Boston Gal's Open Wallet

My main job when I'm a stay at home wife is to manage the money. Since I'm home, I have much more time to do money saving things, plus I don't have things like an expensive work wardrobe, gas expenses, etc. I don't think it's odd at all. :)

That said, I do substitute teach now, but only part time, only as time allows. I still consider myself a mostly SAHW.

 

I thought the same thing as Boston Gal. Wouldn't it make more sense to work and the second income would outweigh whatever you can save by carefully managing money at home and not driving/career clothes/etc.?

Also, if the husband loses his job, there would be a second income to fall back on.

Don't mean to be rude, just curious!

 

I guess I am curious about what Tara does all day. I manage all of my personal finances and I am a big rebate-filler-outer. Yet I still have plenty of time for work. I don't do the coupon thing, but I can't imagine that is a full time job. I know plenty of working mothers who also bargain shop for food with coupons.

I guess if they said she was a student or volunteer or Mother I would find it less odd. As Wanda says, I don't mean to be rude either - but I am curious.

 

I'm with Wanda and Boston Gal on this one. I found myself thinking "Huuuh??" while reading the article! It really does seem like the second income would easily outweigh any associated costs.

And it's not as if she's managing a TON of money and investments. It's a $48k income and, aside from a 401(b) and IRAs, no investments were mentioned. Their savings to buy a house is $70k in a "regular savings account." If managing this is her full-time job, she could probably work that $70k a little more, don't you think? I'm young and have a lot to learn, so I may be wrong, but that does seem like an awful lot of money to have in a regular savings account!

Another thing I found odd was that they worked really hard to pay off their no-interest car loan after a year. It must have been a 12 month term, right? Because paying it off early wouldn't make sense...

 

Hi Layne,

Yes, they could have paid off the car loan in a year because that was when the no-interest period ended. But another reason they may have done it is because they appear very debt adverse. Since they are living off one income I assume they try to keep the fixed monthly costs as low as they can. A car loan - even an interest-free one - can take a chunk out of your monthly cash-flow.

 

I will likely post over at my blog on this issue, since I've gotten so much response here about being a SAHW. I understand what you are all saying, but there are a lot of hidden expenses to working outside the home (for men AND women, this is by no means gender specific), and for me the cost of working outside the home is too much. I'll get into it later in a post. Of course, you must decide for yourself if working outside the home is for you or not. I don't have a problem with women working outside the home! :)

 

It's hard to take the article seriously when they refer, repeatedly, to a so-called "401(b)" retirement plan.

Anyone from the world of education and non-profits would know in a heartbeat that they actually are describing a *403(b)* plan

Small detail, but to me it's similar to reading an article about "402(k)" plans ...

Is fact-checking still done at CNN/Money?

 

I worked for a large corporation for 13 years. Then I took a buy-out and became a stay-at-home-wife. It's one of the best decisions I ever made. It improved our quality of life more than I ever dreamed.

I think a very important component of planning for retirement is protecting your health. They say Medicare will likely have to be scaled back when we get ready to retire because healthcare is becoming so expensive. Now I have time to cook healthy meals (where before it was grab something because I was too tired after a long day). I also have time to go to the gym and exercise every day as does my husband because I have taken some of the load off of him.

Now, instead of spending the weekends cleaning house, doing laundry and yardwork, we get to relax and actually have some fun. It takes awhile to unwind from the ratrace, but once you do it, it's wonderful.

Also, think about if you spend any time during your workday doing things that aren't really related to your job. If you pay a few bills, call the cable company or run an errand, remember that you would still have to do those things during the day even if you were home. Everyone that I know who has quit their job eventually says "I don't know how I had time to work".

 

I am a stay at home wife. I haven't worked in a job since getting married. This is for several reasons. However, the whole "what does she do all day" gets really old. I take care of the house, plan meals, take care of the finances, help my parents, enjoy hobbies, and more.

Living off one income in a two income world is tough, but I am happy to see that there are people out there who see the benefits of it. Read the Two Income Trap if you get a chance.

 

What I'm really curious about is how much tax to they pay. Granted I live in a high tax area (NYC) my taxes, social security, etc... are 40% of my income, leaving me with a 60% net. And yet these people are saving 60% of their gross.

 

I guess it's easy to take pot shots at people like this who lay themselves out there (like most of us PF bloggers!), but good for them. 60% is 60% and it's incredible.

That said, I have my own curious question: they're members of Netflix???? I guess everyone chooses to spend their precious dollars how they feel fit... and if they can still achieve 60% savings, GREAT!

 

Shame on CNN for reporting these lackadaisical, confused people as "Extreme Savers." Here are my criticisms, some of which have already been brought up:

1) Why the hell are they socking so much money into a retirement plan, but they rent a home? And a 3 bedroom home? For what? The article mentions that sell on ebay. One or both must have been extreme packrats and needed the extra 2 bedrooms for storage.

2) Paying off free interest? That's stupid. Put the money into a money market account and pay it off over the free-interest term.

3) Buying a car new? NEW? Geez...these are extreme savers...NOT!!! Everyone knows that EXTREME SAVERS let someone else eat that first year of depreciation.

4) Stay at home wife? I agree with Boston Gal. I'm a single guy, and I manage to work (which, BTW, involves extensive travel) and somehow keep my finances in order. Unless Tara is on disability, she needs to get off her butt- stop being lazy- and work during her prime years so that the income can be plowed into savings. The value of compounding will be huge. She doesn't have to work full time, or until the traditional retirement age. They just need to get her a job instead of giving excuses for being unemployed.

It just frustrates me when the mass media highlights individuals as having certain qualities that they don't truly possess. Why? Because others who may be considering a more frugal lifestlye look at this couple and think they are living positive examples for the rest of us. This is just not the case.

 

Hmm, my take on the article and subsequent comments:

- Good thing their home down payment is in a savings account. They're probably be using it within the next year, so a stable and readily accessible account is best. I might put it in a CD, but there you would lose some/all of the interest if you pull it out early (been there, done that).

- It was never mentioned how much $$ they bring in via eBay. That might help them out quite a bit. Neither eBay nor the tutoring were tallied toward the $48,000/year.

- It's hard to rent anything smaller than a 3 bedroom house. 3+ bedrooms sell best, so most people build 3+ bedroom homes. I'd bet their rent is $1000 or less a month, based on a quick look at apartments.com. Another thought: Maybe they have pets, and it was easier to find a house that would accept pets than an apartment complex.

- Netflix: I would cancel cable and solely use Netflix in a heartbeat. For $20 a month I can watch things I actually WANT to watch, rather than whatever happens to be on. Enough said.

I'm looking forward to frugal homemaker's post on the saving of staying at home. I know it's not for me - I'd go crazy without my co-workers to interact with - but I know other people feel it's very important and an essential money saver.