How Many Lives Do You Touch?

Josh at Becoming Minimalist had a very thought-provoking post earlier this week about influence and how people are constantly striving to have more of it. The main idea of his post is that each of us already has a ton of influence.

Doubting Our Influence
It’s easy to fall for the belief that we are all just one little gear in the machine of life. It’s easy to believe that our individual actions do not have an impact on the world around us. With more than six billion people on the planet, that belief is certainly understandable. Maybe it’s just the lazy way out, but we often downplay our importance and use this to rationalize our decision to not be that positive, uplifting presence.

You Touch More People Than You Think
However, using the analogy of being a gear in the machine, you don’t have to actually touch every other gear to have an influence on them. Think about it. If you greet the person at the coffee shop with a smile and ask how their morning is going, if you hold the door open for someone at work, if you come home and give an encouraging word to your spouse, help your child do their homework or learn a new concept, and send a friend an encouraging message on Facebook (or even better, on the phone), that adds up to five influential actions. That’s five other gears that you’ve put into motion. And who knows how many other gears each of those will touch and put into motion, all as a result of your actions. There’s a new television show on Fox called “Touch” that does a pretty good job at illustrating this concept. One action done at the right time can trigger a series of events and have a positive influence on a whole chain of people.

The Ultimate Influence
Our little boy is now just over a year old. At this point in his life, virtually everything he learns is from my wife and me. As parents, we have a tremendous influence on our children. Consequently, we have a (smaller) influence on every single person our children will come into contact with. When you think about it that way, it’s easy to see how important it is to be an example of compassion, responsibility, integrity, and hard work. You may never actually meet the people you end up influencing; just know that you are making a difference.

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Happy Mother’s Day

I told our little Tyler that it was Mother’s Day and asked what he’d like to do

He said that mommy deserves gold and diamonds, or at least to go on a cruise

I told him mommy certainly deserves that, but those are things we cannot really do

So he said he would write a poem, straight from him to you:

Mommy,

Thanks for all the things you do
For feeding, bathing, and changing poo

Thanks for staying home with me
And being the best any mommy could be

I know taking care of me all day makes you tired
And sometimes when it’s time for bed I’m still really wired

Just know that with all you’ve done and all you do
I’m lucky to have a mommy like you

Happy Mothers Day!

Our Parenting Mission Statement

I’ve mentioned on here several times that my wife and I have a little boy who just turned a year old last month. Well, while we were expecting our baby boy’s arrival, I stumbled upon the idea of having a parenting mission statement. Much like a company’s mission statement, our parenting mission statement presents our guiding principles and hopeful results of what we will strive to do and achieve as parents. Any new parent knows that it is an awesome responsibility, and my wife and I take it seriously. Below is our parenting mission statement, which we printed, signed, and have posted on our refrigerator. In full disclosure, I did not write all of this. I found a great example online that I absolutely loved. I couldn’t write a better one, so I just changed bits and pieces here and there.

Our Parenting Mission Statement
We will work together as partners for the best interests of our children. We want them to be functioning, responsible, healthy, respectful, content, and headed towards a purposeful life. We want them to enjoy childhood, full of memories and traditions. We will do whatever we can within our power to provide the environment they need to achieve that: with loving structure, natural and realistic consequences, shelter, stability, nurtured individuality, and an environment that encourages safe learning. We will strive to have an environment with respect and nourishment – physically, mentally, emotionally and spiritually, so that they may experience the fullness of life and their own individual potential.

Though we may not always agree, we will work to present a united front, postponing decisions on discipline until we have time to not only rationalize, but to communicate and reach a mutually acceptable decision.

We will strive to listen to all sides of a conflict, independently and without interruption, so that we may make the best choice for the child involved. We will also work to recognize each child’s personality, their strengths and weaknesses, and how to approach and parent them effectively without letting our own preferences in parenting influence us. Every child is different and responds best to techniques tailored to them.

We will be open to discussing any and all matters regarding our children so that miscommunication and tension are minimized. Each of us will strive to parent the children to the best of our ability and care for them completely. We will not allow ourselves or anyone else (children included) to treat or speak disrespectfully to either of us.

We agree that when we discipline, it will be fair, consistent, and agreed upon. We will also ensure that the child is informed that the discipline a result of the behavior or decision, not because of the child as a person.

We also agree that if a mistake is made, we will first allow the parent who made the mistake to correct it, and then have it gently and positively reinforced by the other parent, to the children. We will both strive to be an understanding, consistent and stable person in our children’s’ lives, and make sure that they know that we will be there for them.

We will not undermine or otherwise create the appearance of division to the children, and if we do, we will strive to reinforce our unity to them as soon as possible.

We will work together to be the head of our household and to allow our children to be children. We will work to create a safe environment for our children, guided by structure and predictability.

