Home Economics No. 40: Furloughed federal employee in Tucson, Arizona

She’s the primary breadwinner with two kids in preschool

ICYMI: Just a reminder that we’re having a big sale on annual subscriptions right now for my birthday. Until November 30, you can get an annual subscription for $45.60 (usually it’s $80), and we’ll be donating $5 from every new annual subscription to a food bank.

I know many of us have been limiting our news consumption over the last year as a form of self-care. I try not to doomscroll, but I do listen to NPR’s Morning Edition most mornings, and some days I wonder why. It’s hard not to feel a lot of anger and sadness over the state of our country, and yesterday when I woke up to the news that eight Democrats had capitulated and joined Republicans to vote in favor of the spending bill without reaching a deal on ACA subsidies, I was mad. What was the point of the shutdown if we were just going to give in to the status quo after 41 days?

Last week, I had a call with today’s Home Economics writer, who is a furloughed federal employee living in Tucson, Arizona, with her husband and two small kids. After we ran through the usual questions, I asked her how she felt about the shutdown. She’s the breadwinner in her family, and even though she has a lot of money tied up in retirement and brokerage accounts, her cash savings are more limited.

Politically, she said, she supports the shutdown, even though “not getting paid is a bummer.” She also told me that working for the federal government right now is hard. “Morale is absolute trash,” she said. But it’s not easy to walk away from the job when the labor market is shaky, and she’s the primary earner.

I emailed her yesterday to get her reaction to the news. “I’m absolutely apoplectic about these Dems caving for no more than a pinky swear promise to have a vote that will go nowhere in the House,” she wrote to me. “I am glad to be getting my backpay (which hopefully doesn’t take too long), but the [continuing resolution] only goes to January 30. At that time, there will be no holiday travel and SNAP threats¹ to pressure folks into ending the shutdown*, so I anticipate it could be an even longer shutdown. As a result, I’m going to be keeping my money in my HYSA and other cash-like accounts rather than investments, as who knows how long it might be…. This whole situation has really upped my interest in financial independence, as I’m close to my breaking point.”

There’s no denying that today’s Home Ec writer comes from a place of privilege that perhaps allows her to be more supportive of the shutdown than someone who doesn’t have a healthy savings account. But it feels unfair to me that we’re putting federal workers and SNAP benefit recipients in this position in the first place. Our leaders are playing politics with the livelihoods of millions of Americans, and frankly, it’s just gross. We deserve better.

Has anyone figured out a way to manage their anger over the state of our country? Do I need to take up boxing as a way to release the rage?

I should say this with every Home Ec, but a big thank-you to today’s writer, who was so generous to give us a peek at her life during a particularly vulnerable moment. We’re always looking for diverse stories to tell. If you want to submit your own Home Ec, you can fill out the form here.

Age: 41
Location: Tucson, Arizona
Relationship status: Married
Age of partner: 37

About me: I am a furloughed federal employee, and my husband is a freelance musician who cobbles together symphony and chamber music gigs, teaches private lessons, and does non-music adjunct work at the local university. We have two kids in preschool in a state without any kind of public preschool, so we spend a lot on child care.

Income:

1. Your job title/salary: Associate counsel, $165,000

2. Partner’s job title/salary: Musician, ~$18,000-$20,000

3. Your monthly take-home pay (paycheck amount after taxes and other deductions): $7,100

4. Partner’s monthly take-home pay (paycheck amount after taxes and other deductions): $500. My husband’s pay really, really varies depending on the gigs available and how many private lessons he’s giving at any one time. (It’s always slower in the summer.) In a good month, he can earn as much as $1,500 from gigs and lessons, though this isn’t typical. He also earns money from his adjunct professor job, but we put 90% of that directly into his 457 account. (More below.)

