Transcript: Saving Money on Childcare
Parent Savers
Saving Money on Childcare
Please be advised, this transcription was performed from a company independent of New Mommy Media, LLC. As such, translation was required which may alter the accuracy of the transcription.
[Theme Music]
SCOTT KILIAN: Providing a quality financial life for our family is a goal shared by most people. While there’s no way to prepare for all the curves and bumps that we’ve all faced, there are some things that we can prepare for and childcare’s one of those things. Hello everyone, I’m Scott Kilian, a certified financial planner practitioner, and throughout my fourteen years in financial planning, I’ve had the opportunity to talk with new families on some things that they absolutely they need to be aware of as they make financial decisions with their families. Today we’ll be focusing on childcare expenses. This is parent savers, episode 89.
[Theme Music/ Intro]
JOHNER RIEHL: Welcome to Parent Savers everybody; we’re broadcasting from the Birth Education Center in San Diego. Parent Savers is your weekly online on-the-go support group for parents from conception to kindergarten. I’m your host Johner Riehl. Thanks again to all of our loyal listeners who join us week in and week out. And thanks also to those of who you are listening for the first time. As you may know you can join our parent savers club and receive access to special bonus content after each new show plus special giveaways and discounts from time to time.
And if you haven’t already please make sure to download the free parent savers app available in the android and iTunes marketplaces so you can automatically have access to all the great parenting advice and conversation we have on parent savers every week. Let’s start this week’s conversation by meeting everyone who’s joining us, I’ll actually start. As you guys know I’m Johner Riehl, and we have, I have three boys, Quinner is not quite seven but he’s about to turn seven in three days from when this is released. Whittaker is four and Zyler is two. Now that I have three kids, I know why people forget the ages coz they’re always turning different ages and its coming up so, yeah Andy
ANDY LOY: Hi my name is Andy Loy and we have a six year old named Devon and I’m here with my wife Valerie
VALERIE LOY: Hello, I’m currently a stay at home mom and we’re just raising our son. He’ll be seven this year
JOHNER RIEHL: Nice
VALERIE LOY: Yeah
ERIN ESTEVES: And I’m Erin Esteves the producer, also known as Oh Gee Mama Sita. I have one little boy. He just turned two and yeah, I need sleep.
JOHNER RIEHL: Right. And money right and that’s why we’re talking to Scott
ERIN ESTEVES: I would give up money for sleep.
SCOTT KILIAN: More money more sleep
JOHNER RIEHL: Yes. Alright Scott. Scott’s joined us before but he’s our expert today
SCOTT KILIAN: I’m Scott Kilian and I’ve got a four year old boy, Alex.
JOHNER RIEHL: Nice. Alright, welcome to the show.
[Theme music]
JOHNER RIEHL: Alright, before we dive in today’s topic, we’re going to look at another app which we do from time to time here on Parent Savers. And it’s an app that we’ve all checked out ahead of time and we’ll discuss it and at the end of the segment we’ll let you know whether or not it’s worth to be recommended or if it’s something you should pass on. And today, we’re talking about preschool games. We’ve got a link to it on the episode page on the website. And it’s actually g-ass preschool games because I think preschool games are a kind of a common name on the app store, and so this particular one, it’s actually really cool. I tested it out with my four year old who is right in the targeted title, preschool games. It’s a variety of different games, that you can either pick the ones that you like or go through a, it generates different games, either match the object or which one is different or there’s a maze in there. And it’s actually, it’s really cool and swiftly done and I think there’s really good artwork. What did you guys think when you played it?
ANDY LOY: The artwork was great, the graphics were very, like, bold and popped out and really could grab little kids’ attention, I thought.
VALERIE LOY: Yeah, I thought it was very engaging for them to feel and pretty simple.
JOHNER RIEHL: Yeah. And so my four year old jumped right into it and he, once he saw the maze one, that was his absolute favorite. Because he loves, like it’s a chance for him to do mazes and figure out and it’s a really easy interphase with the big, purple dot that can maneuver through.
ANDY LOY: One of the things that I, when I was looking at it, the music isn’t as annoying as a lot of the other apps. I guess I mean, I’ve seen some apps and it’s just like.
JOHNER RIEHL: I loved it. That’s a pro. The music isn’t as annoying
ANDY LOY: Yeah. It’s very subtle.
ERIN ESTEVES: I really liked it. My little boy, he’s only, two. So I couldn’t get him to stand still long enough, to like, actually try any of the games,
JOHNER RIEHL: But that’s everything.
ERIN ESTEVES: But that’s everything, yeah, unless it’s food or Curious George. I totally see this as something that he will be able to sit down, and look at eventually. And I think it’s great. I love it. I’m definitely giving it thumbs up.
JOHNER RIEHL: You know, I think, yeah. I’m gonna give it a thumbs up, too. There’s one thing I didn’t like about it, and I was playing on the iPhone version, and I understand that people put ads in apps so I don’t, but there are ads in the app and the ads actually interfere with the, you know, progress of the game. And even my fingers, in coordination, which theoretically are better than a preschooler’s. But there are
ERIN ESTEVES: Again, theory
JOHNER RIEHL: Yeah. When I accidentally hit the ad sometimes when I’m trying to skip and I think that’s something that, I imagine if we bring that up or put it in the comments, even on the app, that’s something that could be fixed, so I wouldn’t want to ding it for that. Because I think the content is educational enough it’s not just like there’s find the difference and there’s match games. There’s enough of an educational component and the fun component but it’s definitely worth recommending. It’s a thumbs up for me. What do you guys think?
ANDY LOY: I’m giving it a thumb up, too. I think if they do the, usually the paid version, they’d remove the ads sometimes. I’m not sure on this game.
JOHNER RIEHL: Maybe that’s what it was. Maybe I was checking out the free version, and then there’s also the paid version.
ANDY LOY: Yeah. So that might help.
JOHNER RIEHL: If you are playing the free version, just be careful about those ads. Because they’re easy to accidentally click on. Even if your kid knows to push the red X to progress, the ad is blocking half the X.
ERIN ESTEVES: Well that’s why you have to make sure that your iTunes account requires a password. So your kids don’t accidentally order a bunch of stuff. They get that ad.
VALERIE LOY: We experienced that.
ANDY LOY: Yeah
JOHNER RIEHL: Yeah. Check it out, we’ve got a link to it in the website, preschool games and thumbs up from Parent Savers.
ANDY LOY: Thumbs up.
VALERIE LOY: Yeah.
ERIN ESTEVES: Woo-hoo!
[Theme music/ intro]
JOHNER RIEHL: Okay, let’s dive in the conversation today. Today’s topic is ten ways to save money on child care and I think we’re going to have at least ten. If not more, but ten is a nice round number. Today we’re talking with Scott Kilian, he’s going to tell us more about ways that families can kind of maximize their child care dollars and kind of even the different aspects of childcare that we might’ve not been thinking about. So, welcome, Scott.
SCOTT KILIAN: Thank you for having me.
JOHNER RIEHL: Let’s I guess, start with you know, your financial planner practitioner. Let’s talk about what that means and kind of what financial planning is coz I think a lot of people have a lot of different perceptions of it and so let’s just talk about what it is that you do and what you think financial planning is.
SCOTT KILIAN: Sure, the financial planning process is nothing more than, it’s just a process of determining whether and how much an individual or family can meet their life goals through the proper management of their financial resources. There’s a lot of powerful words in there, you know, we’re talking about proper management, financial resources, life goals, and these are heavy words. And we help, I mean I help my clients with identifying their life goals and then helping them achieve them through proper education. That’s really what it comes down to.
JOHNER RIEHL: And so really the first step is kind of identifying, you know, what it is you’re even talking about or desiring the safe will for it
SCOTT KILIAN: Absolutely, it’s the first step and it’s a very long step. Because it’s something that, not very many people are crystal clear on it. And we know this because a lot of times they will make decisions that are countered to their life goals. They will make decisions that are countered to what they tell us is really important to them. If they want to save for retirement or child care expenses, and then yet they would want to go out and buy the expensive car that uses resources that would otherwise fund what they’ve just told us their life goals are. Well, you have some conflict there.
