Help a Reader: Triplets

Here's an email I recently received from a reader:

We just found out we may have triplets (and are sorta freaking out financially).

I will start with, I make an OK wage in Ohio (low cost city). I have very little debt (no CC debt, no car payments) in the form of a mortgage, we have only been in the house since 2008.  The house is 2100 SQFT with 3 bedrooms. My wife takes care of our 2 year old son, and does not work. We both drive 4 door sedans. With one child we are very comfortable and able to meet most of our financial targets, max out 401K, contribute to 529 plan, solid savings plan and do not have to live like paupers to do so.
 
Two major factors we are weighing considering we just received this news:
 
1. House is too small for four kids, only having 3 bedrooms. Proposed solution – plan to move in next 3 years.

• Does anyone have suggestions what to expect, considering we have been in the house such a short time?
• The next house may have to be considerably larger to accommodate this type of expansion.

2. Cars can’t accommodate enough car seats. Proposed solution – plan to buy new mini van – Most of the used mini vans we have seen don’t have the safety features we need (latch on all seats).  Also, it seems that the value of used mini vans (of the type we want/need) do not lose a lot of value so the cost difference new vs. used is minimal.

• Options for buying new mini van – Trade in both cars to get close to paying off the van – get a new smaller car for me. This may also give us more leverage with the dealer to deal with us considering we are going to buy two cars. This option has the highest monthly out of pocket expense. 
• Trade in older car that has less value, keep newer car which will lead to a larger loan for the mini van.  Middle monthly out of pocket expense. 
• Trade in newer car that has more value, keep older car. This reduces the loan for the mini van.  Lowest monthly out of pocket expense.

3. We have decided, for now, to reduce our 401K participation down to the minimum to receive company match (Company match is not guaranteed) to help with expenses and with new mini van purchase, as well as potential house moving expenses.  This would only be until we have identified the cost, and how much we may be able to put into an IRA each year or increase our 401K back to maximum.   Opinions?

What's your advice for him?

Comments

[Luis]

In a few years your triplets will still be too young to separate them by bedrooms. Multiples no less like to "stick together", as such you may not need to be concerned about moving for another 10 years.

What is the difference between $1000 and $2000 to you? To me, it is a lot! If you cam see it from a compounding perspective then you may see better the value of buying a used vehicle. As far as latch goes I don't know if that is an excuse , but it rings like one as a rationale for overstepping one's personal finance duties.

[I Am 1 Percent]

Its difficult to provide good suggestions without more information, but assuming you have good credit, my recommendation would be to wait on the house until you can put 20% down. You won't need the extra bedroom until the triplets are at least 4-5 years old. Granted, interest rates may rise by then, but stay put if you can.

Regarding cars, I'm in the same boat and am looking for a 3-row SUV with a LATCH system in the 3rd row. But, go used..even if its 1-3 years old. Let someone else pay for the first year's depreciation (which is always the largest).

Before reducing your 401k participating, have another look at your car insurance, home insurance, property taxes, and other large expenditures to see if there are ways to save there before you sacrifice your retirement.

I'm not a financial advisor, but a self-made millionaire by age 34.

[Robert]

Yea, seriously consider not moving. Kids can sleep in the same room for a long, long time - especially multiples. Build (if you're so inclined) or buy some bunk beds - much cheaper than buying a new house :) We have 3 bedrooms and 2 young kids. They sleep in the same room and sleep much better throughout the night because of it.

[Matt]

Definitely consider staying in your current place.

Bunk beds are very easy and cheap to build. Don't get suckered into buying expensive, poorly-made stuff from a store. Plans can be found anywhere like here: http://woodgears.ca/bed/bunk_bed/plans.html

[KH]

I have twins who are now teenagers. It really is true that multiples like to be together! We had the extra bedroom, but they preferred being together. Since they are boy&girl we finally put them in separate rooms when they were 6 years old but it wasn't what they would have preferred.

Also, when I was growing up it was common for same sex siblings to share a room until they left home for college. There were 4 kids in our family & I shared a room with my sister (yes, bunk beds) until we were in high school.

Another thing to keep in mind--a bedroom is just a room where you sleep and many kids don't spend much time there. They don't need a suite. My nieces (teenagers) share a bedroom even though they live in a large house--they spend most of their time in the family room where their desks & computers & the TV & game system are, and they also hang out in the large kitchen adjacent to the deck and back yard and where all the food & family are. No one wanted to move into the extra bedroom located in the basement.

