November Update

Baby LRC loves going out for a walk in his stroller.

Baby LRC loves going out for a walk in his stroller.


The last month and a half after my wife returned to work, I took Thursdays and Fridays off to care for Baby LRC. My parents watched him from Monday to Wednesday. Initially, I thought that I’d change a few diapers, feed him and play with him. I figured I would have time to work on the blog and surf the web while he took his nap. You can tell that this is my first child because obviously I don’t know how much work and attention is required to care for a little one. Props to all you stay at home parents. Actually, props to all parents! There were some tantrums Baby LRC threw when Mrs. LRC first went back to work and he refused to take the bottle, but all in all, I wouldn’t trade that father and son bonding time for anything. Now that I’m back to work full time, I miss spending quality time with him. It’s not the same when you come home after work and his bedtime is soon afterwards. Plus, he is much more playful during the day and gets a bit fussy at night.

I finally updated my About page, as it says that we were planning on being a one-income family. It seems that one of the most popular posts on my blog is the one entitled Living On One Income. Now that my wife decided to return to work, it is not something that I will have much knowledge about. However, it is possible that we may revisit that decision sometime in the future, especially if we have another child. I guess we will cross that bridge when it comes.

Childcare

As with childcare, we are lucky that my mother and my wife’s mother will be able to help out. As I mentioned in an earlier post , I was doing some research about the tax implications of paying grandparents for childcare. Well, the IRS and its rules are always complex, but it seems that paying grandma to watch your child isn’t too complicated (tax wise). From what I got out of the article, if you hire your parent to care for your child, you don’t have to file any paperwork with IRS to report your parent’s earnings and do not have to pay payroll taxes (some exceptions apply). Your parent will have to report the income in their tax return. If you are interested in learning more, check out the article here or go to the Tax Mama forum here. I put the maximum $5000 in my dependent care flex spending account which will save me a good amount in taxes. Of course, I’ll have to look into this more when the time comes. I’d suggest that you do your own research and ask a professional tax expert if you are also thinking about using this arrangement.

Thank you to Demaish from Borrowed Cents, Shannon from The Heavy Purse, Ramona from Dojo Blog, Hayley from Disease Debt and Brent from VOSA for sharing my posts this past month.

And thank you to the Carnival of Retirement for including my post.

32 thoughts on “November Update

  1. E.M.

    He is too cute! That’s great you have help from the grandparents. If I do have kids, I am hoping very much that my mom won’t mind helping out. Babies really are tons of work, as I am hearing from my cousins. It’s their first time around the block, too.
    E.M. recently posted…What To Think About When RelocatingMy Profile

    1. livingrichcheaply@gmail.com Post author

      Thanks E.M.! It is always good to have grandparents helping out. I’m sure your mom won’t mind! Grandmothers live seeing your grandkids.

    1. livingrichcheaply@gmail.com Post author

      Thanks Hayley! It is a hard job but I wouldn’t trade it for anything. Have a great weekend.

    1. livingrichcheaply@gmail.com Post author

      I called my flex spending plan specifically with that question and they said it would qualify. A nanny would qualify and I don’t think they necessarily have to be licensed. When I called they said, I just have to enter the child and nanny’s social security number.

    1. livingrichcheaply@gmail.com Post author

      Yes, it’s great to have family nearby for childcare, plus it’s nice for the little ones to spend time with their grandparents.

  2. charles@gettingarichlife

    Hey Andrew,
    Benefits of family to help with children. We don’t have any but when we do I’m going to rely on family.
    I answered your real estate response but it didn’t go through. Owners believe their house is worth X value, paying your closing costs makes them feel as though they go their full price. Ex: House for $340,000 you get $15,000 closing costs although your net is $325 on paper it shows it sold for $340.
    If you have any other questions you can email me.
    charles@gettingarichlife recently posted…Kailua Town Tourists And Sharing The Aloha Links #4My Profile

    1. livingrichcheaply@gmail.com Post author

      Hey Charles…thanks for your explanation. You will be my go-to guy for real estate advice.