JOHNER RIEHL: I think generally speaking, once you start looking at your goals, whether it’s on the huge level or even in a smaller level, you realize how much, how well these little decisions, you know, can be countered to that. And a lot of them are just taking a look at it and, you know, kind of planning and then maybe changing behaviors to fit the goal
SCOTT KILIAN: And how impactful they are when you nail it. When you sit down with your partner and you say, ‘look, this is really what we want to accomplish, really and truly above all else. We want to make sure this happens.’ That communication is rare these days, I found.
JOHNER RIEHL: So do you see a lot of parents or first time parents or whenever babies are coming, do you have a lot of folks come in and that kind of changes their goals or that they’re trying to set some things?
SCOTT KILIAN: Yes, they come in the office and throughout, and just out in the community they know what I do and the conversation inevitably comes up. You know what I need to do. It’s a funny story. A buddy of mine who’s actually in the industry, was having his first child and we were out there having lunch and he was like, ‘Scott, you know, I just found out that we’re going to have a baby. I got to go in, I’ve got to up my insurance. I’ve got to change the beneficiary state plan. I’ve got to make sure’ I’m like, ‘hold on buddy. I mean, you need to be with your wife right now.’ So a lot of things are perspective. It’s what’s important and when is it important.
JOHNER RIEHL: And so then one of the big things in the topic of today’s show is, how are you going to care for that child, now that could mean a lot of different things. What do you guys think it means in the room, if you we’re saying we need to save money for child care? What’s that?
ANDY LOY: Childcare typically is defined as the cost to put your child into a daycare or nursery or preschool or nanny or the opportunity cost of staying home and foregoing working. And that’s typically how you define it in terms of, in a financial perspective. You know the 5/29 plan is certainly a childcare cost. The medical care certainly. Childcare cost buying toys, the food, the you know, what are you going to provide to
ERIN ESTEVES: Sports
SCOTT KILIAN: Sports, everything. These are all childcare cost.
VALERIE LOY: Even vacation breaks. You have to factor into that. A lot of people I know have to sort of save throughout the year, just to pay for these cost when they’re on breaks.
JOHNER RIEHL: Let’s look at these, first. Hurdles, I guess, these financial hurdlesand planning, that needs to be done. Do you recommend that it starts even before the baby’s born?
SCOTT KILIAN: I do, and where it starts is communication. Communication is the number one thing that must happen within a family in order to be square and straight on what it is that you want to do with your child in terms of child care. I mean, let’s face it. Childcare, school, all these things are merely tools. So we as parents are responsible for the care of our child, we make decisions based on best available choices to provide care and things for our children. So to be crystal clear on what it is, that we want to provide, you already know that your child is going to be this academic stud and we have to have a feeder, you know, school. You want to make sure that it’s a nanny or a stay at home, you know. You want to do all these things.
JOHNER RIEHL: But the first step is to really just identify.
SCOTT KILIAN: Its communication, it’s sitting down, it’s getting solid together on what it is.
JOHNER RIEHL: There’s so many topics that we’ve covered but that, really. That is such a key part. It’s communicating about it and talking about it before hand as opposed to in the moment
SCOTT KILIAN: And it can’t be emphasized enough. It really cannot be emphasized enough.
JOHNER RIEHL: So then after we’ve identified our goals, so what do we do, we call Scott Kilian or find another financial planner or what could families do
SCOTT KILIAN: Well that’s one option, once you’ve identified what it is that you want to do, well then, it’s how are we going to do it. This typically would be something along the lines of creating a budget. You would create a line item that says okay, well you know that it’s better for both of us to work as an example. So we need to provide child care, we know that we’ve got a couple of places in mind, we’ve got a couple of schools and houses. We’ve done the research; we know how much it’s probably going to cost. We put it in there just like we put it in our rent or mortgage payment or other non-discretionary expenses. I mean, these things have to come out of cash. You don’t want to use credit; you don’t want to take loans out for this, it’s completely irresponsible to do. To do that, you put it in there as a line up. And make sure that that amount is being funded each and every month, or however you pay for it.
JOHNER RIEHL: Do you see families in excel spreadsheets or their programs that, I mean, I think that the silver ball for families. Alright, what’s an easy way for us to track the budget, and it’s hard. I think every family is a little bit different.
SCOTT KILIAN: Sure and excel spreadsheets, I’ve seen those. I think nowadays people use mint or they use quicken or they use an aggregator that you can just plug in all ofyour bank accounts so then you can code them on how you’re spending. You can actually see in real time what’s happening; very powerful to see especially when you’re making decisions on how we re-allocate our spending, re-allocate our cash flow. You don’t really need a financial planner to do that. You just need to have the inclination, the time, the willingness to sit down and figure it out.
ANDY LOY: Yeah, that’s the hard part. It’s stickened to it, you go get it, you get all the big idea and then you’ll get your excels having all your expenses laid out and then in four months later.
JOHNER RIEHL: So what you say, Andy is that’s where you probably would need a financial planner.
ANDY LOY: Yeah, exactly.
SCOTT KILIAN: That would help stick to it.
ANDY LOY: Yeah. I mean, we haven’t talked to our financial planner over a year. I would imagine it probably a good idea to at least chorally sit down with somebody like that. If you’re not going to be as diligent as I should be.
SCOTT KILIAN: Yes, yes, it was funny, I was at a, we went to a community soccer practice, you know, and there’s all these parents with their kids go there. And I overheard two dads talking, and one of the dads was saying, ‘my wife’s making me see a financial planner, I don’t really need to go see a financial planner. Having him telling me I’m spending too much, I know I’m spending too much’ well, that’s precisely why he needs to see one, because he doesn’t seem to care that, yeah. Especially when we go back to our life goals, what do we want to accomplish and are we’re actually doing the things that helped up.
JOHNER RIEHL: We actually to try to track our expenses, and see exactly what the reality was. Because we don’t track everything, you just kind of have a vague idea. I would imagine that maybe it’s not, maybe that’s part of our problem. But we started saving every single receipt for everything. And just the act of doing it makes you realize, maybe we don’t need to be generating so many receipts.
SCOTT KILIAN: And that’s a great exercise to do. And you can see, you know it’s kind of you know other things too is actually going to be in the ATM and paying cash for everything. You may pay a hundred dollars for the grocery, yes, that’s a HUNDRED dollars. It’s not just a swipe, you know on the credit card. You can actually see and feel what it’s like to spend the money. And how does that feel for you? You know, and is that okay?
ERIN ESTEVES: My dad always talks about how, you know, in the seventies and in the eighties, my mom, how every month she would get out envelopes and she would label them and put the exact amount of cash for each category in the envelope and that was it.
SCOTT KILIAN: And that’s a verypopular way to do it and now in the digital age, you can actually open up bank accounts that will do the exact same thing. And you make your little deposits every single month, you know little incremental deposits and you’ve got your 12 or 15 bank accounts and you can see that. That’s a very popular and powerful way to do it. That’s a time tested way to do.
ERIN ESTEVES: But again it takes that discipline. If you don’t have that discipline, you know and I think that’s something that we, as parents, need to kind of learn and teach our kids, because nobody taught me.
ANDY LOY: Yeah if you’re not communicating these files you said earlier then it’s all going to go into shambles anyway and you have to really be on the same page with that.
SCOTT KILIAN: Yeah like Andy, Erin and I are going to take turns doing, playing the financial manager so that we each know what’s happening, you know, I’ll do it and then she’ll do it so that she knows how to get in to the bank accounts, how to look at certain you know because you don’t want to have this monopoly of information. One person knows how to do it, because what if you’re not around, god forbid. Then what happens.
ERIN ESTEVES: That’s a great idea. I like that idea
JOHNER RIEHL: It’s definitely. It’s just so interesting how important this is and how easy it is to just brush under the rug. Yeah.
