(MONEY Magazine) -- Donald Yap, 33, and Andrea Beck, 34, make pretty good money: a combined $183,000 from her job as a researcher at the University of Colorado, his job at consulting firm Booz Allen Hamilton, plus his service as a major in the Air Force Reserve.
Their high salaries have allowed them to amass significant savings ($233,000 in retirement plans alone) and real estate (three properties, including the house in which they live in Highlands Ranch, Colo.).
But things are about to change. The couple is getting married in July and would like to start a family right away. "It would be wonderful to be a stay-at-home mom," says Beck.
They're concerned, though, that the loss of her pay -- which would bring their income down by about a third -- and the addition of a baby will slow their savings progress. "We'd love to retire at 55, but will children change that?" asks Yap.
Best deals on renovating
Adding to their worries: the fact that they're losing a total $645 a month on the rentals of his old house and her old condo.

THREE FIXES
Prepare to be parents. Yap and Beck should budget $12,000 a year for raising a child, says Denver financial planner Karlton Childress.

Their current expenses are $5,120 a month, including the rental loss. Even adding in the cost of a baby, Childress figures they should be able to get by on Yap's salary with room to save.
Before Beck quits, though, they should build their cash cushion to $90,000 -- more than a year's expenses -- in case he loses his job or they lose a renter.
Hold on to the homes, for now. Since they have steady renters and income to cover the loss on the mortgages, Childress advises Yap and Beck to keep the condo and house until they can sell both for more than they paid. (The condo is now $50,000 underwater.)
Local Re/Max agent Rick C. predicts that within five to 10 years, the area should see 7% to 10% appreciation. If raising kids dampens the desire to be landlords, however, Yap and Beck could sell the house and use the equity from it to pay off the condo.

Rejigger retirement. While still working, Andrea should hike her retirement savings rate to 10%.
Once she quits, Don, whose firm matches 10% of pay, should squeeze to stash the max ($17,000) in his 401(k). These steps -- along with his military pension and proceeds from the property sales -- could allow them to retire by 62. Figuring they'll pay college tuition for two kids, 65 is more realistic.

Where they stand

TOTAL ASSETS: $1.2 million
Real estate - $800,000
Retirement funds - $238,000
Stocks/funds - $105,000
Cash accounts - $78,000

TOTAL LIABILITIES: $607,000
College loans - $7,000
Home loans - $600,000

I agree with you 100%  re:paying for your kids'  college(s)

I went to college (on my dime)  and approached the whole thing completely differently than my peers.

I minimized  my  debt by  working 35-45 hours/week (because the debt would be *mine*) and paid it off in >8 years.

Regarding 5100 bucks for 2 DINKs, that's not as crazy as you make it sound if you calculate that they have something like 800K in real estate (their home and 2 rentals). That's an easy 3500+  maybe >4000 *right there* (andthe renters they have don't offset the whole   mortgage(s)--  it says they're running negative 1000/mo on the rentals (combined).

So, it sounds more like they're 'living on'  1200-1500/mo *net* for food (which  could  include eating out a lot as a childless couple)  say 400-600/mo with eating out,  2 car payments (I suspect they don't drive used cars from the sound of this)  (350-400/mo x  2=800), gym/yoga memberships (150-200), gas, entertainment (probably substantial) say 200/mo,  utilities, plus 2 cellphones with dataplans (150-200 bucks). That's anywhere from 1500-1700/mo.

Then add to that their *net* (after rental income) mortgage outlay of  3500-4K/mo on *3* mortgagaes(!) and you're at 5500/mo easy, using really  round numbers.

People like this will spend 12K/child,  not from inflatable lawn decorations, but *daycare*, which out here can easily be 600-1200/mo *per child* (I don't know about  Colorado).   They  talk about this couple's ability to have the wife be a SAHM mom, but I doubt it'll happen.  My wife makes crafts  (cards,  scrapbook stuff, make people's invitations for events) and brings in maybe 400/mo and it's a huge help, but it's after the kids are in bed at night. She's already pretty tiredby then (as am  I) so I don't think she  could do this if she didn't enjoy it. Point being, most people won't do this/don't have the energy, and mostwomen won't stay home like my wife has done (and yes, we  could make much more money), so they use daycare.

Without daycare, I don't see how on earth anyone can run up 12K/year unless theyre including some sort of college fund and daycare. My  kids eat  a bit, we hand down clothes and  accept what family members/neighbors give us from their kids,  and our biggest expense for the kids is probably swim time (a luxury) for my oldest because we don't own  a pool we pay for time. That and homeschool materials (which aren't as expensive as they could be, although some materials we really would like to try are insanely priced)  are the  big tickets, and both of these 2 items are *voluntary*/luxuries and  we recognize.

I can see where they spend 5K/mo with all their real estate investments, but not how  they'll  spend 12K/year per kid.

Tele, I don't know if you're the one who down-thumbed me, but I said:

Show me a stereotypical college slacker, and I'll show you a kid with 1 sibling whose parents paid for his college.

Not

"Show me a kid whose parents paid for his college, and I'll show you a stereotypical college slacker who only has 1 sibling."

Many truths aren't true in reverse. It's basic Logic.

