Home Economics No. 34: A family of 4 living on $250k in suburban Milwaukee

They spend more on day care for 2 kids than they do on their mortgage

Hello! I’m back from Chicago, and we had the best time! We walked a million miles, ate all the Chicago classics (hot dogs, deep dish, and Italian beef), and decided we want to start a new family tradition of visiting Major League Baseball parks across the country. It was wonderful to get away, but I am so glad to be home (and eating vegetables again).

Before I boarded the flight home yesterday, I posted a question in The Purse chat: What do you like to spend money on when you travel? (Related, Erika Veurink has a very fun chat going on the random things people pack for trips.)

There are a bunch of new subscribers here thanks to an article in The Cut by my friend Charlotte Cowles, where we chatted about everyone taking fancy vacations. Our trip to Chicago was decidedly not a fancy trip, but it sure was fun. Anyway, welcome to all the new readers! So glad you’re here! Your first issue is a fun one: the signature Purse series, Home Economics!

I chose this edition of Home Economics because the couple is spending more on day care for their two kids than they do on the mortgage of their half-million-dollar home. They arguably have to means to afford it, but it still eats up a shocking 27% of their monthly take-home pay.

They are far from alone: Research from Child Care Aware, a national child care advocacy organization, found that in 45 states and Washington, D.C., child care for two kids costs more than a mortgage, and in 49 states and D.C., child care for two is higher than what families pay in rent. (This story from The 19th* is a good explainer on the many reasons for the high cost of child care in the U.S.)

I also loved that today’s Home Ec writer is very aware of her privilege, and she and her husband aim to be transparent with friends and family about their experiences buying homes and raising kids. She told me a funny (in retrospect) story about buying their first home in the suburbs of Chicago. A sewage line burst in their basement shortly after they moved in, and their first baby was just a week old. They had a “moat of poop” to contend with—and had to pay $13,000 to clean it up and make repairs. Ultimately, insurance reimbursed them most of the expense, but they were happy they didn’t buy a house at the top of their price range so they had extra savings available to cover the damage. She’s had friends tell her that this horror story inspired them to avoid buying homes at the top end of their budgets in case unexpected expensive repairs popped up. See, talking about money can be really helpful!

And on that note, on to today’s Home Ec! If you’d like to share your own story, you can fill out the form here!

Age: 31
Location: Suburbs of Milwaukee, Wisconsin
Relationship status: Married
Age of partner: 31

About me: I am a 31-year-old married mom of two small kids. My husband and I have moved from Boston to the Chicago suburbs and then to suburban Milwaukee to be closer to family and live in a more affordable area. We both work remote full time, and he is the primary earner, but that’s not our long-term plan. I’m pretty involved in our community, sitting on our church’s council, and I have formed a political-action group with a friend from elementary school that helps parents get involved in hyper-local politics. My husband and I are the first among our families and friend groups to have kids, so we are generally very transparent about where our money goes to give people a realistic look at what parenthood is like!

All expenses are monthly unless otherwise noted.

Income:

1. Your job title/salary: Communication and corporate affairs manager, $96,500

2. Partner’s job title/salary: Senior actuary, $155,500

3. Your monthly take-home pay (paycheck amount after taxes and other deductions): $4,638

4. Partner’s monthly take-home pay (paycheck amount after taxes and other deductions): $6,666 (I had to triple-check this, but it’s correct. Ha.)

5. Total monthly income: $11,304

Account balances:

6. Checking account balance: $2,156

7. High-yield savings account balance: $31,508 (3.5% APY)

8. Monthly contribution to savings account: We try for about $300.

9. Retirement account(s) balance:

   • My 401(k)s: $47,526. This is the total of two accounts from different jobs. I really need to combine them, but it’s one of those tasks I just haven’t tackled yet.

   • Roth IRA $11,234

   • Husband’s 401(k): $162,302

   • Husband’s pension: $52,051

10. Monthly contribution to retirement accounts: About $2,500 between the two of us. My husband’s company matches 4%, and mine matches 3% with an extra matching bonus in February most years.