ERIN ESTEVES: And probably an overpriced rug
ANDY LOY: Bought on credit
JOHNER RIEHL: But it’s Persian and it looks nice on the living room, especially with the accented walls, right?
ANDY LOY: It ties the room together.
JOHNER RIEHL: That’s right. Before we take a break, let’s look at, I guess let’s identify from a childcare perspective. What are some of the common goals that people might have and then we can look at ways that people can save their incentives or tips that are kind of a [17:11] I think there’s a ton of information to talk about. So I think that one, it’s like you’re doing, Valerie is you stay at home, like be able to stay home with their kids, there’s also send kids to daycare and then there’s couple ways to do that, that’s a whole topic that we’ll be covering soon as well. Then there’s like living help.
SCOTT KILIAN: That’s right nannies or pairs.
JOHNER RIEHL: And I guess there’s just one of babysitting? That people could get and
SCOTT KILIAN: Let’s not forget that some people may have access to this grandparents and some of the help there. You know my mom was living in Albuquerque for a while she just I just moved her back in September and this was all the first time ever that we actually have somebody regularly wanting to spend time, you know. So that’s been for real big
JOHNER RIEHL: For free
SCOTT KILIAN: So it’s funny coz my dad actually is like oh yeah, make sure that you talk about you know, the grandparents because it could be a great, a free way to do that.
JOHNER RIEHL: It is
SCOTT KILIAN: This idea of sharing, too. You may not want to or you may not be with your means to find a nanny but you could get a group of people together that could do some nanny co-ops. Nanny sharing.
JOHNER RIEHL: Let’s focus that on the second half. And I think that one thing with the grandparents thing, is we have a friend. It’s all perspective things, right. Oh my gosh, the holidays are so busy, It’s so hectic I have so much I have to do. Like she’s telling this to Christina like I have to go over and drop the kids off at my grandparents again just so I can get Christmas shopping done. And we’re like dude, because our grandparents don’t live there. So even when you do have access to those resources, or even if they are helping financially, sometimes you end up taking the hit. Otherwise and maybe spending more money or spending that money that you’re saving. Alright, let’s take a quick break and we’ll talk about these specific tips about saving money on childcare.
[Theme Music]
JOHNER RIEHL: Welcome back, everybody to Parent Savers. Today we’re talking about ways to save money on childcare with Scott Kilian. Let’s start this segment off with a question from our listeners. Where did this one come through from, Erin?
ERIN ESTEVES: This one we got from Facebook and it’s from Kathleen.
JOHNER RIEHL: Okay
ERIN ESTEVES: And she is seven months pregnant and she’s very worried because she’s a single mom or she will be a single mom, and she can barely make rent. Now, she’s wondering how does she save for childcare.
SCOTT KILIAN: Well, if her income is really low, then there are some, the governments would usually step in and help with some of this and really that what would you look at here is 200% of the federal poverty level. Something around, for family for I know it’s like if you make 47,000 or so if she’s single and one it’s going to be a lot less than that. Though they usually step in, the states, you can get cow works and some of the social services areas to find subsidies for daycare. Usually people will step in and you can also look at some private foundations as well that specialize in this. And a warm buffet house one and so you can go out and seek those resources, so if she has access to a computer, you can Google any one of these things then come out go out and just fill out an application and she can do that. And then, but then the other thing I would recommend to her is do a budget. You know exactly what’s she’s making but what she has left over to contribute. Get crystal clear on her own financial position. And then see where other people can step in and help.
ERIN ESTEVES: Great. Thank you
JOHNER RIEHL: That’s it. I mean, it’s interesting. I wonder how many of those resources are available to you know, focused in Kathleen’s situation that maybe she doesn’t know about. But they’re out there to help. But I have heard of things like flex spending accounts.
SCOTT KILIAN: That’s true, if you’re fortunate enough to have a company that offers a flexible spending account, then you can contribute, and it’s typically up to 5000 dollars, that’s the first thing that comes out before taxes that qualifies that’s not taxed, when it comes out you can use that to blow kindergarten for those care expenses. Now that, you have to weigh that against the childcare dependent credit that you would get which is 3000 dollars for one child or 6000 dollars of expenses for more than one. If you use your FSA, it kind of offsets the other, so the more money you make, and you have an FSA available, you’re typically generally better off using that, the lower money that you make, you’re typically and generally better off using the tax crest. You kind of have to crunch the numbers and see what works out better for you. Or just not file taxes.
ANDY LOY: Do you recommend that as a financial planner?
EREN ESTEVES: Me and Mommy Media does not promote tax evasion.
SCOTT KILIAN: One thing that I don’t really hear too much talked about but I think is really important talk about is this idea of protection when you think about your family. How do you maintain your house? You know if something were to happen to an earning spouse or partner, where, they no longer wouldn’t be able to earn the money, would the family be able to continue to function just as it was before? And so you have to have, do you have another option for communication with your family to determine how that’s going to occur?
One way that you would do this is by having a healthy emergency fund. Typically we’re talking two to six months of expenses that could help in the short term. Another thing to take a look at is disability insurance. If you, for some reason cannot work and you can get this long term disability insurance which could help fund over the course of time as you recover and try to find additional types of, additional work. One of the easiest things that you can do is just take a look at your beneficiary designations on your retirement accounts. Is it the way that you want them? Yeah, a lot of time, we live in an area where there’s a lot of ex spouses out there and such and sometimes the beneficiaries don’t get changed and we have problems there so this should be checked on a regular basis, make sure that everything is set there, always have a primary and a contingent beneficiary, get yourself tight there. And then finally, you want to look at your life insurance. And make sure you’re properly covered there, especially if you have young kids growing up. You probably have an insurance need; you want to figure that out, and get the appropriate coverage there.
ANDY LOY: Do you have any recommendations on the disability insurance? If it’s not offered by the employer? Or what that might cost per month roughly?
SCOTT KILIAN: Well, it depends. Yeah it depends upon what you do and you have to go through a certain, so if you’re part of any kind of organization, you feel like you know you first for instance if you’re in a, if you’re an accountant and you’re part of the [24:24] or financial plan or involved in NAFLA or FPA. A lot of times these groups will offer discounts on long term disability but you’d want to talk to a competent broker and who deals specifically with situations like that. Apply to you, and have them provide you with some quotes.
VALERIE LOY: Just a question about life insurance, do you recommend like any specific term life insurance?
SCOTT KILIAN: Well, there’s a case to be made for all different forms in general, if you’re just looking for it but I typically look for is just term insurance. You want the purest form of insurance to cover it and that’s typically through when your kids are no longer under your care and when they’re through college, and then you can stop that.
JOHNER RIEHL: Okay, so now I’m getting scared because we’re trying to save money for childcare, and now I have to get more insurance and more. So how do we balance this? Maybe we can look at it, from like let’s say if Valerie comes in your office. Valerie that they want to be they say look now that we’re having our child. I want to be a stay at home mom. What are the things that you would look at, and how would you fit saying well we need to have insurance and in support and preparing the plan for college, but how could you help fit that in the short term goal of making her staying at home a reality?
SCOTT KILIAN: Sure so, the first thing going back to what we’re talking about in the beginning is what are your goals? I can’t stress that enough and it sounds like a broken record but really, so we would talk about, look, here’s a blank sheet of paper, what are your goals, what do you want to accomplish for your family, for your kids and then we would make sure to get to the root of everything and then we would create a hierarchy of that. I don’t like to think of budgeting as like a financial diet or as a scarcity. I think of it as an abundance. This is the thing that we’re trying to do to accomplish. One of the biggest, one of the greatest powers that we have is to use the dollar that we earn in some way. We can spend it, we can use it to make more money or we can use it to improve our quality of life and that’s what we want to do. So, what we want to do is create this hierarchy and with education, say, look. Okay, Valerie. This is what you and Andy have said that are really important to you. This is what you’ve identified here’s what the income that’s coming in. So let’s start making a plan. It’s not going to happen overnight, but this is financial planning. It’s a plan, it’s a process. It’s a living and breathing
JOHNER RIEHL: And I guess what I’m really hearing, I’m just thinking about is so much I feel like of modern life for many of us is spent wishing, thinking about what we don’t have. Thinking about how to get what we don’t have or thinking about how to fill the gap from where we are to somewhere. But really, what we need to be doing is focusing on what we do have. And then prioritizing on what’s coming from that pot. So we do have a pot of money. That pot of money is not twice the size that it is. So as we prioritize our goals, how can we make it all fit in that pot, knowing that we’re making decisions that you know what, buying that shuffle board table is really important to me right now. So that’s going to take a hit, that’s going to have impact on everything else now.
