Childcare vs. Income

jaybird42 · January 2015

I've run the numbers and the cost of childcare is over half what I make at my current full-time position. DH works the same hours and we don't live near family. I'm a FTM and this is my first job in the field I studied for (social work). I put myself through college waiting tables and it makes more sense financially to go back to that. I could possibly further my education so I could get a better paying job in my field later on. However, I'm worried about the gap in professional employment and also about breaking the news to my current employer. Has anyone experienced being unable to afford to work? How did you handle that situation.

kikimeemee · January 2015

Don't forget to include things like employer match for your 401k/403b and health insurance benefits when considering your "income." Often times people forget these valuable tidbits.

But I do understand. I waited a good four years to try for a baby as I wanted to further my career and income to a certain lever first.

jaybird42 · January 2015

That's a good point.

minirella · January 2015

Sort of. I work 2 part-time jobs. One of them I need for insurance. I will be looking for someone to come to our home to babysit. I make okay money but had a set of twins plus we have another child (3 total). We didn't plan on twins, it is just how it worked out. I wouldn't change it for the world but it certainly throws a curve ball in everything. It is hard enough to get 1 daycare spot in this town let alone 2. Whether I stay part time at 2 jobs or go to 1 full-time position, childcare will consume about 2/3 of my income.

minirella · January 2015

My husband doesn't make enough for me to stay home. The leftover money from my checks pay the mortgage, groceries, and formula/diapers.

TheBorg7of9 · January 2015

Also consider the lost future income from your career gap -- delayed raises and promotions.
And why are you only comparing to your salary. Compare it to your total household income, not just the woman.

minirella · January 2015

TheBorg7of9 said:

And why are you only comparing to your salary. Compare it to your total household income, not just the woman.

Not sure if this is directed at me but my husband and I have separate accounts. Works great for us, never have had an argument over money or purchases. We divide bills - childcare is a bill that I'm responsible for and comes strictly out of my salary. Total household income is irrelevant in our case.

becominggold · January 2015

My childcare is about 1/2 of my take home pay. However, this does not account for my disability insurance which is taken out, or the fact that my job pays 90% of my health insurance.

[Deleted User] · January 2015

minirella said:

TheBorg7of9 said:

And why are you only comparing to your salary. Compare it to your total household income, not just the woman.

Not sure if this is directed at me but my husband and I have separate accounts. Works great for us, never have had an argument over money or purchases. We divide bills - childcare is a bill that I'm responsible for and comes strictly out of my salary. Total household income is irrelevant in our case.

Total household income is relevant even with separate accounts.

[Deleted User] · January 2015

I would continue working even of it took 99% of my salary because, to me, there are benefits beyond take home pay.

shannm · January 2015

Daycare for DS for four years was half of my take home, a little less than a quarter of our combined. When DD came along, most of my take home went to childcare.
But it was all temporary. I would not have been able to leave my career and then ever come back. I also knew that DH would eventually make more. I also hoped to make more. We do make a bit more now but DS is now in private school so about half my pay goes to education and daycare.

In your situation, I would ask about additional benefits, do you like your work, can you make it work till your kids are in school? Working as a mom is not all about take home pay.

Mustardseed2007 · January 2015

Well, my h makes less than what I do, and looking at our total dc cost for two kids, it's over half his take home pay. However, he has a retirement plan that he contributes to, and he carries the insurance for our entire family bc it's better than what is available to me. He also is contributing to a daycare flex account that is available through his work and not available through mine. Even the residual income is nice to have (more than nice). As a percentage of our total HH income dc is a large expense (about 700 per month more than our mortgage) but someone has to take care of our kids and going this route is best overall for our family given the entire picture.

If he wanted to stay home, I wouldn't reject the notion out of hand, but particularly bc of the health insurance we'd have to really talk about it and work through the numbers.

Beevol · January 2015

TheBorg7of9 said:

And why are you only comparing to your salary. Compare it to your total household income, not just the woman.

Not sure if this is directed at me but my husband and I have separate accounts. Works great for us, never have had an argument over money or purchases. We divide bills - childcare is a bill that I'm responsible for and comes strictly out of my salary. Total household income is irrelevant in our case.