  3. C. the Romanian

    Baby LRC is really adorable!

    And I totally feel you with how difficult it is to take care of a little one. I thought that they do nothing but eat and sleep… but, boy, I was wrong! :)) But indeed all the sleepless hours vanquish when you see the little fellow smile and put some funny faces!
    C. the Romanian recently posted…Retire in Romania – Pros and ConsMy Profile

    1. livingrichcheaply@gmail.com Post author

      Thanks C! Yep as both of us are first time dads I guess we just didn’t know how much time and work they take. But yes, the little smile and funny faces they make really are pretty awesome.

  4. Jen @ Frugal Rules

    Spoken like a real father so attached to his child. Your words about the time with your baby can melt hearts and as a parent who tirelessly enjoy having babies around, I feel for you. But they do keep us going so here’s wishing you all the best.
    Jen @ Frugal Rules recently posted…How To Travel For FreeMy Profile

  5. Tara @ Streets Ahead Living

    Grandparents helping with childcare are the way to go! My mom will be living with us at no cost to herself as payment to her to help raise our kids when they do come. We hope to eventually get a two family place so she’ll have her own space too. But we’ll probably end up leaving the city when we do. I wouldn’t leave the city if I had two sets of grandparents in town though.
    Tara @ Streets Ahead Living recently posted…Some ways to make extra cash for the holiday shoppingMy Profile

    1. livingrichcheaply@gmail.com Post author

      Sounds like a good idea. It’s great to have grandparents helping out…plus they love being able to see their grandkids. Yea I can understand that living in the city, raising a child can be tough. We’re still in a one-bedroom and my mother-in-law stays over sometimes to watch the baby. It gets a little crowded and we’re hoping to get a 2-bedroom…but even that will get crowded at point if we expand. And anything more than a 2 bedroom will be too expensive in these area.

  6. DC @ Young Adult Money

    Cute kid! My wife nannies and while she does get some downtime during the naps, it really is a lot of work taking care of a kid. I’m not even planning (key word: planning) on having a kid for about 5-8 years, but my Mom is already pushing for it and can’t wait to be a grandma. I assume that also means she won’t mind taking care of the baby from time-to-time? I would consider reimbursing my parents if they put a lot of time and effort into taking care of our kids. Always interesting to look into tax implications.
    DC @ Young Adult Money recently posted…Should You Switch Jobs Every Two Years?My Profile

    1. livingrichcheaply@gmail.com Post author

      Thanks DC! Yes, my mom and my wife’s mom were already asking about grandchildren when we first got married. At least you know your wife is a pro with kids. My wife was a preschool teacher so she’s great with little ones.

    1. livingrichcheaply@gmail.com Post author

      Thanks! Yea, it just seems fair to pay them because it is a lot of work. They probably would do it for free, and I think it would be different if they were financially well off. But both sets of grandparents are extremely frugal as their retirement income is not that great. Plus, my mother-in-law was actually still working, but she wanted to leave as it was getting physically exhausting. So paying them works for us. And we know that Baby LRC is getting taken care of by very loving people.

  7. anna

    Awww, Baby LRC is so adorable!! Thanks for the great information on hiring your parents as caregivers – we’re still awhile away, but it’s good knowledge to know that it might be possible and what the tax implications could be.
    anna recently posted…Re-focusing and finding that lineMy Profile

    1. livingrichcheaply@gmail.com Post author

      Thanks Anna! Yes, it’s good to have a tax benefit for paying grandma to watch Baby LRC since we were planning on paying them anyway.

    1. livingrichcheaply@gmail.com Post author

      Well I’m not sure there always has to be tax implications. Some might just give their parents cash and consider it a gift. You’d probably have to ask someone with more tax expertise than I have, but in my situation, I think the tax benefit was pretty significant. And yes it is hard leaving him in the mornings!

    1. livingrichcheaply@gmail.com Post author

      Yes, it’s a great benefit to have and people really need to take advantage of all their tax advantaged plans.

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