SCOTT KILIAN: Absolutely and really it comes out a couple of things, and one is can you maintain your current, have you identified and created a plan for you that you’re comfortable with? Great! Can you maintain it if something were to happen some contingency planning which we have talked about a little bit on the protection side, and then once you’re able to do that, can you grow your assets to help down the road for yourself, for retirement, for your kids.
JOHNER RIEHL: So let’s say you want to send your kids to day care, and like I said, that’s thetopic that we’re going to be diving in so if you have questions about that, send them on in. What are some tips maybe if are going to daycare out that you can?
SCOTT KILIAN: Yes, so going to daycare, you kind of have to think creatively. If you go okay wow, that’s a really expensive bill but I really want to send my child to daycare. Let’s start thinking creatively. Can I volunteer at the daycare? Can I get a part time, you know. Can I get a discount for participating. If I work, will my employer help participate in. Sometimes they’ve got these policies with all help for childcare expenses. Maybe there’s a childcare facility inside your work that you’re comfortable with and you can look at that, maybe there’s some fringe benefit. It really comes down to thinking as creatively as possible. Seeing how you can participate, give a benefit to the daycare, they’ll give you benefit back. You know, maybe.
JOHNER RIEHL: And so the college workers you know works. They even offer deals on their childcare on campus which is part of their program, to alumni. So, I mean there’s a price for faculty and staff, students, but alumni also has access to that so maybe that’s another
ERIN ESTEVES: Oh, that’s great.
JOHNER RIEHL: I mean if you live in the same time when you’re at school, maybe there’s a place on campus. Where there’s it’s all the more affordable because there’s some students in training, but they’re obviously supervised and they’re not the ones who handle the kids.
SCOTT KILIAN: One of the things too that I’ve found that works really well, that works very well for me is joining online groups of likeminded individuals that have actually done the things that you’d like to do. So like for me, you know I’m part of a natural family and this group, I’m also part of a positive parenting group and you know, financial things comes out from time to time and child care comes from time to time and I get little tidbits here and there. I can actually see how some of these folks have gone through and things that they wanted to do through their own diligence and research and efforts.
JOHNER RIEHL: So those are easy to find these days you go to a meetup
SCOTT KILIAN: Meetup or yahoo or something like that, so.
ANDY LOY: Also a lot of churches offer daycare as well. They’re generally a lot more discounted than the standard
SCOTT KILIAN: That’s a great point absolutely!
JOHNER RIEHL: And it’s free during service hours
ANDY LOY: Yeah. We’re Catholic, we’re luthrine, we’re [inaudible]
JOHNER RIEHL: On Monday I’m catholic, on Tuesday..
SCOTT KILIAN: Do I qualify for discount? Yes I am. But I think this goes back to the other question earlier, should we start doing this before the baby’s born, sure before the baby’s born, absolutely. You can start the research now. You can start the planning process now. You probably have a little more time before the baby’s born than you will after the baby’s born to do some of the stuff. So if you’re in that position, go for it.
JOHENR RIEHL: We talked about utilizing grandparents, but another really interesting idea is sharing care. You know, for anyone that’s priced out, nannies or even au pairs and I mean there’s benefit. My brother-in-law in New York they got an au pair but she spent Christmas with us, and she spent thanksgiving with us. But maybe there’s ways to share it with the family that all the sudden, it cuts the expense drastically down.
SCOTT KILIAN: Absolutely, and this is through these, through the online groups, too. You can always just post a question or through a community. Hey, is anybody looking for certain [31:29]. We’re going through this right now and when Alex’s done with his school we need find care for him through the summer time. So we’re trying to pool other parents to kind of do that and it’s just a discussion it’s just what you feel comfortable with.
JOHNER RIEHL: It is true. It’s good to remember that you know what you’re saying. It’s not, we’re not the first one’s that have gone through this. There are other people that have gone through it.
SCOTT KILIAN: We’re not reinventing the wheel here. If you can find a group of people that you’re comfortable with, friends of yours that are likeminded, that you’re comfortable, and that you’re confident, you also have to vet this, you know. A lot of times you’ll hear a lot garbage about there, too.
ANDY LOY: In social media, it’s so much easier now to be able to group together and get like-minded people altogether and share common goal.
SCOTT KILIAN: One of the things I want to mention I know we have tax planning, on here. And I think that what’s really important here is again going back to communication, you know. So you’ve got what you want to accomplish for the family. So you got a potentially flexible savings account, you got potentially a dependent care credit, you got a child care tax credit, that you can use on the tax return. But when you’re making a decision of should somebody stay home, you know one of the big benefits there is I could actually move you into a lower tax bracket, too because the income is not as much. So there are some things to think about here. And you can think about other things too, like both spouses are working, then you’re more likely to eat out ‘cause who’s going to prepare the meals but then you can make better decisions grocery wise, you have to buy a lot of clothes, for work, you don’t have to do that, and you’re stay at home and so the expenses can be restricted, so let’s think outside the box here when we’re talking about that. And may make a lot of sense because preschool and daycare is not required.
ANDY LOY: It is nice to spend time with your kids, too for the first few years.
SCOTT KILIAN: Let’s face it, nobody replaces mommy and daddy.
JOHNER RIEHL: Okay, well thanks so much Scott for joining us. For more information about this, be sure to check information on our website, on our episode page on ParentSavers.com, we’ll continue the conversation for members of our Parent Savers club after the show. It’s going to tell us a little bit more about some of the government programs and applying for flex spending and I’ve got a little bit of flex spending stuff I want to talk about as well. For more information about the Parent Savers club and how you can be part of it, please visit our website at www.ParentSaversClub.com
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Or dependable sitters that can cover scheduled day-time events such as doctor’s appointments, if you need someone on short notice, then you’re going to need to find someone who lives nearby and responds quickly to requests. Also be sure to confirm the sitter’s transportation situation. You’ll need to pick them up, or do they have a reliable way to get to your home. Some sitters are only looking for occasional work on the weekends. While others maybe up for consistent part-time work, so set expectations up front.
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[Theme music]
JOHNER RIEHL: That wraps up our show for Parent Savers today. We appreciate you listening. Don’t forget to check out our sister shows Preggie Pals for expecting parents, the Boob group for moms who breastfeed their babies, and twin talks for parents of multiples. Next week we’re going to be talking about the legalities of parenting, some of the rights and responsibilities that parents have, and when they should start thinking about that. I guess we’re starting off the new year, with a lot of making sure that our financial and legal houses are in order. So thanks for listening, this is Parent Savers, empowering new parents.
[Disclaimer]
This has been a New Mommy Media production. Information and material contained in this episode are presented for educational purposes only. Statements and opinions expressed in this episode are not necessarily those of New Mommy Media and should not be considered facts. Though information in which areas are related to be accurate, it is not intended to replace or substitute for professional, Medical or advisor care and should not be used for diagnosing or treating health care problem or disease or prescribing any medications. If you have questions or concerns regarding your physical or mental health or the health of your baby, please seek assistance from a qualified health care provider.
[00:36:01]
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Episode Transcript
Parent Savers
Saving Money on Childcare
Please be advised, this transcription was performed from a company independent of New Mommy Media, LLC. As such, translation was required which may alter the accuracy of the transcription.
