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One thing that you start to think of when planning for a kid (or after you realize that one is on the way) is the financial situation.  This becomes a little more tasking with a two-income family.  Since being married, Pam and I have gotten used to living on two incomes.  Once the kid arrives, we’ll be knocked down to living on my income alone.  It seems daunting, but I know many families out there that do it and they seem to get by just fine.  The financial planning is two-pronged: cut down spending to live off one income, and still be able to set money aside for investing as well as a kid-college fund.

For Pam and I (probably for me more so than Pam, because I seem to like expensive toys), we are definitely going to have to figure out what our necessities are and make some cuts somewhere.  For me, that probably means not getting the Direct TV Sports Pack next football season and not setting the thermostat to 65°F all the time.  For Pam (and me) that also probably means not going out to eat as much (not fast-food, but the sit-down places).  Easy enough.

Right now what’s killing us are our vehicle payments.  When Pam and I got married, we bought two brand-new cars within a month of each other.  Those payments alone (with insurance and gas) account for $1000 a month!  Easy to handle with two incomes, not so easy with one.  Luckily they both will be paid off in Jan ’09, freeing up some money.  I just wish it was August ’08 that they were paid off.  Oh well, we’re a year out from owning both of them… we can make it work.

Pam and I initially talked of selling one of the vehicles to free up some money.  She would then drive the truck and I would make do with the 1972 240Z and the motorcycle.  This initially seemed attractive because if Pam and I go to Europe, then we’ll really just need one car.  The problem, in my opinion, is we’re just delaying the inevitable: eventually we’re going to have to buy another car when we get back, which entails taking on more payments.  The thing I hate about vehicles is that they depreciate so much: any vehicle you buy you are going to lose money on. 

So (and correct me if I’m wrong), we’re essentially losing more money in the long run by selling the Miata we’re about to own and buying another car some time later… I guess I see it as pulling your money out of a stock when it’s down 20% and reinvesting it into another stock that you know is going to drop 20%.  Whereas if you keep the car you initially bought, you’re sticking with a stock that is down 20% knowing that each year the percentage drop is going to be less and less (say down 5%, then down 3% the following year).  Even if we do go overseas with one vehicle, the Air Force will pay to garage the other one (and we won’t be making payments on it by then and can take it off insurance while we’re not using it).  That’ll essentially free up the same amount of money as if we didn’t own it at all for the time being.  So I think the correct solution is to just hold onto what we’re paying off and keeping both vehicles.

Since we’ve decided to keep both vehicles, once Pam starts showing she’ll now drive the truck and I’ll be driving the Miata (yeah, get your laughs out now – at least it’s convertible).  Which now brings us to problem #2: we bought the truck to keep, knowing that it would be “kid adequate.”  What we didn’t take into account when we travel around is having two rather large dogs (greyhounds) to transport as well.  Those two dogs take up the entire back seat!  With a kid in the back seat now, where the hell are we going to put the dogs?  There’s no way we’re going to travel across the country with the dogs in the bed of the truck.  So now back to above: should we just sell the Miata and get an SUV or a station wagon?  Being not too fond of trading in a car that’s almost paid off for another one that we’ll extend our payments on for another few years, I couldn’t think of any other options… until yesterday.

Rather than eat another $20k on trading-in, why not fork out $1500 for a truck topper for the bed?  This gives us a pseudo-SUV.  We could throw the dogs in the bed knowing that they’ll be protected from the elements and free up the back seat for kid transport.  The best part about this is we don’t have to smell the damn dogs farting the whole time, as they’ll be sitting in their own stench by themselves in the bed of the truck!  I was curious to see what the truck would look like, so I took an old picture of the truck and photoshopped the top onto it.  If you hover the mouse over the image below, you too can see what our “new” truck will look like.

So I think that’ll be the solution.  I’ll probably coordinate the top while overseas and either have Pam drop the truck off to get it installed or do it when I get back.  I’d rather lose $1500 now on a soon-to-be paid off vehicle than lose ~$10k on a new/used vehicle we’d trade in the Miata for.

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