So I agree with the others--you certainly don't "have" to buy another house right now just to put the babies in separate bedrooms. You can certainly wait at least 5 years, and when you do buy something larger, you may not need a separate bedroom for each child.

[Cindy]

I agree with the people saying don't move! We have 4 kids, another on the way, a 3 bedroom house and we're not looking to upgrade for at least a few more years. We'll have to as they get bigger, but they'll still be sharing rooms so we can have one bedroom for a school room. It won't hurt them at all. I always shared a room with my sister, and even when we had enough bedrooms to spread out, we wanted to be in the same room. Bigger kids can do bunk beds, or you can fit two twin beds in most rooms, and you can fit three cribs in a room, easily! Bide your time on the house decision and just take care of the car situation first. If you have too much stuff to fit, consider minimizing that so you can feel less squeezed.

[soners]

short term I would considering dropping the 529 contributions as well just to free up some cash until you have the cars paid off. What does everyone else think on that?

[Mike Hunt]

Also agree not to move, you can sell a sedan and buy a second hand minivan.

Take the time to ensure the kids are healthy and developing well and they can share the space growing up for a while. I don't think you need to rush as of yet for a new house.

Congratulations.

-Mike

[Scott]

Looks like great advice above. We had an 9 and 7 year old and were told we were having Quadruplets. We had to shift things around,(money, rooms, time schedules) and had friends and neighbors coming over 24/7 for awhile to help. Hang in there, it's totally doable. The Quads are 9 1/2 now and we are surviving. Hang in there, you're going to have some hard times (paying for diapers and formula, long nights etc.) and a lot of incredibly good times. You know all the cute things little babies do? You get that. Times 3!
Congratulations!
Scott

[Apex]

As others have said I would not move. 2100 square feet with 3 bedrooms should be fine for quite a while. I do agree with dropping the 401k to the match to have the extra cash you need.

2006 Honda Odyssey has 3 rear seat lower anchor tether latches. It's not until 2011 that they provide them with 5. I personally think that not having the lower anchor tether for one seat, presumably your 2 year old in the front facing seat until you can switch to a booster is perfectly fine. If you think about it, once he is in a booster which usually happens at about 4 years old, he is going to have far more movement in a crash than a front facing child seat and there is not going to be any tethering there at all either. That's just my opinion. I guess you will have to decide what you are comfortable with. Honda Odyssey's have the highest safety rating of any minivan. We have a 2002 version and get large breaks on the insurance due to safety features.

Buy a 4-5 year old Odyssey with close to 100K miles and you will have a great car at a good price. That's what we did in 2006 when we had our second child and it now has 200K miles and still runs great. Planning on putting another 100K miles on it.

I know the triplets thing is a bit of a shock but don't over-react. You are close to having everything you need already. Your house is fine. You just need a high quality mini-van and I am confident you can get something that has excellent safety features that is more than a year or two old. I don't think you need to make the drastic changes you are worried about.

[Anne]

As the mother of 4, I can tell you it's easier with a smaller house to keep an eye on everything going on. Also, unfortunately, at least one of the triplets is likely to have some kind of medical issue or at least spend some weeks in the NICU, so your budget may be strained to the max just with medical bills. Not to mention that most triplets are born by c-section ...

Agree on the van, though. No way to handle 4 kids under the age of three and the inevitable gear with a car, even if it did accommodate four car seats.

Wow, huge life changes ahead; my thoughts are certainly with you. Hope you have good family support or great friends!

[Sarah]

I'm going to second what everyone else has said that moving isn't necessary! I come from a family of 6 kids & a 4-bedroom house, and we all had to share bedrooms. I've heard colleges say that that is one of the biggest differences in how kids act these days - because so few kids have learned how to share tight living spaces before they go off to live in a dorm. Also, there are carseats such as Diono RadianR100 Concertible Car Seat that fit 3 across, and go from infant (rear facing) to 100lb booster. Being able to fit 3-across might open up your car choices a bit.

I would also put the word out for one-time costs like cribs and see if people are willing to give you them. (I'm sure initially you were planning on just reusing baby stuff from your older son, but buying 2 more of each item isn't cheap)

Also, I've seen some creative stuff online for multiples (this home-made twin-table comes to mind: http://www.ikeahackers.net/2010/12/ultimate-twin-highchair.html) that if you are handy at all might be doable!

Good Luck! I'm sure it's a lot to process!