[Theme Music]
SCOTT KILIAN: Providing a quality financial life for our family is a goal shared by most people. While there’s no way to prepare for all the curves and bumps that we’ve all faced, there are some things that we can prepare for and childcare’s one of those things. Hello everyone, I’m Scott Kilian, a certified financial planner practitioner, and throughout my fourteen years in financial planning, I’ve had the opportunity to talk with new families on some things that they absolutely they need to be aware of as they make financial decisions with their families. Today we’ll be focusing on childcare expenses. This is parent savers, episode 89.
[Theme Music/ Intro]
JOHNER RIEHL: Welcome to Parent Savers everybody; we’re broadcasting from the Birth Education Center in San Diego. Parent Savers is your weekly online on-the-go support group for parents from conception to kindergarten. I’m your host Johner Riehl. Thanks again to all of our loyal listeners who join us week in and week out. And thanks also to those of who you are listening for the first time. As you may know you can join our parent savers club and receive access to special bonus content after each new show plus special giveaways and discounts from time to time.
And if you haven’t already please make sure to download the free parent savers app available in the android and iTunes marketplaces so you can automatically have access to all the great parenting advice and conversation we have on parent savers every week. Let’s start this week’s conversation by meeting everyone who’s joining us, I’ll actually start. As you guys know I’m Johner Riehl, and we have, I have three boys, Quinner is not quite seven but he’s about to turn seven in three days from when this is released. Whittaker is four and Zyler is two. Now that I have three kids, I know why people forget the ages coz they’re always turning different ages and its coming up so, yeah Andy
ANDY LOY: Hi my name is Andy Loy and we have a six year old named Devon and I’m here with my wife Valerie
VALERIE LOY: Hello, I’m currently a stay at home mom and we’re just raising our son. He’ll be seven this year
JOHNER RIEHL: Nice
VALERIE LOY: Yeah
ERIN ESTEVES: And I’m Erin Esteves the producer, also known as Oh Gee Mama Sita. I have one little boy. He just turned two and yeah, I need sleep.
JOHNER RIEHL: Right. And money right and that’s why we’re talking to Scott
ERIN ESTEVES: I would give up money for sleep.
SCOTT KILIAN: More money more sleep
JOHNER RIEHL: Yes. Alright Scott. Scott’s joined us before but he’s our expert today
SCOTT KILIAN: I’m Scott Kilian and I’ve got a four year old boy, Alex.
JOHNER RIEHL: Nice. Alright, welcome to the show.
[Theme music]
JOHNER RIEHL: Alright, before we dive in today’s topic, we’re going to look at another app which we do from time to time here on Parent Savers. And it’s an app that we’ve all checked out ahead of time and we’ll discuss it and at the end of the segment we’ll let you know whether or not it’s worth to be recommended or if it’s something you should pass on. And today, we’re talking about preschool games. We’ve got a link to it on the episode page on the website. And it’s actually g-ass preschool games because I think preschool games are a kind of a common name on the app store, and so this particular one, it’s actually really cool. I tested it out with my four year old who is right in the targeted title, preschool games. It’s a variety of different games, that you can either pick the ones that you like or go through a, it generates different games, either match the object or which one is different or there’s a maze in there. And it’s actually, it’s really cool and swiftly done and I think there’s really good artwork. What did you guys think when you played it?
ANDY LOY: The artwork was great, the graphics were very, like, bold and popped out and really could grab little kids’ attention, I thought.
VALERIE LOY: Yeah, I thought it was very engaging for them to feel and pretty simple.
JOHNER RIEHL: Yeah. And so my four year old jumped right into it and he, once he saw the maze one, that was his absolute favorite. Because he loves, like it’s a chance for him to do mazes and figure out and it’s a really easy interphase with the big, purple dot that can maneuver through.
ANDY LOY: One of the things that I, when I was looking at it, the music isn’t as annoying as a lot of the other apps. I guess I mean, I’ve seen some apps and it’s just like.
JOHNER RIEHL: I loved it. That’s a pro. The music isn’t as annoying
ANDY LOY: Yeah. It’s very subtle.
ERIN ESTEVES: I really liked it. My little boy, he’s only, two. So I couldn’t get him to stand still long enough, to like, actually try any of the games,
JOHNER RIEHL: But that’s everything.
ERIN ESTEVES: But that’s everything, yeah, unless it’s food or Curious George. I totally see this as something that he will be able to sit down, and look at eventually. And I think it’s great. I love it. I’m definitely giving it thumbs up.
JOHNER RIEHL: You know, I think, yeah. I’m gonna give it a thumbs up, too. There’s one thing I didn’t like about it, and I was playing on the iPhone version, and I understand that people put ads in apps so I don’t, but there are ads in the app and the ads actually interfere with the, you know, progress of the game. And even my fingers, in coordination, which theoretically are better than a preschooler’s. But there are
ERIN ESTEVES: Again, theory
JOHNER RIEHL: Yeah. When I accidentally hit the ad sometimes when I’m trying to skip and I think that’s something that, I imagine if we bring that up or put it in the comments, even on the app, that’s something that could be fixed, so I wouldn’t want to ding it for that. Because I think the content is educational enough it’s not just like there’s find the difference and there’s match games. There’s enough of an educational component and the fun component but it’s definitely worth recommending. It’s a thumbs up for me. What do you guys think?
ANDY LOY: I’m giving it a thumb up, too. I think if they do the, usually the paid version, they’d remove the ads sometimes. I’m not sure on this game.
JOHNER RIEHL: Maybe that’s what it was. Maybe I was checking out the free version, and then there’s also the paid version.
ANDY LOY: Yeah. So that might help.
JOHNER RIEHL: If you are playing the free version, just be careful about those ads. Because they’re easy to accidentally click on. Even if your kid knows to push the red X to progress, the ad is blocking half the X.
ERIN ESTEVES: Well that’s why you have to make sure that your iTunes account requires a password. So your kids don’t accidentally order a bunch of stuff. They get that ad.
VALERIE LOY: We experienced that.
ANDY LOY: Yeah
JOHNER RIEHL: Yeah. Check it out, we’ve got a link to it in the website, preschool games and thumbs up from Parent Savers.
ANDY LOY: Thumbs up.
VALERIE LOY: Yeah.
ERIN ESTEVES: Woo-hoo!
[Theme music/ intro]
JOHNER RIEHL: Okay, let’s dive in the conversation today. Today’s topic is ten ways to save money on child care and I think we’re going to have at least ten. If not more, but ten is a nice round number. Today we’re talking with Scott Kilian, he’s going to tell us more about ways that families can kind of maximize their child care dollars and kind of even the different aspects of childcare that we might’ve not been thinking about. So, welcome, Scott.
SCOTT KILIAN: Thank you for having me.
JOHNER RIEHL: Let’s I guess, start with you know, your financial planner practitioner. Let’s talk about what that means and kind of what financial planning is coz I think a lot of people have a lot of different perceptions of it and so let’s just talk about what it is that you do and what you think financial planning is.
SCOTT KILIAN: Sure, the financial planning process is nothing more than, it’s just a process of determining whether and how much an individual or family can meet their life goals through the proper management of their financial resources. There’s a lot of powerful words in there, you know, we’re talking about proper management, financial resources, life goals, and these are heavy words. And we help, I mean I help my clients with identifying their life goals and then helping them achieve them through proper education. That’s really what it comes down to.
JOHNER RIEHL: And so really the first step is kind of identifying, you know, what it is you’re even talking about or desiring the safe will for it
SCOTT KILIAN: Absolutely, it’s the first step and it’s a very long step. Because it’s something that, not very many people are crystal clear on it. And we know this because a lot of times they will make decisions that are countered to their life goals. They will make decisions that are countered to what they tell us is really important to them. If they want to save for retirement or child care expenses, and then yet they would want to go out and buy the expensive car that uses resources that would otherwise fund what they’ve just told us their life goals are. Well, you have some conflict there.
JOHNER RIEHL: I think generally speaking, once you start looking at your goals, whether it’s on the huge level or even in a smaller level, you realize how much, how well these little decisions, you know, can be countered to that. And a lot of them are just taking a look at it and, you know, kind of planning and then maybe changing behaviors to fit the goal
SCOTT KILIAN: And how impactful they are when you nail it. When you sit down with your partner and you say, ‘look, this is really what we want to accomplish, really and truly above all else. We want to make sure this happens.’ That communication is rare these days, I found.
