, no?
If so, the requirement should be that the recipient not be engaged in any other job/activity for the duration of disability.

I'm not judging the OP's decisions or anything...it just seems that we don't know the whole story (yet).


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## the-royal-mail (Dec 11, 2009)

Good point Harold. But in general terms you are correct. It looks to me like this couple is in over their head financially, the stress got to the husband and now they are frustrated due to the loss in income. So the home based software idea came up. It might just be a part time thing, who knows, but there is still tremendous financial pressure here even if he's on disability. That's probably why the kids are too much.

OP?


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## Dana (Nov 17, 2009)

HaroldCrump said:


> There is something else that doesn't add up here.
> The husband has filed for a disability claim based on mental stress.
> Supposedly, the disability payments will start soon.
> 
> ...


I think there may be a distinction with disability insurance vis a vis being unable to perform your current occupation and being able to perform any occupation. We looked into private disability insurance several years ago (expensive!) and this distinction had a big effect on the premium. If we were not able to perform our current occupation, we would receive a benefit equal to the difference between our new lower paying occupation and our previous salary. Does that make sense? Maybe there is an inurance specialist out there who can clarify.


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## Four Pillars (Apr 5, 2009)

the-royal-mail said:


> Good point Harold. But in general terms you are correct. It looks to me like this couple is in over their head financially, the stress got to the husband and now they are frustrated due to the loss in income. So the home based software idea came up. It might just be a part time thing, who knows, but there is still tremendous financial pressure here even if he's on disability. That's probably why the kids are too much.
> 
> OP?


I think you are starting to write their story for them. 

Bottom line is that you can't work on a business and look after a kid at the same time - not possible. 

If he's going to start the business, the kid needs to be in daycare. I'm not saying this is the best strategy overall all, but those two things have to go together.


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## MoneyGal (Apr 24, 2009)

Dana said:


> I think there may be a distinction with disability insurance vis a vis being unable to perform your current occupation and being able to perform any occupation. We looked into private disability insurance several years ago (expensive!) and this distinction had a big effect on the premium. If we were not able to perform our current occupation, we would receive a benefit equal to the difference between our new lower paying occupation and our previous salary. Does that make sense? Maybe there is an inurance specialist out there who can clarify.


The distinction is "own occupation" disability insurance (very expensive) versus "any occupation" disability insurance (relatively cheap).


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## I'm Howard (Oct 13, 2010)

I could never look after a child, I never changed a diaper, and if that doesn't suit some, too bad.

Some people are just not programmed to interact with young infants, nothing to do with responsibility, it is more that some of us just are not programmed that way.

I certainly played a very active role as they matured, fortunately, my wife loved the Infant stage, I liked the growing up stage.

Almost fifty years later, kids, responsible University Grads, self sufficient, zero problems in their teens, couples work out things differantly, but no one should take a holier than thou attitude.


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## rookie (Mar 19, 2010)

with 2 kids at home, i would definitely chose to go with a nanny. not only is it cheaper than daycare, a lot of household chores will also be done (less stress for you and hubby). especially if dad is going to stay at home and can manage to teach the kids a few things for a couple of hours a day, nanny is the best option IMO


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## marina628 (Dec 14, 2010)

My husband and I both work from home and we have always had to employ a full time housekeeper to cook ,clean and take care of the kids so we can be productive at our jobs.I have a permanent Physical Disability so I have limitations as well .I will take my Physical Disability and need for a wheelchair any day over having any emotional /mental issues.
I would also live in a tiny rental than have the big house/mortgage if we had financial stress which was causing issues for any of my family members.


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## Jon_Snow (May 20, 2009)

My wife and I bring home almost double the income of the OP, yet I would still be terrified to have a mortgage of that size. I would focus on that albatross if it were my own situation. Then again, we are so debt averse, it borders on paranoia... I'm sure that mortgage isn't really all that big to most folks.


