What is the minimum you have to earn to break even?

[Anonymous]

With daycare, commuting, clothing, eating out at work, etc? Gross salary needed to make it worth it to work rather than stay at home with kids.

[Anonymous]

These are two different questions.

Break even isn’t necessarily the same as worth it.

People often make this mistake - they figure that working isn’t worth it because 90% of their compensation goes to pay a nanny. They forget that in a decade their nanny won’t exist and they’ll be making 3X what they were back then.

But to answer break even for us was about $5000 a month, after tax. At the time it was probably about $90K a year or so pre tax.

But case in point, I now make $280K. So I’m glad I kept working. My friends who didn’t are puttering around at $70.

[Anonymous]

It depends on retirement and other savings goals. The "gross" to make it worth it would be both combined salaries, no? Or are you only thinking about costs of the second parent working? If it's just day care/after care/camps, then somewhere in the realm of $30-35k for us, but with retirement more like $60k. But if that person were staying at home, they would not be putting $26k into retirement accounts.

[Anonymous]

Anonymous wrote:These are two different questions.

Break even isn’t necessarily the same as worth it.

People often make this mistake - they figure that working isn’t worth it because 90% of their compensation goes to pay a nanny. They forget that in a decade their nanny won’t exist and they’ll be making 3X what they were back then.

But to answer break even for us was about $5000 a month, after tax. At the time it was probably about $90K a year or so pre tax.

But case in point, I now make $280K. So I’m glad I kept working. My friends who didn’t are puttering around at $70.

Lol, most people's incomes don't triple in a decade.

[Anonymous]

I would work for free rather than stay home with my kid. I have zero interest in being a stay at home parent. It’s just not how I want to spend my days. Clothing isn’t a relative determining cost for me - I have to wear something everyday. Buying work appropriate clothing is not more burdensome than buying casual clothing. Likewise with food. Eating out is a choice, not a requirement of working. Commuting could theoretically be a cost, but my employer has always paid for it, so maybe I’d specifically target employers that do. If I couldn’t afford childcare on my household income (because it’s not just my income that would matter for making this determination. Childcare allows both parents to work, not just one), I would not have children. But from a household perspective, childcare would simply need to fit into the budget. And if we couldn’t fit it into the household budget I would either get a job that paid more or not have kids.

[Anonymous]

This is a bad way of making a decision whether to stay home with kids. You need to consider long term economic effects of leaving the labor force temporarily including on your retirement and raises you would have obtained the years you didn’t work. And also the intangible benefits for your quality of life. Don’t fall into the DCUM UMC trap of poor me it is so expensive here and not worth it for me to work because my DH makes x dollars.

[Anonymous]

Just to quantify the hit to your retirement -- because I assume anyone who can afford to stay home is maximizing their retirement now --

$18,000 a year put into a 401(k) from age 35 to 40, growing at 5 percent a year until age 70, is worth $450,000. That's with no employer match or anything.

$18,000 a year put into a 401(k) from age 30 to 35, growing at 5 percent a year until age 70, is worth $650,000.

[Anonymous]

I took 15 years off from work to stay and raise our kids. I don’t regret it and in four years after returning to the workforce was up to $120k a year salary. Two kids in college now and two in high school.

I am so so glad that I was home for them when they were little and over the summers, they are too. I am now in a place in my work that I will be able to take off a month to spend with my teens, so worth it!

[Anonymous]

Anonymous wrote:

Anonymous wrote:These are two different questions.

Break even isn’t necessarily the same as worth it.

People often make this mistake - they figure that working isn’t worth it because 90% of their compensation goes to pay a nanny. They forget that in a decade their nanny won’t exist and they’ll be making 3X what they were back then.

But to answer break even for us was about $5000 a month, after tax. At the time it was probably about $90K a year or so pre tax.

But case in point, I now make $280K. So I’m glad I kept working. My friends who didn’t are puttering around at $70.

Lol, most people's incomes don't triple in a decade.

Right. I’m a teacher so my salary would be crappy either way. Only benefit of working is retirement savings.

[Anonymous]

240k gross.

[Anonymous]

When I had my first child I was making 55k/yr. I was also contributing the max into my 401k, which was 15k. After all that I was only netting $2300/mo. 1200/no was going towards daycare. I then had a commute, lunches out and at that job had to dress in business clothes (casual only allowed on fridays). 3 years after my 1st son was born I was making 110k and then came my other son and a nanny that cost (at a bargain rate) of $600/wk plus PT preschool for my oldest. My kids are now 12 and 15 and I’m making 275k/yr and have over 1M in my 401k and have 200k in my mega Roth. I also have the peace of mind knowing if my DH lost his job or fell I’ll I would be able to support my family on my own.

The bigger question is how much in future earnings would not working those early years have cost me?

[Anonymous]

I heard about this and the career growth argument so much when I was pregnant. However, there's so much more to it than that. Most of the people on DCUM assume that everyone is maxing out their retirement contributions, but unfortunately a lot of us can't even afford that. I planned to go back to work after baby even though full time care was going to be most of my take home pay. Then came the realization that due to our differing work schedules and location of daycare I would be doing all of the drop off and pick up - adding at least an hour of commute time to my day. Even with me working, we would have been scrimping and we wouldn't have been able to pay to outsource anything like house cleaning or ordering in/eating out and I would have the stress of a 10+hour day with commute and be left with 90% of baby's waking hours at home. So yeah, it's a really tough call and I miss working. I also felt SOOOOOOO much better after I made the decision to stay home while my kids are little. The reduction of stress was really beneficial to my mental health.

We moved to a less expensive area and my husband got a higher paying job, so now finances are a lot easier. I'm also looking to make a pivot to a more flexible career. As a SAHP I've actually learned a lot about myself in terms of what I want in a career that I think will serve me (and our family) well in the future.

The real issue here is that this country treats families with young children like crap. If I had been able to take a longer PAID leave and return to work with more flexibility and have childcare that didn't cost as much as a mortgage then I almost definitely would have kept working. I've shared my story with groups advocating for paid leave and I will continue to do so. Hopefully we can make parenthood better for those coming after us.

Anonymous wrote:It depends on retirement and other savings goals. The "gross" to make it worth it would be both combined salaries, no? Or are you only thinking about costs of the second parent working? If it's just day care/after care/camps, then somewhere in the realm of $30-35k for us, but with retirement more like $60k. But if that person were staying at home, they would not be putting $26k into retirement accounts.

[Anonymous]

We were paying $2560 per month when I was bringing home $1800 a month. Only for a few years were we losing money, but worth every penny for my sanity

[Anonymous]

Anonymous wrote:When I had my first child I was making 55k/yr. I was also contributing the max into my 401k, which was 15k. After all that I was only netting $2300/mo. 1200/no was going towards daycare. I then had a commute, lunches out and at that job had to dress in business clothes (casual only allowed on fridays). 3 years after my 1st son was born I was making 110k and then came my other son and a nanny that cost (at a bargain rate) of $600/wk plus PT preschool for my oldest. My kids are now 12 and 15 and I’m making 275k/yr and have over 1M in my 401k and have 200k in my mega Roth. I also have the peace of mind knowing if my DH lost his job or fell I’ll I would be able to support my family on my own.

The bigger question is how much in future earnings would not working those early years have cost me?

In what year were you paying $1200 for full time childcare? When we started looking at daycare in 2017 the cheapest option I found was $1900 and I felt it was overcrowded and not an option for us. Every other provider I found was 2400+/ month and that just goes up every year.

[Anonymous]

I don't say it but my wife permanently downgraded her career when she stayed home with the kids for a few years.