I'm sure you have a reason for it, but is the baby not also your husband's? You do you, but I think your plan of considering child care only your expense is asking for you to grow to resent your husband, especially if you leave your career for it. Keeping your finances separate and having his and hers expenses is fine, but if you're going to spend like a single mom, you may eventually want to be a single mom - at least then you would get child support and a better tax break.

jaybird42 · January 2015

I appreciate all of your responses. You've given me a lot to consider.

Regarding household income...my husband and I make about the same and combine all of our money and expenses ....always have even during periods of unemployment there was never a question of "mine and yours". We both have insurance benefits and can be covered under each other's policies if needed.

Someone asked if I like my work. I do, although it is very stressful, can be dangerous and mentally/emotionally draining. In the first few years of my child's life I think it would be beneficial to him and to my sanity to do work that is only physically demanding (ie: serving)

Mustardseed2007 · January 2015

Actually I do understand when you are considering whether it is worth it for one person to work why you'd subtract out childcare expenses from that persons's salary-bc if you lost the salary you'd also drop that expense since you'd no longer need it. It's not like you're saying that the wife's job is responsible for paying for daycare, it's just if one person stayed home you wouldn't have to pay for daycare.

If my h stayed home our food costs would probably also go down and we wouldn't have the maid as much bc I would hope he would clean a bit more and we wouldn't go out to eat as much-not that watching kids full time isn't a full time job by itself though. I know that aspect is talked about a lot on here, you don't get as much HH stuff done as you would hope. But I would hope to factor that savings in along with loosing out on retirement and healthcare options plus whatever damage leaving the workforce would do to future earning potential.

MommyAtty · January 2015

I don't think OP is saying she's going to quit working. I think her options are (1) stay in the field she's in now at a low salary, or (2) go back to waitressing, which may be close in salary and allow less in daycare cost because of schedules that don't overlap and may allow her to go back for an advanced degree. But that's just how I read it.

If that's the correct reading, I could go either way if you're really serious about going back for the advanced degree right away. I think it's pretty easy to explain a lapse in professional work history if the reason is education.

minirella · January 2015

Beevol said:

TheBorg7of9 said:

And why are you only comparing to your salary. Compare it to your total household income, not just the woman.

Not sure if this is directed at me but my husband and I have separate accounts. Works great for us, never have had an argument over money or purchases. We divide bills - childcare is a bill that I'm responsible for and comes strictly out of my salary. Total household income is irrelevant in our case.
I'm sure you have a reason for it, but is the baby not also your husband's? You do you, but I think your plan of considering child care only your expense is asking for you to grow to resent your husband, especially if you leave your career for it. Keeping your finances separate and having his and hers expenses is fine, but if you're going to spend like a single mom, you may eventually want to be a single mom - at least then you would get child support and a better tax break.

All of our children are ours together. I actually love having separate accounts and it's actually opposite of what you think. We did it because we are both real anal with our money. I didn't want to give up my account and he didn't want to give up his. When we married, we were not fresh out of school or anything. Our accounts had long been established. We have an awesome marriage and like I said, never had a disagreement on spending (which is one of the biggest of all disagreements among married couples). I can spend what I want as long as I have the funds - no questions asked. My husband the same. As long as our bills are paid first. I trust him to do that and vice versa. We've never had one financial issue. I don't know his exact salary or what the percentage of bills come out of his checks. I don't really care. If I need help with a bill, I ask and so does he but that is really rare. Whenever an extra bill comes in, whoever has the $$ will pay it. We divided up the bills 6+ years ago. I will know our yearly household income when the accountant does our taxes. I make career decisions based on what bills I have to pay. The plus for me is that I am a nurse and I work at a hospital on a part-time basis and prior to the twins, it wasn't uncommon for me to bring home a couple thousand extra each month just by picking up extra shifts. It is harder for me to work like that now but my husband has no qualms with watching the kids while I pick up extra shifts because I normally buy things that benefit both of us - like eating out or the dishwasher I bought yesterday. We also have separate PO Boxes although he has a key to mine and gets my mail. It's just hard for me to give up. Our bank accounts are joint in the event of an emergency or death. I get that this doesn't agree with everyone but like I said, it works great for us. I have plenty of friends that tell me I don't have a true marriage but then will gripe about their husbands spending. The few people that I know with separate accounts won't give them up.

minirella · January 2015

Just to add, my husband will pay the childcare bill but it would mean that I would have to pick up another bill that he pays. The reason that I take the mortgage and childcare bills is because my non-nursing position pays me once a month at the first of the month (a fixed amount). He gets paid bimonthly. Daycares want their money first of the month and it is easier for me to pick up that chunk than it is for him. We took bill due dates when dividing up the bills. I don't pay for my van, utilities, phone, taxes or insurance, vehicle maintenance cause he funds all of that, so in the end, it evens out.