The Mini-Max Rule

I remember back in my college sociology class, the professor mentioned something called the “Mini-Max Rule”. It’s practically universal and works something like this: when people are faced with a choice, they tend to make the decision that they believe will minimize their cost and maximize their benefit. This principle is one of the primary drivers of every choice that people make. It’s surprisingly simple, but it was kind of an eye opener at the time. Even though a lot of times people end up making bad decisions, their thought process at the time of the decision was such that they believed the benefit would outweigh the cost.

One of the biggest challenges I face (and I’m assuming many others face as well) in managing the family finances is finding the right balance between saving money and saving time. I strive to “minimize” the amount of time spent and “maximize” the amount of money saved. I know that I could potentially save more money on things by spending more time on them. But time is at such a premium that I feel like I should really protect it. Last time I checked, there are still only 24 hours in a day, and I don’t want to shortchange my wife and baby to save a few bucks here and there. These decisions will be different for everyone as we all have varying thresholds of what we consider “worth it”, but here are some examples of our decision-making.

Insurance
Last year I shopped around for new homeowners and auto insurance. I had been happy with my insurance with Allstate. I had used them for my auto insurance since high school, and I really liked my agent. I didn’t think my rates were bad. I know there are those out there that swear by shopping around every year to make sure you’re getting the lowest rate, but I was happy with what I had. To me, I didn’t think it was worth it to spend a few hours online getting rate quotes at a bunch of websites to find a somewhat lower rate. (Time required greater than savings generated)

But last year my Allstate agent retired and sold his practice, and my policies were being moved to another office. At this point, my reason for staying was gone (my agent), and I did think it was worth it to shop around for insurance. I ended up saving around $200 a year on my homeowner’s insurance and about $50 a year on my auto insurance. But even with this, my strategy was to call an independent insurance agency and have them do the hunting. (Time required less than savings generated)

Coupons
I know there are people out there that go “coupon crazy” and to some it’s worth it. Personally, that’s not for us. We do use coupons, but we don’t spend a lot of time collecting them. To spend multiple hours a week finding coupons (both in the newspaper and online), organizing and sorting through them, and checking through the grocery list to make sure we buy the items with coupons, all to save $10 a week or so isn’t worth it to us. (Time required greater than savings generated)

I’d rather just buy the generic brands at the store and save a similar amount. (Time required less than savings generated)

One-Time Household Tasks
The things I love are the one-time tasks that continually generate cost savings.

Almost every light bulb in our house is a CFL bulb. These do have a higher upfront cost, but they last far longer than regular incandescent bulbs and use far less electricity. Some don’t like the lighting put out by these bulbs. For us, we’re so used to them that it doesn’t bother us. (Upfront cost and time required far less than savings generated over the life of the bulb)

One of our bathrooms has a low-flow shower head, and our kitchen sink has a low-flow aerator on it. As a result, they use less water than standard ones do. Since we are on municipal water, this has a direct effect on our monthly water bill. I should replace our other sinks and our other shower head with similar fixtures. The upfront cost is a bit high, but the installation time isn’t too bad. And over the years, the cost savings really add up. (Upfront cost and time required less than savings generated)

Your Stories
What are some of the choices you make between time spent and money saved? Share your story in the comments below…

Is It Still Possible To Raise A Family On One Income?

In today’s economy it has become increasingly difficult to raise a family on a single income. The costs of raising a baby are quite high, and when you add those on top of your normal monthly expenses it can be too much for one parent to support on his or her income alone. But it is not impossible. If having a household with a stay-at-home parent is a high priority for you, it can be done. And you don’t need a six-figure income to do it (depending on where the cost of living is for your location).

Our Decision
Before my wife and I started trying for a baby, we already knew that she wanted to be a stay-at-home mom until our child starts school (at which point she would re-enter the workforce). We didn’t want to send our child off to a day-care all day while we were at work. However, we knew that it would take preparation and some lifestyle changes to be able to do this.

My Wife’s Job
One of our deciding factors was the fact that my wife’s job as an entry-level dental assistant did not pay enough (in our opinion) to make it worth working and paying for daycare. The average pay for a dental assistant with between 0 to 2 years of experience in our area is between $11 and $13 dollars per hour (or roughly $22,000 to $25,000 annually). But even looking at the high end of that range ($25,000) her true earnings would be a lot less than that. There are a lot of costs associated with her working while we had a baby:

– Federal, state, and local taxes ($5,000). This is calculated at 15% federal plus 5% state and local.
– Social Security & Medicare ($1,912.50). This is calculated at 6.2 for social security and 1.45% for Medicare.
– Gas for the trip to work and back ($468.00). This is calculated at today’s gas price of $3.79 a gallon, gas mileage of 20 mpg in city driving in my wife’s vehicle for 10 miles per day for 48 weeks.
– Depreciation and maintenance on her vehicle ($120). This is calculated at $0.05 per mile for general vehicle depreciation, oil changes, wear on tires, etc.
– Clothing and shoes for work ($200). This includes scrubs and good shoes.
– My wife typically brought her own lunch, but if you ate out with co-workers every day this would easily add up ($1,200). This is calculated at $5 per meal per day for 48 weeks.
– We would most likely eat out more meals, since there would certainly be days where neither my wife nor I felt like preparing a meal after working all day and then taking care of a baby in the evening ($2,080). This is calculated at $20 a meal two nights a week for 52 weeks.
– Daycare for the baby ($5,250). This would cost around $6,000, but $5,000 is tax deductible and reduces the total cost.