11. Investment account balance: N/A

12. 529 account balance: $2,500 for both kids

13. Monthly contribution to 529 account: $50 each. Our relatives also give a lot to these accounts around Christmas and the kids’ birthdays.

14. Emergency fund balance: We consider our high-yield savings account to be our emergency fund.

Total in checking, savings, and investment accounts: $309,277

Housing:

15. Size of your home: We live in a four-bedroom, two-and-a-half-bath new construction.

16. Mortgage: $2,637

17. Current home value: $505,000

18. Current mortgage balance: $389,545.81

19. Year you bought your home: 2023

20. Price you paid for your home: $495,000

21. Mortgage interest rate: 6.99%

22. How much was your down payment? $100,000

23. How long did it take you to save for the down payment? This is our second house, but we spent five years living below our means and saving about 80% of my husband’s bonuses. We were able to sell our first home at a $70,000 profit less than three years after buying it. That allowed us to buy a new build in a more cost-effective suburb.

24. Did you have any family help buying your home? My in-laws helped us with our closing costs on our second home when the sale of our first house got held up unexpectedly. I was due with our second right after our first home’s close date, and I was worried about being completely broke between the two sales.

25. Home taxes: $800

26. Home insurance: $1,050 annually

27. Electricity: $65

28. Water: $90

29. Natural gas: $40

30. Cell phone: $133.72

31. Internet: $60

32. Housekeeper: $140 for one deep cleaning a month

33. Gardener: N/A

34. HOA fees: $300 annually

Transportation:

35. Monthly car payment: $745.10. We have a five-year loan with a 3.2% APR. We bought a brand-new car in 2023. Looking back, I feel like we could have bought a used car and saved $5,000.

36. Car insurance payment: $360 every six months

37. Gas: ~$200

38. Car maintenance: $100

39. Parking: N/A

40. Monthly public transportation: N/A

41. Ride shares (Uber, taxi, etc.): We don’t regularly take Ubers, but since we only have one car, we’ll use them occasionally (or we’ll borrow a car from a family member).

Children:

42. Number of children and their ages: We have two kids, ages one and a half and four.

43. Day care: $3,060. This is for both kids, Monday to Friday, from 8:00 a.m. to 5:00 p.m. Our youngest gets snacks and lunch, and our oldest gets two snacks, but we pack his lunch.

44. Babysitter: $18 per hour, at most 10 hours a month. We typically hire the youth director at our church, but sometimes we’ll use a neighborhood teen. A few of our kids’ old day care teachers will ask to watch them, but I always hesitate because I don’t want to pay $22 an hour for them to sit on our couch while the kids are sleeping. We tend to use them on the rare occasion when we need a daytime sitter, since that involves keeping the kids more entertained.

45. Extracurricular activities: $160 for eight weeks of swim lessons for both kids at our local Y. We don’t have a Y membership; we just use it for the swim lessons.

Debts:

46. Student loan total balance: $4,304. I graduated with about $25,000 in student loans, and my husband had around $15,000. We’ve made slightly larger payments than the minimum, and he paid his off not too long after graduation. Several years ago, we refinanced my loans to an interest rate of 4.7%. We’ve talked about paying them off, but we prefer to just keep chipping away and save the cash for emergencies.

47. Student loan monthly payment: $251

48. Credit card balance (if you carry a balance month to month): We pay off our cards every month.

Food:

49. Groceries: $550. We are heavy Aldi shoppers, and we spend about $60 a week there, primarily on dairy products and produce. It’s hard to estimate our Costco average, because it varies, but we usually buy chicken, snacks, and “extra” drinks like Poppi and Polar Seltzer. We went in on a quarter of a cow with my parents last year, and we spent about $600 on that. It sounds expensive, but we haven’t bought ground beef in over a year. We try to limit our Trader Joe’s runs because we are food curious and love to try new things.

