I understand now why a lot of women decide to stay home after having a baby. It’s not because they are worried about missing out on baby’s first steps or other lifetime milestones…it’s because literally every cent of their paycheck will go to daycare! Now, if I didn’t need to work for my own sanity purposes staying home would be the practical thing to do. After paying rent and daycare each month I may have just enough money left over to purchase a cup of coffee. From 7-11. I would have to stand outside Starbucks with a sign asking for spare change to afford their coffee!
I have come to terms with the fact that I now sit at a desk 40 hours a week to make just enough money to pay people to watch my son…so I can work (see the crazy cycle I’m in)—ANYWAY, as I mentioned in my previous post, my goals this year are to start a college fund and begin saving for a down payment on a house. I will somehow need to scrounge up just enough money each month to begin investing. The only way to gain personal wealth is to decrease spending and/or increase revenue streams. Since I do not foresee a promotion or pay raise in my future I will have to make spending cuts and invest what little money I have left over. Make my money work for me.
Originally I thought my first step should be to create a budget. Find out exactly what my expenses are so I know how much money I have to work with each month. After further consideration I decided Step One should be to research all benefits my company provides. See, there are a few perks to working that stay-at-home-mom’s don’t receive, such as a 401K match or flexible spending account. This is all FREE money, and no one in their right mind should turn down free money. After scouring my company’s employee benefits I discovered the following hidden gems (in addition to health, vision and dental care):
• 401K match 2:1—I was already enrolled in this. For every dollar that I put into this retirement account my company will put in $2, up to $5,000 per year! How can you not max that out? That’s a FREE $5,000 a year!• Commuter compensation—I was also already enrolled in this as well. Living in the city, I do not have a car, I use public transportation every day and the pass is usually $70 a month. With this program my company gets a discounted rate of $50 per month, automatically drawn from my paycheck pretax. That’s a FREE $20 a month!
• Dependent Care Account—Just enrolled today! As a new parent I am also eligible for a pre tax dependent care account in which my job will also contribute $100 a month. Just like flexible spending where the money is taken from your paycheck each month tax free, I can place up to $5,000 a year into this account before taxes to use towards daycare and my job will give me $100 a month just because. That’s a FREE $1,200 a year!
• Employee Stock plan—15% discount on company stock price and since this is a big goal of mine, I need to jump on this immediately
I know it may sound counter intuitive to have all these additional costs (benefits) taken from your paycheck each month—making your take home pay lower, but honestly you can’t afford not to! This is FREE money and while it is not liquid and available for use right away, all of this will add up—increasing your net worth.
Now that I have maxed out all of my employee benefits, and know what my bottom line paycheck will be I can create a budget. So off to the company break room I go for a FREE cup of coffee because just like every other momma (working inside or outside the home) I did not get any sleep last night, and will need multiple doses of caffeine to function…so I can work…to afford daycare!