After subtracting these expenses, you’re only taking home $8,770 from that $25,000 job. This is roughly equivalent to $4.57 per hour. To us, having my wife stay at home and raise our little boy was worth more than the $4.57 per hour she could be bringing home by working.

Making it Work
There are a number of conditions that have to be met in order to raise a family on one income.

Have Money Saved: One thing we did before trying to have a baby was to save up enough money to cover all the expenses related with having a baby, plus some of the money associated with the first year costs of raising a baby. This really helped us avoid feeling financially strapped right away from having a baby.

Monthly Income: The parent that does work needs to make a decent income. This will obviously vary depending on what part of the country you live, and this is one of the advantages of living in the Midwest. Our cost of living is fairly low, and if one parent earns close (say, within $5,000) to the median household income of around $50,000, you could be able to make this work. However, there are a lot of other points to factor in as well, as you could get by with earning less if your monthly expenses are low.

Debt Payments: This is probably the most important point. The more debt you have, the more of your monthly income has to be allocated to those payments. If you have two new cars with payments, a huge mortgage, and a pile of credit card debt, you will need a much larger income to get by with only one parent working. When we had our baby, we had our mortgage payment and a small student loan payment. We had no vehicle loans and no credit card debt. In the year since then we have needed to replace one vehicle, but we purchased a nice used vehicle with a very manageable payment. This is one of those lifestyle changes I mentioned above. Having my wife stay at home with Tyler is more important to us than the status of having a fancy new vehicle.

Recurring Monthly Payments: Besides debt payments, you need to really take a look at all of your regular monthly payments. Are you spending $200 to $300 a month eating out? How much are you spending on satellite/cable, and can you scale back to a more basic package? Living on one income means you will need to find ways to cut back on these expenses. But it does NOT mean that life has to be boring. That little baby gives us more enjoyment than going shopping for the latest fashions or tech gadgets. And there are a lot of things you can do that don’t cost a thing. You can get books from the library (even to download to your Kindle), go for walks in the park, have friends over for dinner and games, etc.

Priorities: Like I mention above, living on one income has a lot to with changing your spending priorities. My wife and I decided that it was more important to us for her to stay home with the baby than it was for us to have new vehicles, go out to eat, or spend money on new “things”.

The Bottom Line
If it is a high priority for your family to have a stay-at-home parent, know that it is possible. Try to plan ahead and pay down those debts early to alleviate your monthly cash flow. Review all your monthly expenses and see where you can cut back. I hear a lot of people say they wish they could stay at home with their babies, and I think some of them could do just that if the really made it a priority.

Can Buying a Zoo Pass Save Money?

With my wife being a stay-at-home mom, she’s always on the lookout for things to do with Tyler. Now, our little boy is only a year old, so the options for activities are fairly limited. One thing we decided to do this year was to buy a family zoo membership. I remember going to the zoo as a child and watching the animals (I’ve always been a fan of monkeys). It was always fun, and I enjoyed it.

I fully realize that our 1-year-old son isn’t going to totally understand the zoo, but he looks around and watches everything. He sees the animals and starts babbling. Right now, he calls just about anything with four legs “dog”, but in time he’ll learn. Taking your kids to the zoo is one of those things that I believe is under-appreciated today. I mean, the zoo can be an educational wonderland for kids (and without them even realizing it). It engages the kids and encourages curiosity and learning. As Tyler gets older, I’m looking forward to answering all the questions he will have about the animals.

From a financial standpoint, the regular per-visit admission price for an adult is $8 (children under age 3 are free). Our family zoo membership cost $65 and includes my wife and I plus all our dependents under age 18 (just Tyler for now). We also added the option to add one guest pass for $15, bringing the total cost of our zoo membership to $80. But for that $80, we can go the zoo as many times as we want for the entire year. An additional perk is that we get discounted admission to a lot of other zoos throughout the country, which is nice.

For Amanda and I to break even on this, we need to go to the zoo for a total of 10 visits ($80 for the membership divided by the $8 regular per person admission = 10 admissions). Now, this is 10 individual visits and not 10 family visits. So, if I’m only able to go 3 times (say, on weekends), and my wife goes 7 times (on weekends, plus the occasional visit during the week), the membership will be worth it. The thing is that my wife is home taking care of Tyler all week, so I know they will go to the zoo a lot. And with the guest pass, she can even take someone else along on those trips.

