Breakeven Costs? Working vs Stay at Home
capeb07
member
Hi ladies! This is my first time posting on this board. I'm currently 11 weeks pregnant (due in July) and am struggling with the decision on returning to work vs staying home, primarily due to the high daycare costs where I live and work (downtown Boston). To give some specific numbers, total costs for childcare and parking would be about $3,100 per month. My monthly take home pay is about $3,500. I historically get a large cash bonus at the year end ($30-40,000) but it is not guaranteed in any way, shape, or form.
I'm wondering how everyone decided to go back to work - if there was a certain amount that you would have to make, if you didn't want to stay home and wanted to work full time, fear of being out of the workforce for a few years, or something different. I know it's a personal decision, I'm just really struggling with the idea of putting my child in day care full time and only taking home $400 a month.
Any thoughts would be much appreciated!
Re: Breakeven Costs? Working vs Stay at Home
It was not an easy decision for me. In my heart, I really wanted to stay home. I love my work, but I think I could have been very happy as a SAHM. I decided to go back because I like the security of knowing I can earn a living if something ever happened to dh. I grew up with a single mom and I don't ever want to have to struggle like she did.
Working PT, we only net $1000 after daycare, but my earning potential will increase. I am a lawyer and changed practice areas. As I become more established in this new area, my salary will grow. It has already grown since I returned from maternity leave.
Also, while I thought I would enjoy being a SAHM while LO was an infant/toddler, I was worried about needing something of my own once he reached school age. The thought of leaving the workforce entirely and then trying to re-enter seemed scary.
But still, $1000 isn't a lot to net after daycare...
When you're running these numbers, don't forget to take into account your retirement savings, including the employer portion, and any benefits you receive through your employer.
Also, be sure to include the $5K that you can have deducted pre-tax that goes toward child care. (dependent care FSA).
And if you historically have gotten that $30-40K bonus every year, I see no reason not to include that. Even if it's not guaranteed, it's a stretch to say you'd only be bringing home $400/mo.
One final consideration is the impact that opting out would have on your retirement savings (due to lost compound interest on the money you'd be putting in) and your career. Will you be able to go back to work at a comparable level a few years from now? Or will you skills be outdated/obsolete?
I know there's a lot to think about, but make sure you include the whole picture, not just the wages in your paycheck.
Personally, I would not work to take home $400 a month. If that were the case, I would work part time evenings. You could waitress 1-2 nights a week, take home that much a month and have everyday to spend with your LO.
For me, I'm in a lucky situation since I have a DH with a flexible work schedule and parents that can help with childcare. I work a job in my field 17 hours a week. I don't pay for daycare since I can make my own hours so that DH watches DS 8 hours a week/my parents help out 9 hours a week. My decision to do this was solely because I had no desire to either stay at home full time or work full time. I like the balance of being home most of the day yet still getting some adult interaction and not giving up my career as well.
If you fear getting out of the workforce because it will be difficult to get back in, I'd suggest try to find some part time work if that's an option in your field and either get someone to come watch LO in your house or find a SAHM who's looking to make a little bit of extra money. You might find that you take home more money that way as opposed to keeping a full time work schedule and having LO in a daycare center full time.
I would have a really hard time choosing to work at that point & would be looking for ways to supplement the money elsewhere. However, my choice would be based on my industry, ability to re-enter the workforce in 4-5 years, and desire to re-enter workforce.
I agree with the others to think big picture....while it is somewhat about money, it's about so much more. Retirement, career, reentering workforce later with skills that are 'fuzzy', etc.
Also, how stable is your DH/SO's job? If it is unstable, would you be able to get your job back if you quit?
What would insurance be like if you moved to one plan for a family vs separate plans?
Meh - is public transportation an option or finding a daycare for less? Finding a daycare closer to home might be an option or working from home 1 day a week, etc.
Its so hard to judge this far out too - I thought I wanted to be a SAHM like my mom, MIL and all my friends did - ummmmm - yeah, SAH was not for me! And, if DH had to bear the financial responsiblity for all of us for me to stay home and then I was miserable with - OMG - that would have sucked!
Thanks so much for all your responses! You all are very welcoming over here! I do have to think about more than just my take home pay. I put a decent amount into my 401k and get a pretty good match, along with free health insurance for myself and my husband and that would obviosuly go away if I didn't work.
I haven't told work yet and I plan to wait as long as possible. I'm really hoping that they'll allow me to work part time or from home for a day or two. Ideally I would love to work 2-3 days a week and stay home the other days. I've been at my job for about 7 years now, so I'm hoping they might be somewhat accommodating. I am really concerned about being out of the workforce and trying to come back in 5 years or so. I've heard a lot of horror stories about that. If part time doesn't work at my current job, I may talk to a headhunter and inquire about temporary work or job shares for a few days a week.
Thanks again!
That said, if you want to SAH or be a WM, money can play very little in to the decision.
That said, if you want to SAH or be a WM, money can play very little in to the decision.
I'm going to be faced with a very similar decision once #2 arrives. With the cost of day care for 2, it just won't make much sense financially for me to continue to work. That being said, I plan to wait and see how my maternity leave goes to decide whether or not I feel cut out to be a SAHM. If I do, I'll probably SAH and work part-time on weekends/evenings. There aren't many pt options for me in my field, so I'll probably have to work making much less...but it would be some extra money.