5. Total monthly income: ~$7,600

Account balances:

6. Checking account balance: $12,000. My husband has a separate checking account with a few thousand dollars in it.

7. Savings account balance: N/A

8. High-yield savings account balance: $18,000 (3.5% APY)

9. Monthly contribution to savings account: None specifically to savings

10. Retirement account(s) balance: These are combined numbers for our household:

    • 401(k) and equivalents (Thrift Savings Plan, 403(b), 457): $834,000

    • Roth IRAs: $200,000

    • Inherited 403(b): $215,000. My father passed away this summer, and I inherited his retirement account, which I will have to draw down over the next 10 years and pay ordinary income tax on.

11. Monthly contribution to retirement accounts:

    • I max out my TSP contribution annually, and there is some amount of match by the agency I work for, but I’m honestly not sure what it is at this point. Right now, since no paychecks are coming in, nothing is going into my TSP.

    • I max out my Roth IRA at the beginning of the year.

    • We recently set it up to have 90% of my husband’s pittance of an adjunct salary go to his 457, so that’s probably about $1,000 a month.

12. Investment account balances:

    • Brokerage account: $335,000

    • iBonds: ~$20,000. I bought these when inflation was high, and now the APY has dropped. I’ll probably hang onto them until they mature, even though I’m sure there are better places to put the money, even with the penalty.

13. Monthly contribution to investment accounts: Whatever is left over after expenses, funding my Roth, the kids’ 529s, etc. I usually do lump sums of $3,000 or $5,000 a few times a year rather than parceling it out by month, as it varies quite a bit depending on the expenses of the month. Nothing right now, obviously.

14. 529 account balance: $43,000 for the five year old, $23,000 for the two year old

15. Monthly contribution to 529 account: I do this in lump sums, too, with at least $4,000/year for each kid, as there’s a tax credit for it. I try for at least $6,000 but up to $10,000 depending on our expenses.

16. Emergency fund balance: My HYSA, and to a lesser extent, my brokerage, function as my emergency fund balance. I have definitely had to utilize it this month to make sure I could pay my bills during the shutdown.

17. Goals-oriented savings accounts: Nothing specific—I used to sometimes throw some money at my mortgage, but because my rate is so low (2.99%), I’ve been trying to resist the urge, so I can keep my money in index funds that will get me a better return. (At least for now!)

Total in checking, savings, and investment accounts (includes HSA): $1,740,000

Housing:

18. Size of your home: We live in a three-bedroom, two-bathroom house, and we use one of the bedrooms for my husband’s studio, where he teaches private lessons, practices, etc.

19. Mortgage: $1,105

20. Current home value: $330,000

21. Current mortgage balance: $93,000

22. Year you bought your home: 2020

23. Price you paid for your home: $250,000

24. Mortgage interest rate: 2.99%

25. How much was your down payment? $50,000

26. How long did it take you to save for the down payment? I hadn’t really been saving up specifically for a down payment. Then I got pregnant, and I was renting a 1,000-square-foot house with a bit of a slum-lord-esque management company, and I decided I better move to something bigger and nicer. I saved specifically for the down payment for about six months, cobbling together a few different sources of savings.

27. Did you have any family help buying your home? My sister’s husband is a former exec who sold his company for a lot of money, and they are very wealthy as a result. I asked if she would loan me some money for the down payment, and she said that loans are messy, and she’d just give me the money. She gave me $20,000 that we used toward the down payment.

28. Home taxes: These taxes are part of our escrow account, so I’m not sure—maybe $200 a month?

29. Home insurance: Also in the escrow account, but I think it’s $800 semiannually.

30. Electricity: $80–$100. We have a solar lease that we took over from the prior owners, so this is roughly the solar lease cost plus the fee our local utility charges to keep service going.

31. Water: $80

32. Natural gas: Averages between $10 and $30 a month

33. Cell phone: Too much, ha. I pay for my mom’s cell phone as well, and we have a grandfathered Verizon plan, which I should just give up, but I like truly unlimited data. I think it’s about $245? Yikes, even for a family plan.