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## Four Pillars (Apr 5, 2009)

Jon_Snow said:


> My wife and I bring home almost double the income of the OP, yet I would still be terrified to have a mortgage of that size. I would focus on that albatross if it were my own situation. Then again, we are so debt averse, it borders on paranoia... *I'm sure that mortgage isn't really all that big to most folks.*


It's huge!


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## financialnoob (Feb 26, 2011)

I'm Howard said:


> I could never look after a child, I never changed a diaper, and if that doesn't suit some, too bad.
> 
> Some people are just not programmed to interact with young infants, nothing to do with responsibility, it is more that some of us just are not programmed that way.
> 
> ...


That's a good point.


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## HaroldCrump (Jun 10, 2009)

Four Pillars said:


> It's huge!


Size is a matter of opinion 

But if we regard the number as only a number, it's not uncommon at all.
I don't know where you live, FP, but anywhere in the Greater Toronto and nearby areas, most first time home buyers these days have mortgages in this range.
With relatively new single family detached homes costing well upwards of $400K and often more than $500K (areas like Oakville, Mississauga, etc.) a $380K mortgage is not that uncommon.
Plus, the 0% down, cashback, low interest rates, and other such financial insanity perpetuated by the RE industry and banks (in collusion with the govt.) has further exacerbated the situation.
Many folks we know have mortgages in this range.

We bought our home before the real madness started and we put 25% down.
Therefore, we have been blessed with a smaller mortgage and have been aggressively paying it down.
It is still bigger than I'd like, and it will remain bigger than I like until it is $0.
But most people don't see mortgages as an issue and don't lose a wink of sleep with a $380K mortgage.


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## Four Pillars (Apr 5, 2009)

HaroldCrump said:


> Size is a matter of opinion
> 
> But if we regard the number as only a number, it's not uncommon at all.
> I don't know where you live, FP, but anywhere in the Greater Toronto and nearby areas, most first time home buyers these days have mortgages in this range.
> ...


You're absolutely right. Big mortgages are the "new normal".

It really depends on income as well. We are a single income family, so when we ended up with a $240k mortgage about five years ago, it was quite scary. I sleep much better now that it is $45k and will rejoice next year when it is $zero.

The fact is that the OP was in pretty good shape when they had two incomes. $390k mortgage on $170k of income is acceptable in my opinion.

Unfortunately, they didn't take advantage of their income and still overspent - but that's a different issue.


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## Kim (Jan 10, 2011)

*This might belong in General Topics*

Had to wonder what that meant for me when above posters mentioned being programmed. 
I am pretty sure when I was born I wasn't programmed to drive, cook, clean, look after kids, look after cows, fix the tractor, dig holes, learn about my finances, ,manage an office, hire employees, fire employees, sales, marketing etc etc etc.
I was programmed to be spoiled, pampered and lavished with expensive gifts  . 
Never worked out so I got some new "programs" that allowed me to continue functioning in the world that I was in. (this was all written while smiling )

And in regards to OP, since I am not in her shoes I can't know exactly what her circumstances are and so although I might think some things after reading her post, I respectfully know that I am in no position to give advice. Things will hopefully get better.


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## financialnoob (Feb 26, 2011)

Kim said:


> Had to wonder what that meant for me when above posters mentioned being programmed.
> I am pretty sure when I was born I wasn't programmed to drive, cook, clean, look after kids, look after cows, fix the tractor, dig holes, learn about my finances, ,manage an office, hire employees, fire employees, sales, marketing etc etc etc.
> I was programmed to be spoiled, pampered and lavished with expensive gifts  .
> Never worked out so I got some new "programs" that allowed me to continue functioning in the world that I was in. (this was all written while smiling )
> ...


True, but sometimes programs crash and screw up your entire computer. 

I do think you have a valid point, but I think some of the posters (not you) were going beyond advice and into the realm of extreme judgment on a guy who had to quit his job due to stress is all. Without knowing the entire circumstances, just seemed a bit unfair.


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## Elizabeth4 (Mar 28, 2011)

*Thank you for all the responses!*

Wow, so many posts, I do not know where to begin. I think I will just enter some comments as they come to me.  

