Daycare costs coming close exceeding salary - question

BoxTer

MH and I have been discussing the logistics of a second child (he is much more in favor of the idea than I am). He earns considerably more than I do, and when I start doing the math, two children in daycare would come close to wiping out my salary, though I know we could make it work since we did it until DD was 13 months old. We do have a joint account so it's not like the money is in separate pots, but that's how I look at it, though maybe I shouldn't. Even though my job isn't the most lucrative, I enjoy it, I went to grad school to be able to do it, and I am finally working at a place I really like. I have no interest in being a SAHM, but financially, it seems silly to work to basically pay for daycare. But should I look at the situation differently and look at the impact of daycare on our combined salaries vs. how it would impact mine? MH will be supportive of whatever I decide - he knows I'm happier working. We could wait a few more years, but I turn 34 in four months, he will be 36, and if we have another child, we don't really want to put it off too much longer. I've thought about this so much that I can't really see it clearly or objectively so some outside thoughts on the matter would be appreciated.

eb2277

Have you considered benefit costs?  I am not sure if you have a retirement plan or receive matching contributions, but you should take all that into account if you haven't already. 

I am in the position where I have to work (but if given a choice), I think I would choose to work. 

I think having a job that you like and a place you like to work are hard to find.  Will you be a better mom by working? 

Mind_the_Gap

I'm not in your situation, but I thought I would offer this viewpoint.

You say you enjoy your job, and don't really want to be a SAHW.

There is a cost to leaving the workforce, especially if you hope to return some day.  You lose experience, retirement monies (if you company offers 401(k) matching, etc.), PTO accruals, etc.  This cost isn't as concrete as daycare for two = your salary, but weigh the pros and cons of both sides.  There can also be some difficulty in reentering the workforce trying to get a job doing exactly what you want to be doing and competing with experienced candidates.

AmyCC1980

You are not paying for daycare on your own, it is a household expense, so you shouldn't look at it as wiping out your whole salary.  But even if you did, who cares?  There are plenty of women out there who make far more than what daycare would cost but still decide to SAH.  Why can't you do the opposite?  Money should not be the sole deciding factor.  Do what makes you happy and works for your family.

massdreams

If you are happier working, and wouldn't be losing significant amounts of money by working and paying for daycare, I say continue working, even if you break even. I don't think women should feel like they need to stay home if working doesn't necessarily provide big financial gains to the family. It's what makes you the happiest and your family the happiest that is important. Keep in mind too, that right now you might come close to breaking even on those numbers, but you could get a raise in the coming years. Also, do you have money going into a 401K from work? If so, don't forget to include that in the money situation.

14years

It sounds to me like you should have your second child and continue to work.  Don't focus on *your* salary vs. the cost.  (You could just as easily state that daycare for #2 will reduce DH's salary by, say, 15%.) 

The more important question is how does both you and DH working impact your overall family happiness?  It's not silly to do something you enjoy that fulfills you and makes for a happier overall family situation.  There are many, many reasons to work other than money, the most important being that you *enjoy* it.  Also, if you wouldn't want to SAH forever, and it sounds like you wouldn't, it's important to keep a stable and consistent work history.  I bet you also have some benefits -- insurance, 401(k)? -- that come with working. 

And, I hear you on not putting it off.  Our kids are going to be just under 2 year apart, but I am 34 now and we needed to get the show on the road.

BoxTer

These are some good thoughts, thanks. I do get some good benefits from my employer. I think I'm just too close to the situation and can't really think about it objectively!

beckytr

I believe that you'll make more in the long run if you stay in the workforce rather than SAH and then return, so even if you break even now you're increasing your future earning potential.  GL.