[Rick Francis]

I agree you don't need to move- initially you can use 1 br for the nursery and one for the 2 year old- as they will have different sleeping schedules. Re-evaluate moving after a couple of years after you have settled into having four kids!
At 2100 sq ft I wouldn't be surprised if you had a "game room" that could be converted into a bedroom for a few thousand. I'm sure you would lose far more than that on the commission for your home.
I agree with soners- cut down on the 529 plan before your retirement savings. The kids can get scholarships or loans for college or may not even want to go to college. You can't get a loan for retirement.
Check out refinancing your mortgage to help cash flow without sacrificing your retirement. Yahoo finance lists the 30 year fixed rate at 3.89%, that is insanely low. Shop your other fixed expenses too like insurance. You may want to cut back or cancel any optional services like cable TV- you aren’t going to have much time for TV anymore, besides with triplets it will be like you have your OWN reality show.
Sarah had a great point to let others know you will need a lot of baby things- if you are a member of any groups let them know too- There may be a lot of acquaintances that have a lot of outgrown baby things in great shape that they would be happy to give you. I would get the car seats new- they may not be safe if they have been in an accident or if they are old enough that the plastic has degraded. However, the kids won’t know or care if anything else is new.

-Rick Francis

[Dana]

We are raising 9 in a 2000 sq ft 3 bedroom home. There are a lot of challenges but the room situation is the least. The ages are from 21-4. The older kids grouse about privacy issues like using the phone sometimes but when they go for a walk or to a coffee shop for "some peace a quiet, Mom" they still grab a sibling or two. My oldest is starting a business and saving everything for that, but my 20 is planning a move in a few months. I think it funny that he is planning on staying within walking distance.

[jim]

It seems unlikely for someone making an "OK" wage that adding triplets, increasing your mortgage and buying two new cars is really within your means right now.

I think its hard to give advice here without knowing the exact financial situation. Maybe you've got plenty of spare money to spend or maybe not.

Personally I would recommend you figure out your budget based on adding 3 kids first. Then figure out how much spare money you've still got at that point. I wouldn't be hastily upgrading your home and buying cars without figuring what your budget allows.

Answering your questions :

1. You bought the house in 2008 and plan to sell now. You've most likely lost substantial value in that home since you bought it. Expect it to be worth 20-40% less than what you paid. That would mean you're underwater and if you want to sell it you have to pay the bank money to get out of it. Unless you brought a huge downpayment to the table when you bought your you lucked out and your house is not down much then you're likely in this case of being underwater.

2. I dont' really buy the idea that used aren't much cheaper than new. Honda Odyssey is around $35k new and a 2009 certified model runs $26k. Second, I would not trade in your cars to the dealer. You'll get more money if you sell them yourself privately. It could easily be $1000 to $2000 more depending on the car.

3. Cutting your retirement is not a good first option. Figure your expenses and spend accordingly without short changing retirement.

[Catherine]

No need to move. My folks had 10 kids in 1800 sq foot home. They did split one of the bedrooms into two to make an extra room.

Skip the 529 contributions. An IRA for your stay at home wife is more important.

Let people give you things.

Good luck.

[Christina @ Northern Cheapskate]

I had a two year old when I gave birth to my twins.

Here's what I know: You don't need a bigger house. All three of my boys still share a room and they love being together. (They're 6, 4, and 4).

I also know... you DO NOT want the stress of moving while adapting to life with multiples. Life is chaotic enough already without having to keep the house spotless for a realtor to show it or to look at new houses, pack up all your stuff, and learn a new neighborhood.

As for the car situation a minivan is a must. A brand new minivan is a luxury. You shouldn't take out any more car loan than absolutely necessary... You have know idea what kind of impact 3 (maybe 4 if the 2-year old isn't potty-trained yet) kids in diapers is going to do to your monthly budget. Plus... you never know if there will be health issues (two of my 3 boys have needed extra speech and occupational therapy services as preschoolers).

That said, I recommend having the minivan and a vehicle that could fit everybody in a pinch. We've had a couple of accidents that have left us without the minivan for awhile... and we were grateful that we had another vehicle we could cram into. You could also choose to add coverage to your auto policy that would cover rental if something where to happen to your van.

Save as much money as you can now, and make sure you welcome any and all help - especially during those early days. We wouldn't have survived without the support of our friends and family.

Multiples are a true blessing! Wishing you all the best!

[Mike]

Also consider SUVs or other vehicles with the 3rd row seating. You will probably have a better used market to choose from and lower prices in the new market.