JOHNER RIEHL: So do you see a lot of parents or first time parents or whenever babies are coming, do you have a lot of folks come in and that kind of changes their goals or that they’re trying to set some things?
SCOTT KILIAN: Yes, they come in the office and throughout, and just out in the community they know what I do and the conversation inevitably comes up. You know what I need to do. It’s a funny story. A buddy of mine who’s actually in the industry, was having his first child and we were out there having lunch and he was like, ‘Scott, you know, I just found out that we’re going to have a baby. I got to go in, I’ve got to up my insurance. I’ve got to change the beneficiary state plan. I’ve got to make sure’ I’m like, ‘hold on buddy. I mean, you need to be with your wife right now.’ So a lot of things are perspective. It’s what’s important and when is it important.
JOHNER RIEHL: And so then one of the big things in the topic of today’s show is, how are you going to care for that child, now that could mean a lot of different things. What do you guys think it means in the room, if you we’re saying we need to save money for child care? What’s that?
ANDY LOY: Childcare typically is defined as the cost to put your child into a daycare or nursery or preschool or nanny or the opportunity cost of staying home and foregoing working. And that’s typically how you define it in terms of, in a financial perspective. You know the 5/29 plan is certainly a childcare cost. The medical care certainly. Childcare cost buying toys, the food, the you know, what are you going to provide to
ERIN ESTEVES: Sports
SCOTT KILIAN: Sports, everything. These are all childcare cost.
VALERIE LOY: Even vacation breaks. You have to factor into that. A lot of people I know have to sort of save throughout the year, just to pay for these cost when they’re on breaks.
JOHNER RIEHL: Let’s look at these, first. Hurdles, I guess, these financial hurdlesand planning, that needs to be done. Do you recommend that it starts even before the baby’s born?
SCOTT KILIAN: I do, and where it starts is communication. Communication is the number one thing that must happen within a family in order to be square and straight on what it is that you want to do with your child in terms of child care. I mean, let’s face it. Childcare, school, all these things are merely tools. So we as parents are responsible for the care of our child, we make decisions based on best available choices to provide care and things for our children. So to be crystal clear on what it is, that we want to provide, you already know that your child is going to be this academic stud and we have to have a feeder, you know, school. You want to make sure that it’s a nanny or a stay at home, you know. You want to do all these things.
JOHNER RIEHL: But the first step is to really just identify.
SCOTT KILIAN: Its communication, it’s sitting down, it’s getting solid together on what it is.
JOHNER RIEHL: There’s so many topics that we’ve covered but that, really. That is such a key part. It’s communicating about it and talking about it before hand as opposed to in the moment
SCOTT KILIAN: And it can’t be emphasized enough. It really cannot be emphasized enough.
JOHNER RIEHL: So then after we’ve identified our goals, so what do we do, we call Scott Kilian or find another financial planner or what could families do
SCOTT KILIAN: Well that’s one option, once you’ve identified what it is that you want to do, well then, it’s how are we going to do it. This typically would be something along the lines of creating a budget. You would create a line item that says okay, well you know that it’s better for both of us to work as an example. So we need to provide child care, we know that we’ve got a couple of places in mind, we’ve got a couple of schools and houses. We’ve done the research; we know how much it’s probably going to cost. We put it in there just like we put it in our rent or mortgage payment or other non-discretionary expenses. I mean, these things have to come out of cash. You don’t want to use credit; you don’t want to take loans out for this, it’s completely irresponsible to do. To do that, you put it in there as a line up. And make sure that that amount is being funded each and every month, or however you pay for it.
JOHNER RIEHL: Do you see families in excel spreadsheets or their programs that, I mean, I think that the silver ball for families. Alright, what’s an easy way for us to track the budget, and it’s hard. I think every family is a little bit different.
SCOTT KILIAN: Sure and excel spreadsheets, I’ve seen those. I think nowadays people use mint or they use quicken or they use an aggregator that you can just plug in all ofyour bank accounts so then you can code them on how you’re spending. You can actually see in real time what’s happening; very powerful to see especially when you’re making decisions on how we re-allocate our spending, re-allocate our cash flow. You don’t really need a financial planner to do that. You just need to have the inclination, the time, the willingness to sit down and figure it out.
ANDY LOY: Yeah, that’s the hard part. It’s stickened to it, you go get it, you get all the big idea and then you’ll get your excels having all your expenses laid out and then in four months later.
JOHNER RIEHL: So what you say, Andy is that’s where you probably would need a financial planner.
ANDY LOY: Yeah, exactly.
SCOTT KILIAN: That would help stick to it.
ANDY LOY: Yeah. I mean, we haven’t talked to our financial planner over a year. I would imagine it probably a good idea to at least chorally sit down with somebody like that. If you’re not going to be as diligent as I should be.
SCOTT KILIAN: Yes, yes, it was funny, I was at a, we went to a community soccer practice, you know, and there’s all these parents with their kids go there. And I overheard two dads talking, and one of the dads was saying, ‘my wife’s making me see a financial planner, I don’t really need to go see a financial planner. Having him telling me I’m spending too much, I know I’m spending too much’ well, that’s precisely why he needs to see one, because he doesn’t seem to care that, yeah. Especially when we go back to our life goals, what do we want to accomplish and are we’re actually doing the things that helped up.
JOHNER RIEHL: We actually to try to track our expenses, and see exactly what the reality was. Because we don’t track everything, you just kind of have a vague idea. I would imagine that maybe it’s not, maybe that’s part of our problem. But we started saving every single receipt for everything. And just the act of doing it makes you realize, maybe we don’t need to be generating so many receipts.
SCOTT KILIAN: And that’s a great exercise to do. And you can see, you know it’s kind of you know other things too is actually going to be in the ATM and paying cash for everything. You may pay a hundred dollars for the grocery, yes, that’s a HUNDRED dollars. It’s not just a swipe, you know on the credit card. You can actually see and feel what it’s like to spend the money. And how does that feel for you? You know, and is that okay?
ERIN ESTEVES: My dad always talks about how, you know, in the seventies and in the eighties, my mom, how every month she would get out envelopes and she would label them and put the exact amount of cash for each category in the envelope and that was it.
SCOTT KILIAN: And that’s a verypopular way to do it and now in the digital age, you can actually open up bank accounts that will do the exact same thing. And you make your little deposits every single month, you know little incremental deposits and you’ve got your 12 or 15 bank accounts and you can see that. That’s a very popular and powerful way to do it. That’s a time tested way to do.
ERIN ESTEVES: But again it takes that discipline. If you don’t have that discipline, you know and I think that’s something that we, as parents, need to kind of learn and teach our kids, because nobody taught me.
ANDY LOY: Yeah if you’re not communicating these files you said earlier then it’s all going to go into shambles anyway and you have to really be on the same page with that.
SCOTT KILIAN: Yeah like Andy, Erin and I are going to take turns doing, playing the financial manager so that we each know what’s happening, you know, I’ll do it and then she’ll do it so that she knows how to get in to the bank accounts, how to look at certain you know because you don’t want to have this monopoly of information. One person knows how to do it, because what if you’re not around, god forbid. Then what happens.
ERIN ESTEVES: That’s a great idea. I like that idea
JOHNER RIEHL: It’s definitely. It’s just so interesting how important this is and how easy it is to just brush under the rug. Yeah.
ERIN ESTEVES: And probably an overpriced rug
ANDY LOY: Bought on credit
JOHNER RIEHL: But it’s Persian and it looks nice on the living room, especially with the accented walls, right?
ANDY LOY: It ties the room together.
JOHNER RIEHL: That’s right. Before we take a break, let’s look at, I guess let’s identify from a childcare perspective. What are some of the common goals that people might have and then we can look at ways that people can save their incentives or tips that are kind of a [17:11] I think there’s a ton of information to talk about. So I think that one, it’s like you’re doing, Valerie is you stay at home, like be able to stay home with their kids, there’s also send kids to daycare and then there’s couple ways to do that, that’s a whole topic that we’ll be covering soon as well. Then there’s like living help.
