Should We Cut Out Kids’ Sports if We’re Always Broke?

Dear Penny,

We are a two-parent household with three children under 10. We make about $7,500 a month combined but still struggle and end up living paycheck to paycheck.

We have no savings. We do not have credit cards, and our student loans are paid off. Our cars are paid off but often need repairs. We will need a new one soon. We bought a house last year.

We have child care ($600 a month), a mortgage ($2,750), then utilities and insurance ($500). Groceries are about $1,000. Gas is about $200. Then there are the extracurriculars, like swim lessons. We have lots of medical bills Since we have a child with mental health disorders.

What are we doing wrong? Do we need a credit card? Did we buy a house above our means? Do we have to stop enrolling the kids in sports?


Dear Confused,

Two things can be true at once. You can be doing everything right yet still be struggling.

You don’t have much fat to trim from the expenses you listed. You don’t have non-mortgage debt. The fact that you’re able to keep your grocery bill at $1,000 for a family of five suggests that you’re pretty frugal.

In a perfect world your housing payment would be a bit less. The traditional guideline is that you shouldn’t spend more than 28% of your income on housing. But I think that’s more a reflection of soaring housing costs rather than buying too much house on your part. But even if you downsized, you’d need a new mortgage at a higher interest rate. That would probably wipe away any potential savings.

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