34. Internet: $85

35. Housekeeper: My husband is a champion at keeping us in minimal squalor for having two small kids.

36. Gardener: Husband again, though we also try to have native plants that are low maintenance and desert friendly.

37. Other: Not monthly, but we do get our piano tuned twice a year or so, and there are other miscellaneous instrument repair costs—I’d estimate $400 annually.

Transportation:

38. Monthly car payment: $410. The lease is for 24 months and 12,000 miles per year. We just leased an EV in September, which is very exciting, but it does mean I have a car payment after many years of not. (I replaced my 2009 sedan, so it was time.) I never thought I’d be someone who would lease a car, but the EV incentives were bananas, since they were expiring. It ended up being cheaper to lease and then pay the residual if I still like it when the term is up than it was to buy it now.

39. Car insurance payment: My husband and I pay for our car insurance separately. I spend $650 every six months to cover the new EV and the old sedan. My husband spends $400 every six months for his car.

40. Gas: Slightly harder to estimate with the EV, but $100 a month between the cars?

41. Car maintenance: I am bad at tracking these expenses, but they do happen.

42. Parking: About $54 for my husband to park at the university

43. Monthly public transportation: None. I miss the cities I lived in with better transit, though.

44. Ride shares (Uber, taxi, etc.): Very infrequently, thanks to small child life

Children:

45. Number of children and their ages: We have two kids, ages two and five.

46. Day care: $1,400 for both kids. Our oldest has a scholarship, which saves us about $400 a month.

47. After school: It’s just me and my husband most of the time, and my mom helps out a couple days a week.

48. School tuition: I am looking forward to public school for my eldest next year! Sadly, our district doesn’t offer free full-day kindergarten, so we’ll have to pay $315 a month for her to go to 3:00 p.m. But that’s much better than preschool costs, so it will ultimately be a win.

49. Babysitter: None. We would like this to change at some point, but for now, at least one of us is home pretty much all the time, or we are able to have a friend come hang out while the kids are in bed.

50. Extracurricular activities:

    • Gymnastics for both: $200

    • Dance for the oldest: $100

51. Other: We try to get most of their clothes, toys, and presents from hand-me-downs or our buy-nothing group. We probably spend $25 to $50 on miscellaneous kid stuff each month.

Debts:

52. Student loan total balance: $0, thankfully! I had a lot after law school—around $200,000, plus another $50,000 from undergrad. I had a very low interest rate on the undergrad loans, thankfully, and I took a fairly punishing firm job after graduation so I could pay off the higher-rate law school loans (mostly 8.5%) as quickly as possible.

53. Credit card balance (if you carry a balance month to month): I have a lot of credit cards, as I was once a points-and-miles kind of person, but I always pay off the balance, so I have no idea what the obscene interest rate is. Paying off the balance every month has been more challenging due to my cash flow issues from the shutdown, particularly because I had a monster October credit card bill from my car down payment, as well as a number of expenses related to my father’s passing and the memorial.

Food:

54. Groceries: $700–$800. My husband is the grocery shopper in our family, and he cooks most of our meals at home. He generally goes to Trader Joe’s once a week ($150 per shop), and he’ll hit up Costco or a regular grocery store a couple of times a month.

55. Dining out: $150–$200. We don’t eat out often, but even takeout from our favorite Indian spot comes out to $80, and higher if we are feeding my mom. Our dining out budget is even higher if we travel anywhere. Inflation is real, ha.

Socializing and Entertainment:

56. Subscriptions (streaming services, magazines, etc.): $40 for medley of streaming services

57. Memberships (museums, etc.): $169 annually for a family membership to the Desert Museum (which is awesome and everyone should check out if they are ever in Tucson).

58. Movies, concerts, other events: The last time I saw a movie in the theater was pre-pandemic (and pre-kids), sadly.

59. Entertaining and socializing other: We mostly have folks over to our house, or we will go out for a happy hour or whatnot, but probably not more than $100 a month.