50. Dining out: Maybe $150 a month, which includes dining out and regular trips to the coffee shop.

Socializing and Entertainment:

51. Subscriptions (streaming services, magazines, etc.):

    • $30 for Apple Premium, which includes Apple Fitness, News, Games, Apple+, Music, and upgraded cloud storage

    • $8 for our own profile on my parent’s Netflix account

    • Over $60 for a variety of Substacks and Patreon accounts between me and my husband

52. Memberships (museums, etc.): N/A

53. Movies, concerts, other events: $75

54. Entertaining and socializing other: $65. I host book clubs, and we often bring things to our family gatherings. So many parties in the Midwest are potlucks.

55. Travel: We’ll spend close to $10,000 all in this year, which includes:

    • My husband and I went to Barcelona in January, and we spent about $5,000. That included the emergency babysitters we needed when our daughter got hand-foot-and-mouth! It was a work trip, so my flight and four nights in a hotel were paid for as well as a lot of the meals.

    • We just got back from Toronto, Canada, where my husband had a work conference. We spent about $1,750, and we didn’t have to pay for the hotel or his flight.

    • We also go camping, which is about $200 a weekend for us in total.

    • We’re going to South Dakota for a reunion, and the total will probably be about $3,000 between gas, hotels, and food.

Miscellaneous:

56. Clothing: $150. This is mostly for my kids. We do a few “hauls” each year when we shop for our kids at a local second-hand sale.

57. Home supplies: $30

58. Exercise: $105 for Peloton and Tempo memberships. We have a great home gym.

59. Personal and self-care (haircuts, manicures, massages, etc.): $75 for haircuts

60. Pet supplies: About $100 every other month for food and medicine for our dog (she has seasonal allergies)

61. Donations: Honestly, this varies, but it was $25 this month.

62. Tithing: $80

63. Events (birthday parties, etc.): This is part of my hosting budget. We’ll do pretty low-key birthdays for the kids—usually a potluck.

Insurance:

64. Life insurance: $250 annually for universal life insurance policies for all four of us

65. Health insurance: $400 a month from my husband’s paycheck

66. FSA contribution: $276.92 for the childcare FSA. It comes out of my paycheck.

67. HSA contribution: $500 a month, also out of my husband’s paycheck

68. HSA balance: We’ve been using our HSA funds so much that we don’t have much of a balance right now.

Total monthly spending (includes annual expenses divided by 12 as well as contributions to savings and 529 accounts): $11,623.98

Tell us more:

69. What are your top financial priorities?
    1. Having at least $25,000 saved for emergencies

    2. Being able to enjoy little things
    3. Be generous with our friends and family
    

70. How do you feel about your current financial situation?
    We need to be more constrained on our one-off spending. Since we stopped needing to save for a house, we definitely started to allow too much lifestyle creep. We are both big fans of shopping on Facebook Marketplace, and if we see something we want, we’ll usually buy it. My husband recently picked up a secondhand Apple Vision Pro VR headset. We also don’t think twice about indulging in little treats here and there, like taking regular trips to the coffee shop to get coffee and cookies with the kids. And it seems like we’re always replacing things that the kids break or outgrow. It all adds up. We have the disposable income for these purchases, but I want to make sure we’re mindful.

71. What are your money stressors?
    Day care, honestly. We just moved our daughter from our regular day care to a more structured one because we disliked our son’s 3k program so much. It’s an extra $400 a month, but her being in the right environment is important to us.
    The town we’re in offers free pre-K, but it’s just a morning program, so parents then have to pay for some kind of extended care. The city runs free buses from the pre-K to five different extended day care centers. I feel so lucky that my husband and I have flexible jobs and the means to pay for day care, because it’s so expensive and not easy to navigate.

72. Do you expect to receive (or have you received) an inheritance from a family member?
    Yes, my grandparents are well-off, and my parents have a trust set up for us. My husband’s parents are also well-off for our area, and we will likely get something way down the line. But our parents are mid-50s, so we have a lot of time left with them.

73. Do you receive any financial support from your family?
    No, but if we needed it, I know we could get help. We needed some money in between buying our current house and selling our old one, and we were able to get an interest-free loan from my in-laws so we could make it through those three weeks.