[Deleted User] · January 2015

That's the point. It doesn't matter if separate or joint, in the end the household pays for childcare. The household income should be considered.

lexusolsen · January 2015

I think a lot of people don't consider the costs associated with being home more, I know I didn't when I SAH. Our electricity bill went up, my gas was about the same because I was driving to story time, the park, play dates, and the zoo instead of commuting to work. I ate out more (because we were out doing things and because sometimes you just have to get out of the house) and i struggled to lose the baby weight because I couldn't afford to pay for childcare at the gym (which isn't usually available until baby is six months old). The number of low cost, enriching activities varies greatly by area but things like mommy and me classes, museum memberships and zoo passes add up quickly. SAH isn't always that cheap. I would also urge you to wait until after the baby comes to make a career switch because having a baby is a life changing event. It will change how you see yourself and it will impact your marriage. Why put more strain on yourself or your marriage than you need to? You can always quit your job and begin serving or SAH but once you quit it might not be as easy to get back.

kristennd · January 2015

Mustardseed2007 said:

If my h stayed home our food costs would probably also go down and we wouldn't have the maid as much bc I would hope he would clean a bit more and we wouldn't go out to eat as much-not that watching kids full time isn't a full time job by itself though.

Unexpectedly, we didn't need to hire a cleaning service UNTIL my husband was staying home with our son. Also the eating out went up.

There was a book from Leslie Bennetts a few years ago with an unfortunately inflammatory headline (The Feminist Mistake) but a lot of really useful data and case studies about the full costs of staying home. I think she also addressed switching to a part-time or otherwise non-career track position but not in as much detail of course.

BabyHope2013 · January 2015

Before I had my first child, I remember having a breakdown at some point during my pregnancy on how we were going to afford paying for childcare. My husband thought I was on the crazy side, but it turned into a big stressor for me for a while. It wasn't until I sat down and actually made a budget before I finally felt better. Perhaps sitting down and spending some time figuring out all of your bills, expected expenses for food and such and then how much you can/want to contribute to savings or a college fund for your child, along with daycare might be helpful. At that time you can also consider cutting out things you don't need---HDTV, eating out etc. And even look at where you can cut, lowering cell phone bills, cutting back on movie channels with cable etc.

Like PP's said, you need to look at the household income. DH makes more than I do. I am ok with that, but still beat myself up about not making more. I also know that if I were to quit, then we would be losing out on the additional income I do provide---and the better health insurance. You need to look at the biggest picture possible. Kids are expensive---childcare especially, but it is only for a few years that daycare costs really cut into your budget that bad. Then assuming they go to public school it gets better. So you need to look at the long term projections too.

Mustardseed2007 · January 2015

kristennd said:

Mustardseed2007 said:

If my h stayed home our food costs would probably also go down and we wouldn't have the maid as much bc I would hope he would clean a bit more and we wouldn't go out to eat as much-not that watching kids full time isn't a full time job by itself though.

Unexpectedly, we didn't need to hire a cleaning service UNTIL my husband was staying home with our son. Also the eating out went up.

There was a book from Leslie Bennetts a few years ago with an unfortunately inflammatory headline (The Feminist Mistake) but a lot of really useful data and case studies about the full costs of staying home. I think she also addressed switching to a part-time or otherwise non-career track position but not in as much detail of course.

Yeah, I've heard that. And I can see why it would be true. Our house is so much more clean during a normal work week vs. holiday periods (like last week) when our house looks like a bomb went off.

NicoleWI · January 2015

I am lurking again but I would say absolutely do NOT quit your professional job to be a server. Long-term, I think this is a very bad move. I also dislike that you are putting all your career aspirations on the back burner, making it very difficult to get back into a job and move up in your career later, while your DH stays on track. If you stay in your job, you will likely have opportunities to advance or to job search for something new. Quitting to be a server, while it might be more money in the short-term, is definitely a bad move for the long-term. Plus, do you have benefits with your professional job? That's HUGE.

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