60. Travel: This was an expensive year for travel, in part due to my father passing away unexpectedly, as well as a variety of other pre-planned travel. All told, it’s probably about $10,000 this year. We took a ski trip to Flagstaff, two trips to the Bay Area for my dad, a road trip to San Diego/Mission Viejo/Disneyland/Las Vegas, a work/personal trip to Boston, a trip to Bozeman to see my brother’s family, and a wedding in Seattle. Shockingly enough, we don’t have any current flight reservations, though we will probably go back to Vegas to see my husband’s family sometime around the holidays if the shutdown ends. Right now that trip is on indefinite hiatus, as I don’t have the cash to make reservations of any kind.

Miscellaneous:

61. Clothing: Probably about $10 a month. I’m in my caftan/20-year-old-t-shirt-and-shorts era.

62. Home supplies: $20

63. Exercise: Outside is still free—for now.

64. Personal and self-care (haircuts, manicures, massages, etc.): My husband and I both get haircuts about every six months—we actually have the same stylist thanks to his luscious locks—and it’s about $70. We don’t spend much on self-care beyond that, though I do go to therapy weekly and see a psychiatrist monthly. That was about $80 and $150 pre-deductible, but now is down to $17 and $30, which is nice.

65. Pet supplies: ~$20. Our very good dog passed away earlier this year, but we still have two nice kitties who do require food and litter.

66. Pet insurance: None

67. Donations: About $200 to $300 a month to various good organizations. I usually make a couple of bigger donations around tax time for the state tax credit and then smaller monthly donations throughout the year. This is another thing that I’m doing less of right now because of the shutdown, though I haven’t stopped my monthly autopay contributions, just the bigger lump-sum ones. I really wish I could be throwing some money to the community food bank right now!

68. Tithing: N/A

69. Events (birthday parties, etc.): The kids’ birthday parties are still low maintenance for now, but we’ll spend $100 for a park ramada fee and probably about $150 to $200 for food and beverages. (We are a family that believes in adult beverages at children’s birthday parties, ha.)

Insurance:

70. Life insurance: $10 for a whole life insurance up to the amount of my salary, which comes out of my pay check.

71. Health insurance: $500, which also comes out of my paycheck. I just found out our insurance premiums are increasing by 20% next year. Definitely made up for with a 1% increase in pay for all federal employees, right?

72. FSA contribution: $5,000 annually for dependent care, but that will increase to $7,500 next year (which I am very jazzed about, even though it’s still not enough). Comes out of my pay check.

73. HSA contribution: ~$700. I max it out after whatever my employer contributions are.

74. HSA balance: About $40,000, but I try not to touch it, as we are using it as a quasi-retirement account. I love a high-deductible plan!
    

    Total monthly spending (includes annual expenses divided by 12): $6,431.07

Tell us more:

75. What are your top financial priorities?
    Keeping everyone safe and healthy, funding the kids’ education, and hopefully retiring early.
    

76. How do you feel about your current financial situation?
    Pretty good, though I do stress about the idea that my investments are illusory and could disappear in an instant if the various bubbles pop. I’m also a bit anxious on how long this shutdown will last, as it’s definitely been a challenge to my liquid assets and is making me tighten up any discretionary spending—a preview of early retirement, I guess? But not one I needed to have while paying for two in preschool.
    

77. What are your money stressors?
    Saving enough for college when the cost keeps rising at what seems like an unsustainable pace. Having enough cash to pay the bills while the shutdown is ongoing. Saving enough to make early retirement a possibility. As mentioned previously, the speculative nature of the stock market also gives me anxiety, but not enough to keep my money in safer assets, I suppose. I try to remind myself that time in the market is more important than timing the market, and the story of Bob, the world’s worst market timer, is very soothing to me.
    