At1stsight

Even if my salary was the cost of daycare, I'd work for the reasons you mentioned. I have pride in my job, spent a lot of time on my education, and frankly just know that I enjoy working a lot more than I would being home 100% of the time. My personal belief is that me staying home would be detrimental for my family bc I'd be miserable - hence the family as a whole would suffer.

xmasbabymama

I am in the same situation and DH and I haven't talked that much about it, but I tend to look at it this way - even if we take a hit on daycare for a couple of years - it's a short term situation and long term, we'll be better having my salary, benefits, experience on the job and salary increases over that period of time than we would if I SAH for that time. I like being a working mom.

We might consider other childcare alternatives for 2 - maybe a nanny - and I am thinking about going parttime when we decide to have another, but it's doubtful that I will SAH.

duchess0727

I have friends who work purely for their sanity - it brings $0 additional into their household and they are ok with that because they are HAPPY.  So I think first and foremost you should consider that because happy moms have happy kids!  Also, consider the costs of staying home in your decision - my friends who are home shop a lot more than I do, plus the cost of classes and/or preschool for your kids, etc.  And also factor in lost income by taking time out of the workforce plus other benefits as people mentioned like retirement, health, etc.  As others also mentioned, you could try to find less expensive childcare if you could use the extra money in your household. 

tosababy

In addition to the other benefits of your job, as well as the continuity of your career, remember that two in daycare is a very temporary situation.  By the time a not yet conceived child is ready for daycare, your older daughter will be at least two and a half.  She'll then start school 2-3 years after that so your costs will go down.  Also, your income will increase over the years.

Linds&Chris777

Personally, if daycare costs were about to exceed my salary or come anywhere close, I would quit my job.  I love it, I have a passion for it, but I'm not going to put my child in daycare full time just so I can work.  If anything, I would just work part time or take a few years off until DS#1 was in school or something.  If you quit now, it wouldn't have to be forever, you can always go back later on.

Feb3

When you do your calculations don't forget to add in the costs of SAH.  I was surprised when I realized how much my SAHM friends spend on classes and activities for their kids - things we don't do because DD gets all that socialization from DC. 

 Also I agree with most of the PPs about the benefits (financial and otherwise) of continuing to work.  In your position I would most likely keep working.

yellowcar

Linds&Chris777:

If you quit now, it wouldn't have to be forever, you can always go back later on.

 I don't think this is necessarily true.  It completely depends on your industry and how you maintain your skills while you have opted out.  That is a big reason why I don't SAHM.  Life moves on while you are not working, and just a few years off can be a lifetime of advancement in certain areas--like technology, education (non-K through 12), etc. It can be extremely hard to find a job at the same level and salary as the one that you left.

Also, with the economy and layoffs the way they are right now, I would think long and hard about how secure my DH's job is before I quit mine.  Good thing I did--6 months after I returned from mat. leave my DH was downsized.  He still has not been able to find a job, so thank God we still have my income. 

AutumnBride929

I always looked at it as wiping out my salary, too.  I never thought to combine our salaries and then look at it, lol.  Maybe that's a better way to go.  Because I'm like you.  I enjoy working at I don't think being a SAHM is for me!

Feb3

yellowcar:

Linds&Chris777:

If you quit now, it wouldn't have to be forever, you can always go back later on.

 I don't think this is necessarily true.  It completely depends on your industry and how you maintain your skills while you have opted out.

 

That's a great point and one of the big reasons I didn't even consider taking an extended maternity leave. Many jobs are not the kind that you can jump back into after an extended absence. 

BennyL

Feb3:

When you do your calculations don't forget to add in the costs of SAH.  I was surprised when I realized how much my SAHM friends spend on classes and activities for their kids - things we don't do because DD gets all that socialization from DC. 

Good point! I didn't think of that.

cala09

Could you pursue a reduced or part-time schedule so that you could get discounts on daycare?  I don't know what industry or field you work in, but there are some opportunities out there for part-time positions or even job-shares (with another person with similar qualifications and interest to work a reduced schedule). 

MegGary

What about part time? Also if your career is fulfilling to you than it's not a waist to work.

Unknown

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