- my husband has been diagnosed with depression. Also, if it helps, I have always struggled with it myself, but am able to cope with parenting. My depression is under control. He can cope, but for a short amount of time. I really feel that, knowing him, he would not be able to be a full time caregiver - ESPECIALLY to our 18 month old. He is definitely not an infant person, and is much more enjoying our oldest son as he can interact with him a lot more. 

- next year both my children will be in full time school - the youngest in a preschool. Background: I am a teacher at a private school and get a pretty good discount on tuition, which ends up being better i fnot the same as daycare for both and includes care from 8 to 6 if needed.

- Yes, our mortgage is large, but compared to everyone else I know, it's just about the same. We do live in the Greater Toronto Area and houses are not cheap. Relocation is not an option. We already made the choice to move out of Toronto proper to save money when purchasing a house.

- My husband has not spent much money at all, if any, on expenses for his new business that he is trying to get started. It is using everything that he has already, for the most part.

- being a teacher, I get the summers 'off' and that is when I will be paying $0 for tuition and daycare costs. This will save me about $2400 this summer. The summer will be spent doing low-cost things or free things.

- I will reconsider the $50 contribution to the RESP, that is definitely food for thought. I know it is small, but money is money. 

- I have already downgraded many of the items - phone, internet, cable. Maybe it sounds selfish, but hubby will not give up tv and the internet is needed for his line of work, so a slower speed (like dial-up) won't cut it.

- my husband is only playing around with some ideas for a business - nothing is registered, it is not a 9 to 5 venture - this is something that he is doing that makes him feel good while he is on stress leave. He is not in the process of (nor does he plan to) defraud the government. His job that he is currently on leave from, is a high-stress, no family-time, blackberry on 24 hours a day kind of position. He does hope in the future to leave this job, but, for the interim, while he cannot handle it, he wants to make sure that he has some skills or something to offer in the event that he does choose to leave

- my husband cannot handle kids, especially young ones - his stress levels are way to high right now anyway, and looking after children that are your own is NOT the same as looking after other's children. I should know - I am a teacher - of young children, too. My days are stressful, yes, but come summer time, even though I will be with my own two children, I can tell you that it will often be more stressful than working with 20 kids. Do I wish it was different? That he could 'handle' full-time parenting? Sure! Is it different? No. Then I have to live with the way life is, don't I. It is what it is and you work around it.

- I know that we should have an emergency fund and I am hoping to implement putting aside some savings soon. 

- I am currently saving all receipts - no matter how small - and husband and I will be sitting down this weekend and working out a budget, and/or a financial spreadsheet.

- I want to thank Steve41 for posting that pdf file. I am going to go through that soon!!  

- we are hopefully going to be meeting with a financial planner in the near future - first contact has already been made.

I think those are all the comments that I can make right now. Again, I appreciate everyone's thoughts, advice, and criticism.  

Elizabeth

-


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## Four Pillars (Apr 5, 2009)

Thanks for the update, Elizabeth. You're right that you have to live the life you're given (to some extent).

Any update on the disability insurance? That is really the main dividing line between you guys being "ok" (but should start saving more) and being on the edge of financial trouble.

I would also urge caution about a financial advisor. Most advisors make money from investment product commissions, which generally means they aren't suited to give advice on things like budgeting, paying down debt etc. I'm not saying they don't have the ability or knowledge, it's just that they don't make any commission from you paying down debts.

If you are looking for investing advice, then an FA might be a good choice, otherwise maybe consider a financial coach who can take a more holistic approach to your situation.


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## marina628 (Dec 14, 2010)

I think Elizabeth needs budgeting advise and think buying quicken may be a better thing that trying to go to an adviser at this point.Tackle the debt first but put aside some savings each month for emergencies.I agree cable and interest probably is not an option and with small kids probably saves you quite a bit on entertainment bill.If you are prepared to have a rough couple years til kids are in school full time then I am sure you can manage to hang on to the house.
Your husband's venture will not be considered a business until he is up and running and turning a profit so would not worry about cra.

Best of luck

Marina


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