78. Do you expect to receive (or have you received) an inheritance from a family member?
    I recently received about $300,000 when my father passed away unexpectedly earlier this year. It’s been unduly stressful trying to deal with all the logistics required to actually get that money on top of actually grieving. Either way, I am very thankful, as it has made this shutdown much less horrible than it would have been. It’s also allowed me to put a lot more in the kids’ 529s. I don’t anticipate getting much, if anything, from any of the other remaining parents.
    

79. Do you receive any financial support from your family?
    My mom comes over two afternoons a week to hang with the kids, which is truly invaluable time for my husband and I to get things done, even though we are usually still at the house. She’s on limited funds due to disability, but her help with the kids is worth more than money.
    

80. Do you financially support any family members beyond yourself and your nuclear family?
    If my mom needs long-term care, I expect to be financially responsible and involved with some of the caretaking.
    

81. How do you and your partner split your finances? How did you decide to go that route?
    I make the vast majority of the income, manage all the finances, and do a lot of the mental load when it comes to the kids, and my husband works less so as to do more of the cooking/cleaning/school pickups and drop-offs/other child care. When I got pregnant with my oldest, he was living and working for a college in another state. When he gave up that job to move back to Arizona, we made a plan that I would work more until the kids got a little older, when there is more flexibility. I also am happy to have at least one person in our relationship doing what they love!
    
    I find personal finance very interesting, and he doesn’t care too much, so he’s more than happy to have me tell him what the plan is and run our retirement agenda.
    

82. What is one financial goal(s) you still want to achieve?
    I would love to be able to retire in the next 10 years, though I’m working on making that happen much sooner if possible (or at least having F-you money). I’m putting everything I can into retirement or my brokerage, while trying to live modestly, if not too spartan. Beyond that, it’s just the luck of the markets as a whole—let’s see how a Boglehead-type strategy plays out (and hope that any market correction has recovered by the time I plan on retiring).
    

83. What do you regret spending your money on the most?
    These are all small things, but offhand: cashmere sweaters that the moths destroyed, soccer and basketball shoes we bought and then my kid decided she wasn’t into those sports after one season, online purchases that I didn’t manage to return in time and am now stuck with.
    

84. Tell us about one financial accomplishment you’re proud of.
    Paying off my law school loans—it was so satisfying to watch the principal go down and down—a visceral pleasure that investment gains don’t really match.
    

85. What is one thing you spend money on that makes your life better?
    Preschool. Even though it’s a ton of money, the kids get so much value from it, and the teachers are incredible. It’s also really great to have at least a few hours where someone else is watching the kids, as I tend to be the default parent, and it’s hard to get anything done when they are awake and around me.
    

86. What is one thing you spend money on that drives you crazy?
    Health care. It’s obviously valuable, but it’s so expensive and only getting worse. If I tried for early retirement, I may also need the ACA, so to see all the chaos with that is also stressful. It hasn’t happened yet, but the costs of long-term care also keep me up at night. How can someone even budget for such a thing?
    

87. Is there anything else you would like to add?
    My very best tip for my ADHD brain is to automate as much as possible—set it and forget it. Autopay, auto deduct the max possible for retirement, HSA, DCFSA, whatever else, and then you’re automatically saving a huge chunk of your paycheck. It also helps that I live in a pretty low-moderate cost-of-living area, and my friends are mostly teachers and other civil servants, so lifestyle creep is limited. Finally, having kids certainly comes with its set of costs, but they keep my spending on eating out, going to bars, and enjoying nightlife of any kind way down. Still, I can’t wait until I’m done paying for preschool. Oh, and remember to vote early and often!

Please comment with kindness!

1. This new funding bill includes a “minibus” of three appropriations bills that will fund military construction, the VA, operations for the legislative branch, and the Department of Agriculture and the FDA through September 2026. In theory that means that SNAP benefits will be funded even if there’s another government shutdown in January. I say “in theory” because there was technically funding for SNAP during this government shutdown.