SCOTT KILIAN: That’s right nannies or pairs.
JOHNER RIEHL: And I guess there’s just one of babysitting? That people could get and
SCOTT KILIAN: Let’s not forget that some people may have access to this grandparents and some of the help there. You know my mom was living in Albuquerque for a while she just I just moved her back in September and this was all the first time ever that we actually have somebody regularly wanting to spend time, you know. So that’s been for real big
JOHNER RIEHL: For free
SCOTT KILIAN: So it’s funny coz my dad actually is like oh yeah, make sure that you talk about you know, the grandparents because it could be a great, a free way to do that.
JOHNER RIEHL: It is
SCOTT KILIAN: This idea of sharing, too. You may not want to or you may not be with your means to find a nanny but you could get a group of people together that could do some nanny co-ops. Nanny sharing.
JOHNER RIEHL: Let’s focus that on the second half. And I think that one thing with the grandparents thing, is we have a friend. It’s all perspective things, right. Oh my gosh, the holidays are so busy, It’s so hectic I have so much I have to do. Like she’s telling this to Christina like I have to go over and drop the kids off at my grandparents again just so I can get Christmas shopping done. And we’re like dude, because our grandparents don’t live there. So even when you do have access to those resources, or even if they are helping financially, sometimes you end up taking the hit. Otherwise and maybe spending more money or spending that money that you’re saving. Alright, let’s take a quick break and we’ll talk about these specific tips about saving money on childcare.
[Theme Music]
JOHNER RIEHL: Welcome back, everybody to Parent Savers. Today we’re talking about ways to save money on childcare with Scott Kilian. Let’s start this segment off with a question from our listeners. Where did this one come through from, Erin?
ERIN ESTEVES: This one we got from Facebook and it’s from Kathleen.
JOHNER RIEHL: Okay
ERIN ESTEVES: And she is seven months pregnant and she’s very worried because she’s a single mom or she will be a single mom, and she can barely make rent. Now, she’s wondering how does she save for childcare.
SCOTT KILIAN: Well, if her income is really low, then there are some, the governments would usually step in and help with some of this and really that what would you look at here is 200% of the federal poverty level. Something around, for family for I know it’s like if you make 47,000 or so if she’s single and one it’s going to be a lot less than that. Though they usually step in, the states, you can get cow works and some of the social services areas to find subsidies for daycare. Usually people will step in and you can also look at some private foundations as well that specialize in this. And a warm buffet house one and so you can go out and seek those resources, so if she has access to a computer, you can Google any one of these things then come out go out and just fill out an application and she can do that. And then, but then the other thing I would recommend to her is do a budget. You know exactly what’s she’s making but what she has left over to contribute. Get crystal clear on her own financial position. And then see where other people can step in and help.
ERIN ESTEVES: Great. Thank you
JOHNER RIEHL: That’s it. I mean, it’s interesting. I wonder how many of those resources are available to you know, focused in Kathleen’s situation that maybe she doesn’t know about. But they’re out there to help. But I have heard of things like flex spending accounts.
SCOTT KILIAN: That’s true, if you’re fortunate enough to have a company that offers a flexible spending account, then you can contribute, and it’s typically up to 5000 dollars, that’s the first thing that comes out before taxes that qualifies that’s not taxed, when it comes out you can use that to blow kindergarten for those care expenses. Now that, you have to weigh that against the childcare dependent credit that you would get which is 3000 dollars for one child or 6000 dollars of expenses for more than one. If you use your FSA, it kind of offsets the other, so the more money you make, and you have an FSA available, you’re typically generally better off using that, the lower money that you make, you’re typically and generally better off using the tax crest. You kind of have to crunch the numbers and see what works out better for you. Or just not file taxes.
ANDY LOY: Do you recommend that as a financial planner?
EREN ESTEVES: Me and Mommy Media does not promote tax evasion.
SCOTT KILIAN: One thing that I don’t really hear too much talked about but I think is really important talk about is this idea of protection when you think about your family. How do you maintain your house? You know if something were to happen to an earning spouse or partner, where, they no longer wouldn’t be able to earn the money, would the family be able to continue to function just as it was before? And so you have to have, do you have another option for communication with your family to determine how that’s going to occur?
One way that you would do this is by having a healthy emergency fund. Typically we’re talking two to six months of expenses that could help in the short term. Another thing to take a look at is disability insurance. If you, for some reason cannot work and you can get this long term disability insurance which could help fund over the course of time as you recover and try to find additional types of, additional work. One of the easiest things that you can do is just take a look at your beneficiary designations on your retirement accounts. Is it the way that you want them? Yeah, a lot of time, we live in an area where there’s a lot of ex spouses out there and such and sometimes the beneficiaries don’t get changed and we have problems there so this should be checked on a regular basis, make sure that everything is set there, always have a primary and a contingent beneficiary, get yourself tight there. And then finally, you want to look at your life insurance. And make sure you’re properly covered there, especially if you have young kids growing up. You probably have an insurance need; you want to figure that out, and get the appropriate coverage there.
ANDY LOY: Do you have any recommendations on the disability insurance? If it’s not offered by the employer? Or what that might cost per month roughly?
SCOTT KILIAN: Well, it depends. Yeah it depends upon what you do and you have to go through a certain, so if you’re part of any kind of organization, you feel like you know you first for instance if you’re in a, if you’re an accountant and you’re part of the [24:24] or financial plan or involved in NAFLA or FPA. A lot of times these groups will offer discounts on long term disability but you’d want to talk to a competent broker and who deals specifically with situations like that. Apply to you, and have them provide you with some quotes.
VALERIE LOY: Just a question about life insurance, do you recommend like any specific term life insurance?
SCOTT KILIAN: Well, there’s a case to be made for all different forms in general, if you’re just looking for it but I typically look for is just term insurance. You want the purest form of insurance to cover it and that’s typically through when your kids are no longer under your care and when they’re through college, and then you can stop that.
JOHNER RIEHL: Okay, so now I’m getting scared because we’re trying to save money for childcare, and now I have to get more insurance and more. So how do we balance this? Maybe we can look at it, from like let’s say if Valerie comes in your office. Valerie that they want to be they say look now that we’re having our child. I want to be a stay at home mom. What are the things that you would look at, and how would you fit saying well we need to have insurance and in support and preparing the plan for college, but how could you help fit that in the short term goal of making her staying at home a reality?
SCOTT KILIAN: Sure so, the first thing going back to what we’re talking about in the beginning is what are your goals? I can’t stress that enough and it sounds like a broken record but really, so we would talk about, look, here’s a blank sheet of paper, what are your goals, what do you want to accomplish for your family, for your kids and then we would make sure to get to the root of everything and then we would create a hierarchy of that. I don’t like to think of budgeting as like a financial diet or as a scarcity. I think of it as an abundance. This is the thing that we’re trying to do to accomplish. One of the biggest, one of the greatest powers that we have is to use the dollar that we earn in some way. We can spend it, we can use it to make more money or we can use it to improve our quality of life and that’s what we want to do. So, what we want to do is create this hierarchy and with education, say, look. Okay, Valerie. This is what you and Andy have said that are really important to you. This is what you’ve identified here’s what the income that’s coming in. So let’s start making a plan. It’s not going to happen overnight, but this is financial planning. It’s a plan, it’s a process. It’s a living and breathing
JOHNER RIEHL: And I guess what I’m really hearing, I’m just thinking about is so much I feel like of modern life for many of us is spent wishing, thinking about what we don’t have. Thinking about how to get what we don’t have or thinking about how to fill the gap from where we are to somewhere. But really, what we need to be doing is focusing on what we do have. And then prioritizing on what’s coming from that pot. So we do have a pot of money. That pot of money is not twice the size that it is. So as we prioritize our goals, how can we make it all fit in that pot, knowing that we’re making decisions that you know what, buying that shuffle board table is really important to me right now. So that’s going to take a hit, that’s going to have impact on everything else now.