It really is a personal decision, and I'd wait until you're on maternity leave to make any definite decisions.
Like the others said, be sure to consider all of the financial benefits of working when you do your cost analysis, and as well as important non-financial aspects like your personal happiness, job experience and advancement, how hectic a pace you can/want to deal with, etc.
DH is a SAHD. It came down to two things...he is happier staying home with the kids than he was working, and we as a family are much happier with the more laid back lifestyle we can have nights/weekends with having one of us home. Financially, it would be pretty much break even if he worked, and not being particularly career orientated, those two factors weren't really in play for him.
I probably wouldn't work if I was counting on only my salary and not the bonus if I was only taking that amount home. For me, the cost of childcare doesn't come close to my salary so it was a no brainer to go back. That being said, DS goes to an in home DC in MA which is much less than a center. Not sure how many there are in Downtown Boston but home daycare's are highly regulated in MA and have a great ratio so you could maybe consider that. Or, can you work part time? Maybe you could get a part time nanny that way you can stay in the workforce for all the benefits mentioned above.
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For me it was a no brainer - my salary is high, but also I have our health insurance and a much better 401k match. In addition, the cost of me staying home is significant. My friend who took 9 months off with her first kid and then went back 3 days a week (albeit for a non-profit) and now works 4 days a week making about a third of what I make. Although it's possible to step off and take a little less of a bump, taking time out of the workforce can put you significantly behind in salary. Just some other things to think about. I think the real question is - do you want to work? And the other question is - do you need that $400 a month? Only you can answer that.
Hi all. We can get insurance coverage through my husband's job for about $100 a month. And we are going to start banking my salary each month going forward. We have been saving a few thousand dollars every month, but some months more than others so this will regulate our savings. We don't need the $400 that I would be making, but my salary right now is about 50% of our income, so it would be a big adjustment.
I guess I'll see how I feel as we get closer to July. Thanks for all your thoughts!
Would you mind my asking where you send your kids? I live in Southie and am pretty set on the Seaport Bright Horizons ($2,677/month). The courthouse location has a 2 year wait and there isn't much else right downtown that I can find, other than a KinderCare on Atlantic Ave that I haven't heard good things about (for $2,000/month). I can't find any centers in Southie that aren't exclusively for low income families and I haven't been able to find any home centers that aren't in the projects, although I don't know exactly how to find home centers. I take the bus to work now, but it's a 10 minute walk from my house to the stop and then a very crowded bus ride, plus a 5 minute walk once we get off. Thanks!
Bright Horizons is literally the MOST expensive place in the area. I don't know what centers there are in Southie, but if I were you, I'd keep looking for family daycares (that's where we send our kids). Also, talk with your employer/HR - lots of employers around here have various childcare resources. I don't live in Southie, so I don't have a great rec for that area, but if you google EEC, they have a list of all of the certified daycares in Boston. Then it's just a matter of calling and visiting. I'd expect family daycare to run you about $50-70/day. Also, I know there are a bunch of family daycares in Dorchester on the Southie line if you're in that area. Finally, you may want to start talking with moms in your area - there may be some kind of local internet board that could prove to be a good resource for recommendations, etc. (Oh yes, and we walk our kids to daycare - in the beginning even a crowded bus shouldn't be that big a deal if you wear the infant in some kind of carrier - as they get older and need a stroller or something like that, it gets to be more problematic!)
Good luck!
This is me. I am not SAHM material. I love my DD and am a great mom but it's because I work and because DD also goes to daycare that it works for us. Also, I am 50% of household income plus the health benefits owner, so it would be a very big adjustment for us. Neither my DH nor I want to change our lifestyle so working is part of it.
My income is about 60% of our total take home, but if we needed to we could live off of DH's salary...
I LOVE what I do. I LOVE where I work. It took a maternity leave to realize that I was not cut out for staying at home. Some people are good at it, and it shows. I am not, and I feel like I'm just a better mom when I go to work. I am more fulfilled with what I do outside the home, and I do not think that makes me a bad mom, it's just how I am. So it wasn't an issue over money for us.
That said, I think you could definitely find a more reasonable childcare option. But I also think that you might have to weigh in factors other than just money when you are deciding whether or not to stay home. Good luck.
I'd work in some capacity even if I didn't make any money. I am (very) lucky to work three days/week and make a good income, but work for me is about so much more than the paycheck. I honestly struggled being home with DD 24/7 while on maternity leave and have been much happier since going back.
FWIW, this surprised me a bit.
Exactly! If you can, I would even wait until your LO is maybe 6 months old or so to make this decision. Its going to be very hard to send your baby to daycare after 6-8-12 weeks, you're going to be wavering but that doesn't necessarily mean you'll want to be a SAHM.
I work from home with my own business and when I was pregnant had thoughts of putting everything on hold for the first year and just being a mom. I learned very, very quickly that I was not cut out for that. That being said, I still wouldn't have been ready at 8 weeks to hand over my child.
I don't know what you do but maybe consider taking an extended maternity leave, I think FMLA will let you take 12 weeks, and see how you feel. If you are hysterical and cannot fathom being back to work and away from your child at 3 months, then maybe staying home is for you. By 3 months life starts evening out a bit, the baby isn't just a newborn "lump" but really getting into their own. I think 3 months is a good mark to see how you feel, 6 months is even better.
I wouldn't do anything until the baby comes. You just don't know how you're going to feel once the baby comes.
agree with this!