SAHM vs. WOHM, the cost difference is $16,500 help me decide

[Anonymous]

So my husband and I crunched some numbers last night.

Assuming that I find home daycare in North Arlington for $325/week, I will make about $16,500 take home pay at my current job. This includes all the tax changes that will occur and health benefits. It does not include my company's 401K matching. I'm guessing that might be a 4K/year benefit.

I worry about:
1. relying on one income, even though DH's job is very stable and company is well managed
2. not being able to get back in the work force if I want/need to - and if i do, having a worse job than i do now(I'm 29.) Current job is fine, not great, not bad - just a good job.
3. going nuts being at home 24/7 talking baby talk (i know a few batty SAHMs)
4. All the things I should be worrying about but I can think about right now.

Financially we would be okay, though our retirement savings would decrease.

[Anonymous]

Can you go back part-time? I think the long-term costs of dropping out of the workforce entirely are fairly substantial; part-time would allow you to keep some hand in the working world while also giving you more flexibility.

All that's moot if what you truly want is to stay home. If you do, go for it, there are many ways to make it work.

So, what's in your heart? It may be hard to tell before the baby actually gets here, but maybe not.

[Anonymous]

$16.5K plus $4k/year in retirement savings isn't nothing. If you enjoy your job and want to stay in the workforce in the longterm, I wouldn't quit. If you are really excited about being home with your newborn, you can afford it, and your employer is agreeable, you could work out a longer unpaid maternity leave. Then in a few months, you can go back to work if you're feeling batty, or stay home if that's what works for you.

[Anonymous]

OP, what field or profession are you in? Some fields are harder than others to break back into.

Do you like what you do, or are you basically dissatisfied with the work and looking for an opportunity to change things up?

What are your long term career goals and prospects if you stay in your current job? Is it a dead end or do you see other positions that you can envision being happy and better compensated in?

Are you in a field where salaries start low but are likely to take off in the next few years?

Also, how much would your 401(k) match work out to? You really need to count that in your analysis.

[Anonymous]

Anonymous wrote:So my husband and I crunched some numbers last night.

Assuming that I find home daycare in North Arlington for $325/week, I will make about $16,500 take home pay at my current job. This includes all the tax changes that will occur and health benefits. It does not include my company's 401K matching. I'm guessing that might be a 4K/year benefit.

I worry about:
1. relying on one income, even though DH's job is very stable and company is well managed
2. not being able to get back in the work force if I want/need to - and if i do, having a worse job than i do now(I'm 29.) Current job is fine, not great, not bad - just a good job.
3. going nuts being at home 24/7 talking baby talk (i know a few batty SAHMs)
4. All the things I should be worrying about but I can think about right now.

Financially we would be okay, though our retirement savings would decrease.

This should be your biggest concern. The difference is not $16,500, it's the difference of all of the money and retirement savings you will not be making over the course of your entire career. You may find it very hard to find a job if you decide or need to return to work, and even if you can, you may find yourself making a lot less money than when you left. Do you have enough savings to cover expenses, health insurance, etc. if your DH is laid off and can't find a new job for a while, or if one of you becomes disabled? Will you still be able to fund your retirement, and college savings (if that's a priority for you), with the understanding that money you put in later will have less time to grow than money you put in now? What if you get divorced? (I know I know, but it really does happen sometimes to people who never expected it.)

I'm not trying to be negative about this decision -- you may very well have the resources to handle it. But I think you are looking at this the wrong way. It's not just a dollars and cents calculation based on your current situation. You need to take the long view and think about the effect this will have truly for the rest of your life, if things go the way you are planning/hoping, but also -- and perhaps more importantly -- if they do not.

[Anonymous]

Anonymous wrote:$16.5K plus $4k/year in retirement savings isn't nothing. If you enjoy your job and want to stay in the workforce in the longterm, I wouldn't quit. If you are really excited about being home with your newborn, you can afford it, and your employer is agreeable, you could work out a longer unpaid maternity leave. Then in a few months, you can go back to work if you're feeling batty, or stay home if that's what works for you.

+1 If you can work out a flexible work environment (WAH, a schedule that works for your family, a workload that seems right) it may be worth it not to quit. $4K a year in 401K is nothing to sneeze at, nor is keeping a foot in the professional world. In 35 years that money will have grown exponentially. I look at it as an insurance policy.

[jindc]

With the cost of childcare in DC (I live in the city), there's minimal reason for me, economically, to keep my job. However, my child needing day care is not a long term situation. I worry about my long-term employment prospects if I leave the work force for a while. So, we'll deal with it.

If you WANT to stay home, that's a different story. I'd probably like to stay home (but, I don't really find value in my job)...but I'm the main breadwinner and never having that income would be a hit now, and in the future (including retirement). So I'll stick it out the best I can when the DC arrives. But I definitely think if you WANT to stay home and it can work, financially, then there's your answer.

[Anonymous]

I seriously do not mean to be snarky but I feel very strongly that child care costs should not be "charged" or "counted" against the mom's salary. I assume you have a career that you have worked on and are proud of. (You work at a company that provides a 401k match, which is pretty rare these days).

You cannot just look at the costs right now. What about the years in lost seniority, lost retirement, hit to your career?

Of course, if you want to SAH, you should make that choice. But don't do any false calculations of "cost of daycare" vs "my take-home pay right now."

