How a Social Worker in Kentucky Does Money

Crystal is a 31-year-old social worker in Kentucky.

ND: So, Crystal, tell us a little bit about your finances.

Crystal: I earn $43,000, and my husband works part-time after the university he was working at closed, earning about $8,000. We own a home with a mortgage payment, have two car payments, two kids in day care, and some student loan debt.

Do you feel like you’re earning “enough” money? Whatever “enough” means to you?

Not really. For me that would mean being able to cover all our expenses and save a considerable amount. At this time we have a very small savings for each of our sons and for ourselves (not including retirement funds) and often end up living paycheck to paycheck. I’d love to be able to save more for my kids’ college funds.

What percentage of your income would you say goes towards necessities?

Okay, I’m considering housing, household bills (water, electric), transportation, groceries, and day care to be necessities, and that would be 85 percent.

The day care expense is by far our greatest at present. It’s more than our mortgage payment (which includes taxes and insurance via escrow).

Will the day care cost go down when your kids reach school age?

There will still be some expense for afterschool care, but it will be about half of what we pay now.

So when I think about my own financial life, where I’m definitely making “enough” but also living paycheck to paycheck, I think “well, someday I’ll probably make more money and it’ll be better.” Do you think that kind of thing?

YES! I am dreaming of the day when my husband returns to full-time employment and the breathing room it’ll allow in our finances. (Maybe even a vacation!)

How do you manage money on the day-to-day? Do you pack lunches? Do you plan out every expense or roll with it? What about things like your kids’ friends birthday parties, or the day everyone is outside and wants ice cream?

I do pack a lunch most days, but I’m lucky enough to work just a few minutes away from my home so I can go home for lunch if I choose. I don’t budget every dollar and try to leave some wiggle room for “fun” stuff like a movie rental or treats. Our kids are only 3 and 1, so it’s infrequent for them to ask for a lot without the suggestion first.

Do you have any indulgences that you squeeze into the budget (because indulgences make life wonderful)?

Netflix and Audible! I travel a lot for work, so Audible really helps with the long drives.

YES! Netflix and Audible are both THE BEST. So what are your financial goals for, say, the next five years?

I’d like to have the Dave Ramsey six-month cushion just in case should we ever experience another job loss, and really be saving for college funds. Maybe translating day care payments into college fund payments.

Oh, that sounds smart. I feel like someone should do the math on that and put it into a financial book. “The Kindergarten College Fund” or something.

Sounds like a plan! I know there will still be expenses with them in school, but even saving half of what daycare costs each month from age 5–18 will stack up. For me that would add up to more than $35,000 by the time they graduate from high school!

What have you learned about finances in your adult life? What surprised you?

Credit cards are not free money, live within your means, but make a little room to enjoy what you’re working so hard for. I think I was most surprised to learn about credit scores and how much they can affect you. There really should be a required class in every high school about managing finances.

Ester and I were just talking about that! There really should be. The trouble is that financial management changes. Were credit scores a thing when we were in high school? I feel like that didn’t happen until the mid-2000s.

I can only say I didn’t know anything about it until around 2005? 2006? When I bought my first car without my parents being there to help. I wish I’d known more!

Wikipedia says FICO was able to calculate the first credit scores in 1989, but it looks like credit scores didn’t really take off until the early 2000s — probably alongside the growth of the Internet, when it got really easy to collect and share that data. So yeah, credit scores wouldn’t have made it into our high school textbooks.

That makes sense. I take the Internet for granted, I forget it really hasn’t been common for that long.

How do you plan to teach your kids about money? Has your three-year-old already started asking about money?

I’m somewhat at a loss at how to get started. There’s so much information! I definitely plan to teach them about credit scores. My three-year-old understands you have to pay for things, and he likes to put money in his piggy bank (woohoo!). I do have an app for him that teaches him how to count money. Eventually we’ll probably do an allowance or task system where he earns money for work.

I wonder if anyone has come up with a Credit Score Allowance System for kids. Like, you give your kids credit, and if they pay you back with their allowance, they get more credit in the future. There must be a financial book with that idea in it somewhere.

I could see doing that once he reaches middle school. I don’t think he can think that abstractly yet.

Do you have advice for other Billfold readers who are parenting on a “just enough” income?

Coupons, celebrate when your kids no longer use formula, buy clothes at the end of each season for the next year or buy used (they’re gonna grow too fast anyway) and try not to stress too much. Kids don’t notice what they don’t have.

Photo credit: Philip Brewer

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