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Family Number Two

The second family who has asked for advice are the Jones(not their real name). They are in their 20’s.  Mrs. Jones is pregnant with their first child. They rent an apartment in the Midwest. Their net income after all deductions is $ 28,281. divided by 12 months equals $ 2357.

Here are their expenses each month:

Rent: $ 950. 
Groceries: $ 150.
Restaurants and Take Out: 60.
Clothing: $100.
Entertainment: $75.
Household: $25.
Travel: $100.
Medical Co Pays: $100. 
Car Insurance: $95.
Gasoline and Oil: $55.
Cell Phone: $ 64.
Electric and Gas: $75.
Emergency Fund: $50.
Renter’s Insurance: $ 10.
Miscellaneous: $ 50.

Total Monthly Expenses: $ 1959.

They have been putting the extra $ 398. into a savings account in case they have extra medical expenses with Mrs. Jones high risk pregnancy. They have a good health insurance policy through Mr. Jones employer.

This is what they have saved:

Retirement Fund: $2100.
Emergency Fund: $2000.
Medical Savings:  $1592.


When they were married a year ago, they took their cash wedding gifts and opened their retirement fund and their emergency fund. Mr. Jones has started contributing to his 401K through work and it is a deduction from his paycheck.

With a baby on the way, they are starting to think about buying a home. They would like to save a deposit of 20% down so that they don’t have to pay PMI. Housing is not really expensive in the area they live in but they still need to save $20,000 – 30,000. depending on how much they spend plus closing costs.

They want to know if they should start putting some of that $398. into a house deposit account? They also want to be able to save more money than what they are saving.


I told them I thought it was great that they didn’t have Cable TV or internet. He said it is included in their rent. They also have no car payment because they have a paid for car that her parents gave them as a wedding gift.


Mrs. Jones is not working because of her high risk pregnancy. They will rethink that after the baby is born. Her parents live close and would love to babysit. 


When I first looked at their finances, I thought this couple is doing great and they are for only being married about a year.  I also think it was very smart of them to fund some of their savings with wedding gift money.


I have had many conversations with them since they first contacted me. I have told them that I would continue to earmark that $ 398. for the high risk pregnancy. Then when they baby is born, if all or most of the bills get paid, they can just earmark it for their home deposit savings. I also reminded them that they need to get some life insurance for when the baby is born. Mr. says he already has it through work. 

They had a little outstanding credit card debt;however since I first starting talking with them, they have paid that off.

Since they would like to save more money out of the paycheck, they need to cut their expenses. I do not believe that they can cut their groceries. It is pretty low. Nor can they touch the household amount because they will be needing diapers soon. However, they could consider cloth diapers which would be much cheaper in the long run. 


The expenses I think they can lower or cut are clothing, restaurants and take out, entertainment, travel,and perhaps their car insurance although it is pretty low compared to what I pay. So these are the ones they need to work on.

Okay, now it is your turn to give them your $ .02!
What do you think they should do?

Lastly, I wanted to let you know that Bruce and Noreen want to thank all of you who gave them advice.  

I will be updating you once a week on what they are doing.   


13 replies on “Family Number Two”

What I did with diapers. With the first two, it was cloth all the way. I got smart. With the third–At home I strictly used cloth. When we were going to church, grocery store, anywhere, I put on a disposable. The box of disposables actually stayed in the car with only a few kept inside for the diapering prior to leaving the house. It worked for me.

Hi Liz, this is Chris. I think your advice to them so far is spot on. I would suggest when the baby is born, that Mr and Mrs. Jones look for clothes for him/her at yard sales, consignment shops, Facebook sites, etc. You can clothe a child for a lot less this way.

I also wanted to mention that there are some banks here in the Midwest that will do a no PMI home loan on 15% down payment, so maybe look around for that. The other big advice I would give them, that I have given to my own children, is that if Mrs. Jones does end up getting a job, that they should buy a home only on one of their incomes, instead of both. My daughter is the major bread winner in their family, and she and her hubby did this. It gives them much more flexibility in their budget, and now that it is 6 years later, she has been promoted and their house payment is very low. So they have the option of investing more for retirement, and, if they have a second child, they have the option of son in law quitting work to be a stay at home dad.

Hi Chris,

Great suggestion on the baby clothes especially since baby outgrows them so fast.

I did not know that about the Midwest banks. But they will now since they are reading every comment.

Great advice on the dual incomes.

The "Tightwad Gazette" by Amy Dacyzian (sp?) has a GREAT article about putting aside clothing for children. It suggests how many articles of each type of clothing kids need. She shopped garage sales for kids clothing and then set the items aside in boxes that were labled with the appropriate size.
If the Jones family has some storage space, this is a wonderful way to obtain clothing for the baby. For example, you don't always find a size 3 snowsuit when you need it, but you might find it a year in advance in the middle of the Summer.
Hopefully, their library has a copy of the "Tightwad Gazette", if not there is a Face Book group of Tightwad Gazette fans that one can join by request.

Baby clothing should be found ahead of time, at least some of it. Yard sales in affluent areas are the best clothing. Same with baby furniture. Decorating the room the way they like can be done cheaply by painting frames for pictures. I would not suggest painting anything a baby can eventually chew.

Another thing about baby clothes. This was my third child, so maybe that was why I did not need a brand new outfit for bringing her home. Back then, 1975, I did not know the sex. However, I found at a yard sale in a "nice" part of town the mother lode of expensive baby clothes sold cheaply. I bought a one-piece snap up the front outfit–pink lace over cotton, bows on toes, lace trim all over, and on toes. One tiny yellow stain was on the toe and the outfit had never been washed. One bow was untied. I washed it in the sink, treating the tiny stain. It was so perfect after that. And she wore it home from the hospital. I priced the outfit in a kiddie boutique here in town. It was $25 and I paid a quarter! Remember, this was $25 in 1975 money. That is $118 in todays money!

They are doing great and seem very wise for young marrieds their age.
My only opinion is their income is not very high. Maybe as time goes by, they can increase that.

This is Wendy. – Remember that you don't need all that baby "stuff".

Chris-thank you for allowing us to contribute. It makes me remember of the things that I did to get out of tremendous debt during the down turn. It helps put things in perspective and remind me that I can tighten up too.

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