Never in our conversations have DH and I "counted" daycare against my salary. It's a household cost, same as the mortgage and whatever other joint expenses.

[Anonymous]

Anonymous wrote:I seriously do not mean to be snarky but I feel very strongly that child care costs should not be "charged" or "counted" against the mom's salary. I assume you have a career that you have worked on and are proud of. (You work at a company that provides a 401k match, which is pretty rare these days).

You cannot just look at the costs right now. What about the years in lost seniority, lost retirement, hit to your career?

Of course, if you want to SAH, you should make that choice. But don't do any false calculations of "cost of daycare" vs "my take-home pay right now."

Never in our conversations have DH and I "counted" daycare against my salary. It's a household cost, same as the mortgage and whatever other joint expenses.

Hooray! Exactly.

[Anonymous]

The only reason why I'd work is because I enjoyed working. When we looked at the costs like you did, it didn't pay for me to work and I did not like my job. That little bit of extra money did not make a difference in our daily lives but the enjoyment of being at home with my child and being able to take care of all the household duties so my husband can come home and enjoy the kids is important. You cannot get those early years back. Those people who went batty were probably batty anyway. Some people love being at home and some love working. Do what is best for you. I did not think I'd like and and ended up loving it.

[Anonymous]

OP - I'm thinking about that $16.5K and wondering how you guys are doing on saving for college?

[Anonymous]

Anonymous wrote:I seriously do not mean to be snarky but I feel very strongly that child care costs should not be "charged" or "counted" against the mom's salary. I assume you have a career that you have worked on and are proud of. (You work at a company that provides a 401k match, which is pretty rare these days).

You cannot just look at the costs right now. What about the years in lost seniority, lost retirement, hit to your career?

Of course, if you want to SAH, you should make that choice. But don't do any false calculations of "cost of daycare" vs "my take-home pay right now."

Never in our conversations have DH and I "counted" daycare against my salary. It's a household cost, same as the mortgage and whatever other joint expenses.

In our house we counted daycare aginst me because I was the one who would have stayed home. DH makes 4x what I do and we could not survived on my job alone so if a spouce was stating home it was me. In our case it made since to run the numbers (daycare cost vs my take home pay) to see what worked best for our family.

[Anonymous]

Anonymous wrote:So my husband and I crunched some numbers last night.

Assuming that I find home daycare in North Arlington for $325/week, I will make about $16,500 take home pay at my current job. This includes all the tax changes that will occur and health benefits. It does not include my company's 401K matching. I'm guessing that might be a 4K/year benefit.

I worry about:
1. relying on one income, even though DH's job is very stable and company is well managed
2. not being able to get back in the work force if I want/need to - and if i do, having a worse job than i do now(I'm 29.) Current job is fine, not great, not bad - just a good job.
3. going nuts being at home 24/7 talking baby talk (i know a few batty SAHMs)
4. All the things I should be worrying about but I can think about right now.

Financially we would be okay, though our retirement savings would decrease.

My husband and I are trying to make the same decision right now. I am pregnant with my second and working full time, but I'm not sure I will continue to do so after this one is born. My plan is that I will take my maternity leave (4 months) and come back to work to see if it works for our family. I would like to try to balance two kids plus work before I decide if I want to be a SAHM. If I feel overwhelmed or unhappy I am ready to quit my job.

Are you pregnant with your first child right now? If so, is it possible for you to go back to work after maternity leave to figure out if it works for your family? I don't think there is a right answer to these type of situations. No matter what you decide its perfectly normal to wonder what it would be like if you made a different decision.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I seriously do not mean to be snarky but I feel very strongly that child care costs should not be "charged" or "counted" against the mom's salary. I assume you have a career that you have worked on and are proud of. (You work at a company that provides a 401k match, which is pretty rare these days).

You cannot just look at the costs right now. What about the years in lost seniority, lost retirement, hit to your career?

Of course, if you want to SAH, you should make that choice. But don't do any false calculations of "cost of daycare" vs "my take-home pay right now."

Never in our conversations have DH and I "counted" daycare against my salary. It's a household cost, same as the mortgage and whatever other joint expenses.

In our house we counted daycare aginst me because I was the one who would have stayed home. DH makes 4x what I do and we could not survived on my job alone so if a spouce was stating home it was me. In our case it made since to run the numbers (daycare cost vs my take home pay) to see what worked best for our family.

PP here. Of course you should do what makes sense for your family. But in my view, you should start the conversation with whether you WANT to stay at home or not. If you do, then run the numbers and see if it works or not. However, if you do want to keep working, then you should not think of child care as only your expense.

I was just talking to someone about this very issue. She and her DH both have advanced degrees that they have both worked YEARS to get. They are having a baby and she was lamenting the high cost of child care, and how it meant she was really taking home very little money. I told her to stop having that mindset, and that child care is a joint cost particularly if you never had any intention of staying home.

[Anonymous]

There are many intangible benefits (and drawbacks!) to staying home with your kids, you just can't make it about numbers. Many people take a huge loss to stay at home.

Staying home with your kids can be one of the best things you can ever do for your children, esp in the early years when forming emotional bonds are the foundation to feeling secure in life. It's controversial to say, but in my opinion the care the love that parents give is going to be better, in most (but maybe not all) cases compared to what you will get from a nanny or daycare. This comes from years of playground observation. So think about whether you want your child to spend their waking hours being cared for by someone other than you.