SCOTT KILIAN: Absolutely and really it comes out a couple of things, and one is can you maintain your current, have you identified and created a plan for you that you’re comfortable with? Great! Can you maintain it if something were to happen some contingency planning which we have talked about a little bit on the protection side, and then once you’re able to do that, can you grow your assets to help down the road for yourself, for retirement, for your kids.
JOHNER RIEHL: So let’s say you want to send your kids to day care, and like I said, that’s thetopic that we’re going to be diving in so if you have questions about that, send them on in. What are some tips maybe if are going to daycare out that you can?
SCOTT KILIAN: Yes, so going to daycare, you kind of have to think creatively. If you go okay wow, that’s a really expensive bill but I really want to send my child to daycare. Let’s start thinking creatively. Can I volunteer at the daycare? Can I get a part time, you know. Can I get a discount for participating. If I work, will my employer help participate in. Sometimes they’ve got these policies with all help for childcare expenses. Maybe there’s a childcare facility inside your work that you’re comfortable with and you can look at that, maybe there’s some fringe benefit. It really comes down to thinking as creatively as possible. Seeing how you can participate, give a benefit to the daycare, they’ll give you benefit back. You know, maybe.
JOHNER RIEHL: And so the college workers you know works. They even offer deals on their childcare on campus which is part of their program, to alumni. So, I mean there’s a price for faculty and staff, students, but alumni also has access to that so maybe that’s another
ERIN ESTEVES: Oh, that’s great.
JOHNER RIEHL: I mean if you live in the same time when you’re at school, maybe there’s a place on campus. Where there’s it’s all the more affordable because there’s some students in training, but they’re obviously supervised and they’re not the ones who handle the kids.
SCOTT KILIAN: One of the things too that I’ve found that works really well, that works very well for me is joining online groups of likeminded individuals that have actually done the things that you’d like to do. So like for me, you know I’m part of a natural family and this group, I’m also part of a positive parenting group and you know, financial things comes out from time to time and child care comes from time to time and I get little tidbits here and there. I can actually see how some of these folks have gone through and things that they wanted to do through their own diligence and research and efforts.
JOHNER RIEHL: So those are easy to find these days you go to a meetup
SCOTT KILIAN: Meetup or yahoo or something like that, so.
ANDY LOY: Also a lot of churches offer daycare as well. They’re generally a lot more discounted than the standard
SCOTT KILIAN: That’s a great point absolutely!
JOHNER RIEHL: And it’s free during service hours
ANDY LOY: Yeah. We’re Catholic, we’re luthrine, we’re [inaudible]
JOHNER RIEHL: On Monday I’m catholic, on Tuesday..
SCOTT KILIAN: Do I qualify for discount? Yes I am. But I think this goes back to the other question earlier, should we start doing this before the baby’s born, sure before the baby’s born, absolutely. You can start the research now. You can start the planning process now. You probably have a little more time before the baby’s born than you will after the baby’s born to do some of the stuff. So if you’re in that position, go for it.
JOHENR RIEHL: We talked about utilizing grandparents, but another really interesting idea is sharing care. You know, for anyone that’s priced out, nannies or even au pairs and I mean there’s benefit. My brother-in-law in New York they got an au pair but she spent Christmas with us, and she spent thanksgiving with us. But maybe there’s ways to share it with the family that all the sudden, it cuts the expense drastically down.
SCOTT KILIAN: Absolutely, and this is through these, through the online groups, too. You can always just post a question or through a community. Hey, is anybody looking for certain [31:29]. We’re going through this right now and when Alex’s done with his school we need find care for him through the summer time. So we’re trying to pool other parents to kind of do that and it’s just a discussion it’s just what you feel comfortable with.
JOHNER RIEHL: It is true. It’s good to remember that you know what you’re saying. It’s not, we’re not the first one’s that have gone through this. There are other people that have gone through it.
SCOTT KILIAN: We’re not reinventing the wheel here. If you can find a group of people that you’re comfortable with, friends of yours that are likeminded, that you’re comfortable, and that you’re confident, you also have to vet this, you know. A lot of times you’ll hear a lot garbage about there, too.
ANDY LOY: In social media, it’s so much easier now to be able to group together and get like-minded people altogether and share common goal.
SCOTT KILIAN: One of the things I want to mention I know we have tax planning, on here. And I think that what’s really important here is again going back to communication, you know. So you’ve got what you want to accomplish for the family. So you got a potentially flexible savings account, you got potentially a dependent care credit, you got a child care tax credit, that you can use on the tax return. But when you’re making a decision of should somebody stay home, you know one of the big benefits there is I could actually move you into a lower tax bracket, too because the income is not as much. So there are some things to think about here. And you can think about other things too, like both spouses are working, then you’re more likely to eat out ‘cause who’s going to prepare the meals but then you can make better decisions grocery wise, you have to buy a lot of clothes, for work, you don’t have to do that, and you’re stay at home and so the expenses can be restricted, so let’s think outside the box here when we’re talking about that. And may make a lot of sense because preschool and daycare is not required.
ANDY LOY: It is nice to spend time with your kids, too for the first few years.
SCOTT KILIAN: Let’s face it, nobody replaces mommy and daddy.
JOHNER RIEHL: Okay, well thanks so much Scott for joining us. For more information about this, be sure to check information on our website, on our episode page on ParentSavers.com, we’ll continue the conversation for members of our Parent Savers club after the show. It’s going to tell us a little bit more about some of the government programs and applying for flex spending and I’ve got a little bit of flex spending stuff I want to talk about as well. For more information about the Parent Savers club and how you can be part of it, please visit our website at www.ParentSaversClub.com
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JODY: Hi, parent savers! This is Jody with Urban Sitter. A website that connects you to friend-tested sitters. I’m here to help you figure out the right questions to ask when searching for a baby sitter. When am I going to need a sitter? When embarking on a search for a baby sitter, it’s important to ask yourself, when am I going to use this sitter? Do you need a fast responder that can be available for spur of the moment work functions? Perhaps someone primarily available in the evenings for date nights?
Or dependable sitters that can cover scheduled day-time events such as doctor’s appointments, if you need someone on short notice, then you’re going to need to find someone who lives nearby and responds quickly to requests. Also be sure to confirm the sitter’s transportation situation. You’ll need to pick them up, or do they have a reliable way to get to your home. Some sitters are only looking for occasional work on the weekends. While others maybe up for consistent part-time work, so set expectations up front.
So neither you nor the sitter is disappointed when the job is declined. The goal is to build yourself a network of sitters with a range of availabilities, so you’re never left in a bind. None of us should have to depend on one sitter, let’s face it. Most baby sitters are young adults who are still learning to be responsible. Look for a sitter who responds quickly to your emails or phone calls and it’s a good indication that they will show up to your baby sitting job on time. Okay, parent savers. It’s time to say hello to your old friends spontaneity. Visit www.urbansitter.com to find and book baby sitters, your friends know and love.
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JOHNER RIEHL: That wraps up our show for Parent Savers today. We appreciate you listening. Don’t forget to check out our sister shows Preggie Pals for expecting parents, the Boob group for moms who breastfeed their babies, and twin talks for parents of multiples. Next week we’re going to be talking about the legalities of parenting, some of the rights and responsibilities that parents have, and when they should start thinking about that. I guess we’re starting off the new year, with a lot of making sure that our financial and legal houses are in order. So thanks for listening, this is Parent Savers, empowering new parents.
[Disclaimer]
This has been a New Mommy Media production. Information and material contained in this episode are presented for educational purposes only. Statements and opinions expressed in this episode are not necessarily those of New Mommy Media and should not be considered facts. Though information in which areas are related to be accurate, it is not intended to replace or substitute for professional, Medical or advisor care and should not be used for diagnosing or treating health care problem or disease or prescribing any medications. If you have questions or concerns regarding your physical or mental health or the health of your baby, please seek assistance from a qualified health care provider.
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