74. Do you financially support any family members beyond yourself and your nuclear family?
    No, we don’t, but we’re extra generous with our younger cousins and nieces and nephews.

75. How do you and your partner split your finances? How did you decide to go that route?
    We have everything in one pot. We’ve been together for 13 years, and we moved in together at the end of college when our savings was a grand total of $3,800. We discuss every purchase over $100. I know it’s not for everyone, but we are one team against the world, and that includes finances.

76. What is one financial goal(s) you still want to achieve?
    We want to buy a second home somewhere abroad where we can spend time regularly. It’s far-fetched, but if we can’t do that, we’d love to build or buy a mid-century-modern-type home on a nearby river when our kids are older.

77. What do you regret spending your money on the most?
    I got sucked into paying quite a bit for nutritional support at a chiropractor’s office when we had a hard time conceiving our second baby. I spent around $300–$500 all in for supplements and visits with the nutritionists. Looking back, there are probably better ways we could have spent that money, but I appreciate that my husband was so patient with me and didn’t give me a hard time for spending so much when I was stressed about secondary infertility.
    

78. Tell us about one financial accomplishment you’re proud of.
    We were able to buy both our houses with 20% down. My husband’s job pays out big annual bonuses (a big privilege!), and we were able to save most of that money toward a down payment. We’re also lucky our student loans were manageable. But we lived really lean in our early 20s in order to save enough for a down payment.

79. What is one thing you spend money on that makes your life better?
    We pay for a house cleaner to do a deep clean of the main parts of our home—bathrooms, floors, and our kitchen—once a month. It’s amazing. It frees our time up on the weekends to actually enjoy our little kids.

80. What is one thing you spend money on that drives you crazy?
    Honestly, day care. We live in a low cost area in the Milwaukee suburbs, and we still spend over $3,000 a month on child care. The Wisconsin legislature refuses to accept federal funding or use the state’s budget surplus to support families, and it drives me crazy. I’m working with local mom groups to put pressure on our local reps to pay attention to us. The new district maps should really help us in the next few years get a more balanced representation in the state legislature. My husband and I make really good money, so I am just so heartbroken for people who don’t make what we do and the crazy sacrifices they need to make to ensure their young children are well cared for.

81. Is there anything else you would like to add?
    My husband and I know that we are really well-off for our age and area of the country where we live. We make much more than our parents ever did when they had young kids, and we are so focused on making sure that our kids have a good work ethic and don’t just “expect” things from us. We don’t want them to grow up spoiled, and we want them to understand how privileged they are.
    It’s really important to me and my husband that we teach our kids to have empathy for others and to understand that budgeting and saving are important life skills. When they leave our house at some point, I want them to feel prepared to do their own laundry, make their own food, and understand how to spend their money well.
    My mom is a CPA, and she taught me to budget and drilled into me what healthy finances look like. It was such a huge privilege to learn this from her when I was young, and I want to make sure my kids have a similar education.

Please comment with kindness!

Random Extras:

• My dear friend Heather, of The Joint Account, is celebrating her 40th birthday this weekend, and she wrote a very fun newsletter with 40 lessons on life, love, and of course, money. It’s a wonderful read! Also, I highly recommend pre-ordering her new book, Money Together, which I had the opportunity to read in galleys, and I really believe it is going to be a new classic in the personal finance canon! Happy birthday, Heather! I adore you!

• Not going to lie: I’m counting down the days ’til my son, Freddy, goes back to school. Like many moms, I worry he’s had too much screen time this summer, and that his brain is turning to mush. But I’ve been delighted to see him playing the financial literacy games in the Acorns Early app. He was even explaining “delayed gratification” to me recently!

  Want to teach your kids about money but not sure where to start? The Acorns Early app has fun financial games for kids to help them get a good foundation early. New users get a 30-day free trial. Plus, Purse readers get a complimentary one-year annual subscription to this newsletter when they sign up for an Acorns Early account via this link.¹ #partner

• Are you following The Purse on Instagram? You should!

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