Every day, around the world, countless mothers (and quite a few fathers) are considering the same question: Now that my kids are older, is it time to go back to work? The U.S. Census reported that there were 5 million stay-at-home mothers in 2010. And the decision to forgo paid employment in favor of days filled with finger paint, potty-training and Mommy-And-Me playgroups is certainly rife with emotion and even debate.
It’s also very personal, and not just because these choices reflect our unique sets of values. The decision to be a stay-at-home parent — or to return to work — is a financial one.
Let’s face it, if the family needs the money, going back to work sure beats sharing a one-bedroom apartment with three kids, a dog and a snoring partner. Right? But the math has to work out.
That’s because for many parents, returning to work means paying for childcare — and anyone who has done this knows it usually ain’t cheap. The good news is that the math involved is pretty simple. You just need to take a little time to work it out.
Jackie has three gorgeous kids, all under the age of 6 years old. As the economy has worsened, her husband’s salary just isn’t going as far as it used to, and besides, she’d like to get back to her career as a pediatric nurse. The doctor she once worked for called to see if she’d be interested in a part-time position at his practice.
Financially speaking, is this a good idea? Let’s look at the numbers.
If she takes this position, she can earn $210 per day, after taxes, and she would be expected to work three days a week. The practice doesn’t offer health insurance for part-time workers, but the family is on Jackie’s husband’s plan, so that’s a non-issue. Other benefits are minimal, as there are no sick or vacation days and no retirement fund. (She can switch schedules with another part-time nurse to cover any days she needs off.)
How much can she expect to earn each week?
$210 x 3 days = $630
Jackie can’t bring her kids to work with her or let them fend for themselves. Nope, she’s got to think about laying out some cash for childcare, and like most folks, Jackie has a somewhat complex situation to consider. Her oldest is in half-day Kindergarten, so she only needs part-time care for her. But her three-year-old twins need to be looked after all day. While her mom would love to watch the kids, the eight-hour commute to her house just isn’t practical.
Calling on friends and neighbors, Jackie considers her options. Pretty quickly, her decision becomes clear. Luckily, there’s a daycare center just around the corner from her daughter’s elementary school. Even better, it offers part-time care. And just down the street from Jackie’s house lives a woman who offers in-home care. She places a few calls and learns that each place has openings.
Still, she needs to crunch the numbers. The daycare center charges $50 per day, for part-time care. The in-home caregiver charges $175 per week, per child. How much of a hit will Jackie take in her take-home pay?
First, she needs to find the cost per week for her older daughter:
$50 x 3 days = $150
Next, she needs to find the weekly cost for her younger children:
$175 x 2 = $350
Finally, she adds the two together:
$150 + $350 = $500
So she can reasonably expect to pay $500 per week in childcare. That means she’ll be taking home $130 each week.
$630 – $500 = $130
Yikes! What looked like a great part-time salary is now looking pretty skimpy. But there are two more calculations Jackie considers before freaking out: Her monthly and yearly take-home after childcare costs.
$130 x 4 weeks = $520 per month
$130 per week x 50 weeks = $6,500
These numbers tell her that she can contribute more than $500 each month to the mortgage payment. Or if her husband gets that promotion he’s looking at, they could put almost $7,000 towards their savings.
There are also other financial benefits to consider. For example, if Jackie keeps one foot in her career, she can get up to speed (and stay ahead of) changes in her field. And if she’s already employed at the doctor’s office, she may be better positioned for a full-time job once the kids are all in school.
Now Jackie only has to deal with the emotional decisions — which are pretty tough. But with these figures, she can at least say for sure how her family’s budget will benefit in the short run.
All you parents, what went into your decision to get back in the work force or stay at home? Did you do the math to figure out if it was financially worth it? Or did the numbers show that staying at home was much more financially viable? Share your stories in the comments section.