So, how much can we expect to save by buying the zoo pass? Our zoo is open from the beginning of April pretty much through Thanksgiving, which comes out to around 35 weeks. Even if we go to the zoo once a month for those eight months, that makes a total of 16 admissions. This would normally cost $128, but with our zoo pass is only $80. Total savings = $48. Realistically for us, that is a pretty low estimate. I think a more accurate estimate is that we’ll all go once a month (16 admissions), but that Amanda will probably go to the zoo during the week with Tyler and a guest (a grandparent, aunt, etc.) at least once every three weeks (another 12 admissions). This makes a total of 28 admissions that would normally cost $224, but with our zoo pass is only $80. Total savings = $144. This doesn’t even include the savings from the guest pass, which would be another $96 (since the guest wouldn’t have to pay for their admission on those 12 trips).

If you live fairly close to a zoo and have children, a family zoo pass can be a huge money saver.

The Costs of Raising Baby: Child Care

Today’s post is the sixth in our ‘Cost of Raising Baby’ series. In previous weeks, we’ve discussed formula, diapers, clothing, medical care and miscellaneous expenses. This week we will discuss perhaps the largest expense you will have during that first year: infant child care.

Before getting into the numbers, I have a disclaimer to make. My wife and I opted for the stay-at-home mom route, so we actually have no child care costs. But I know that in doing that, we are the exception rather than the rule. A large majority of today’s households are two-income households, with both spouses working. A lot of times this is due to necessity, and sometimes both parents just really enjoy their careers and want to keep working. Whatever the case may be, if you are expecting a child or considering having one in the future, you should consider the cost of infant child care. (On a side note, stay tuned for a future post next week on how to get by on one income)

There are basically two forms of child care available: day-care and nannies.

Sending your child to day-care
Day-care is by far the more popular (and less expensive) option. You drop your child off on your way to work, and then pick your child up on your way home after work. Now, there are different choices within day-care. There are many chain day-care facilities (ex. GrowingKids), church daycare facilities, and in-home day-care facilities. There are advantages and disadvantages to each. Chain and church facilities tend to cost more than in-home facilities, but they generally have more staff and offer more activities (activities are not so important for infants, but more important as your child gets older) than in-home facilities. However, they also have more children, so your child may not have the personal attention that they might have at an in-home facility may provide. It is important here not to let cost alone decide which option you choose. Your child is one of the most important things in the world, and you need to be sure that whoever is caring for your child is going to do a good job. It is important to conduct interviews with the staff and tour the facility to make sure your child will be cared for appropriately.

The average cost of a chain or church day-care facility for an infant in their first year generally runs around $125 a week (around $500 a month). You can generally find in-home day-care for less, but you have to spend more time interviewing. Obviously this “average” is not going to apply to everyone. In New York, for example, you can expect to spend $1,500 a month or more on day-care.

Hiring a nanny
A less popular option (and more expensive) is to hire a nanny to come to your home and watch your child while you are away at work. With this option, you can be assured that your child will have one-on-one attention while you are away. You don’t have to worry about your child being left alone at a daycare while the staff is scrambling to take care of a bunch of other children. However, you have to be very careful about who you hire as a nanny. You need to make sure to conduct thorough interviews, complete with background and reference checks. Again as I mentioned earlier, your child is one of the most important things in your life. You don’t want to leave your child with just anyone.

Many nannies are hired on an hourly basis, though you can also do this on a daily or weekly basis. You can expect this to cost significantly more than a daycare, though, ranging anywhere from $200 to $500 a week.

Strategies to reduce the cost
First and foremost, don’t let the price of care alone determine where you send your child. I can’t stress this enough, make sure you do the legwork to make sure the facility is providing quality care for your child.

One thing to note is that child care costs are tax deductible up to $5,000 a year. Assuming you pay the average $500 a month for daycare, you will reach this full amount. The result is tax savings of $750, $1,250, and $1,400 (respectively if you are in the 15%, 25%, or 28% tax brackets). So, the net cost of childcare would be $5,250 (15% bracket), $4,750 (25% bracket), and $4,600 (28% bracket).

Another strategy that a lot of people I know use is to have their retired parents watch their children. Obviously this depends on a lot of variables. You need to live close to your parents or in-laws, they have to be retired and have the time to watch them, they have to be physically able to watch them, and they have to be interested in watching them. I know this is not for everyone, but it can save a lot of money.

Bottom Line
Child care is expensive and, at an average cost of $6,000 a year will most likely be your largest expense. But make sure you take the time and do the research before allowing just anyone or any facility to watch your child.