Get portable cribs instead of full sized ones. They're about 2/3rds the size, but plenty big for babies up to at least 2 years old. My 22 month old still fits fine.

[Wise Finish]

Here's some extremely frugal advice:

In some states, if all of your back seats are filled with car seats, you can put a car seat & child in the front seat. Assuming you have 6 seat sedans, you have no need for new vehicles.

Also, if you don't want to go quite as frugal as this, forget LATCH - it's a luxury you don't need. All of my top rated car seats install with belts and perform nearly as well (or better) depending on the configuration they are in.

And I echo the comments of everyone else who said - you don't need the house.

Also, breastfeeding is important - it will save a lot of money on formula and doctors bills. Despite what "the establishment" might tell you, your wife can produce plenty of milk to sustain all 3.

[RobF]

We raised 4 kids in a 3 bedroom house of about the same square-footage. 2100 square feet is a pretty generous size. We did not need more space, we needed less STUFF! I would say that was our biggest mistake. Having a smaller house allows you to do more outside the house. It also allows you to get helpers and have more flexibility financially. When we moved the kids were in high and middle school. It was almost impossible to find a five-bedroom house, not to mention too incredibly expensive.

While I agree about the savings and importance of breast-feeding, you should consider your wife needs to sleep. If you can do both, it's great. If not, don't beat yourself up

I would not recommend a car seat in the front seat. Get a used mini van or a used SUV. Consider your total operating cost. And.. I am a fan of Onstar!

[JS]

Thank you all for your comments on this topic. We have calmed down a bit, and cooler heads have prevailed. We are not moving, or planning to move any time in the near future.

We are investigating used vans.

We greatly appreciate everyone taking time to respond.

[K. Derby]

We were in your same situation last year. We now have a 2.5 year old and 6 month old triplets. We live in a 2-story (REALLY wish it was 1-story) 3BR house, 1800 sq ft. We too would like to move to something bigger, but intend to keep the kids rooming together even after we move in several years. We bought my Mom's 2002 Odyssey, and she bought a new one. Turns out we're lucky we don't have the new one because the back of the bench seat is lower in the older models, and now that we're switching to rear-facing convertible seats, 3 in a row, the babies are loaded in through the tailgate. There would be no room to do that in my Mom's new van. The 3-in-a-row rear facers are important as if the rear facers were in the pilot seats in the middle, the front seats would have to be moved so far forward there would be little knee room for driver or passenger. We also have one of the pilot seats removed most of the time... Easier to load the infant seats in the back that way and makes a nice flat place for changing diapers if we gave to while out. (We've had to do that a few times.)

Other things we've found indispensable (though pricey) are our ABC Adventure Quad stroller, which disassembles fairly easily (easier with practice), folds, and fits in the back of the van; and the Diono Radian convertible seats that we just bought, which are the only ones we found that will fit 3 across along the bench seat. They go to 120 lbs, so they should hold you for a while.

Good luck!

[K. Derby]

Just wanted to respond with my own opinion to a couple of the other comments above. Cable TV may be a luxury, but you'll be so happy to have it (if you do), especially during the first 5-6 months when you feel like you and your wife are both spending every spare moment feeding a baby. You certainly will have time to watch TV, and it may keep you sane, and awake when you need to be.

Your wife may or may not be able to breastfeed your triplets. I tried my darnedest to breastfeed. I made much more milk than my singleton needed and nursed him to 16 months. But I just couldn't nurse the triplets, as hard as I tried. Doing so would have meant feeding them constantly (even tandem-nursing 2 of them) because newborns simply take a long time to eat. I would not have been able to sleep at all, nor would i have had any help feeding them. Plus they were too small to really latch well and stay latched. Nobody ever was satisfied after I nursed them, so we ended up having to supplement. After about 1 month, I gave up on nursing and went to pumping. Now we exclusively formula feed. Which brings me to my next point... Don't under-estimate the cost of formula! We currently go through about 100-120 ounces per day. That's roughly one $24 box of formula per day. SIgn up for the Enfamil and Similac multiples programs... That will help a little.

Finally, find some help. Until the babies are sleeping through the night, you and your wife will be more tired than you've ever been. I was lucky, during the first few months, to have volunteers from our church that came to help me out daily. They watched, fed, played with, and cuddled the babies during the day, and my older child is in preschool in the mornings/naps in the afternoons. This allowed me to take naps during the day so I could survive the brutal feeding schedule in the middle of the night. Help during the first few months was critical for us.

Again, good luck! And congratulations on your blessing.