All Matthew's immediate family members are part Irish. (true!)
All part-Irish people are Matthew's immediate family members. (not true!)

Quote from: Matthew

Not

"Show me a kid whose parents paid for his college, and I'll show you a stereotypical college slacker who only has 1 sibling."

Many truths aren't true in reverse. It's basic Logic.

Yes Matthew, but you also said:

"And parents should NOT pay for their children's college. They simply won't appreciate it. Two words: frat party."

So did say it in so many words, that paying for education causes a lack of appreciation and encourages partying.  I'm not saying you're totally wrong Matthew, but I disagree with the assertion parents should believe they are completely free from any obligation to pay for their children's college education. (which is why I down rated the post) Particularly if they are treating their child as a minor during the ages 18-21.

First of all, I should clarify.

I was a bit extreme in saying "They simply won't appreciate it." I should say, "in most cases."

But there's no way parents are under any obligation to shell out $10,000 -- per head -- per year for a college education.

And I'd say that extends EVEN to those 18-21, if the parents are so over-protective they treat their 19 year old like a minor.

Yes, the over-protectiveness of some parents messes with the lives and plans of single guys the world over, but it doesn't change their obligation as regards education.

Parents are obliged to educate in general -- basic skills, how to work, spiritual formation, how to think, and perhaps some career guidance -- but career choice and career prep (including college) is their responsibility.

Tele, I must say this is one time you've contradicted yourself and many of your other stated principles/positions.

If parents are responsible for college, you had best stop looking for a wife right now because you'll NEVER afford college, even for one or two children.

Like I said, I'm very surprised you've taken this position, given your situation.

Tele, I must say this is one time you've contradicted yourself and many of your other stated principles/positions.

Not at all.  A parents role is to prepare his children for their role in life by providing for their education.  If they have the means to provide a very useful and important component of that education to children that they treat as minors, under the age of 21, which is how many of them behave - then they have an obligation.  An obligation to provide for the education of their children.  Which includes career preparation.  It was always the case that parents attempt to help their children establish themselves in life.  Just as it was an obligation for children to care for their aged parents.  It's part of Americanism and fiftiesism, to believe that children can be turned out at 18 and can easily find employment and their own lodgings, because of the bounty of the economy.  Just as the belief that parents can rely on social security and their retirement, and be stuffed in nursing homes, is a product of modern society.

It would, in my opinion, practically be a sin for a parent with means to insist that their child pay their own way in college, when that insistence could very well greatly hinder their future career and life.

As for myself, the claims as to "what I can or can't do" are rather insulting, and irrelevant, since I'm certainly qualified to provide the equivalent of a college education to my children.  I have absolutely no fear as the education of my children, which I can provide myself.  

Heck, I had a lot to do with helping to educate my brother, and his success is something for which I cannot be denied some small share of credit.

Finally I've never suggested that women need a college education.

A parents role is to prepare his children for their role in life by providing for their education.  If they have the means to provide a very useful and important component of that education to children that they treat as minors, under the age of 21, which is how many of them behave - then they have an obligation.  An obligation to provide for the education of their children.  Which includes career preparation.  It was always the case that parents attempt to help their children establish themselves in life.  Just as it was an obligation for children to care for their aged parents.  It's part of Americanism and fiftiesism, to believe that children can be turned out at 18 and can easily find employment and their own lodgings, because of the bounty of the economy.  

But what is meant by the bolded part?

Of course a parent can't ignore their child and/or do a bad job parenting. That goes without saying. I don't think I need to describe here what a good parent should do, which involves giving good example, guiding and spending one-on-one time with their children (particularly sons, who need lots of guidance into manhood and the very adversarial World they will have to face)

I seriously doubt that entails paying Big Ed (educational equivalent of Big Pharma for medicine or Agri-Business for food production) tens of thousands of dollars. There are plenty of ways to help your children get established and fill their heads with knowledge besides paying for a general-purpose modern "college education", which is about as efficient as Public School for the intended purpose (and yes, that's intended as an insult!)

You can arrange for apprenticeships, help them choose a career, take them to meet people in the industry they are interested in, help them fill out forms, try to get student aid/loans, drive them to colleges they are interested in, etc.

But no parent is ever obligated to spend the equivalent of a year's pay on one year of college for a single child. Sorry, that's simply not Church teaching. That's a made-up fantasy of Telesphorus.

College costs are astronomical today; they reach new all-time highs every year. Meanwhile, incomes are lower than ever before. More families are on Food Stamps now than at any time in history.

But no parent is ever obligated to spend the equivalent of a year's pay on one year of college for a single child. Sorry, that's simply not Church teaching. That's a made-up fantasy of Telesphorus.

Eh, Matthew, this is a fantasy about what I believe that you cooked up.

It can be very difficult to get an apartment before age 21. Some apartments will not allow someone under 21 to sign without a co-signer. It's not just college but also helping them transition into adult life. Even if college is free due to scholarships and grants young adult children may need a place to live, help with transportation,  and other forms of financial help to become independent.

 I think many people who had that from parents (apart from if they attended college or not or who paid for it)  take what their parents did for them in their young adult years for  granted.