I talked recently about my sister who is a single mum making a low wage, and would be making more Money, or at least have more disposable income if she were to stay at home, take care of her kid, and receive a check from the French government every month. While I admire her courage to keep working, I think that is due mainly to the fact that she hasn’t run the number properly, and is not aware of the full picture. Of course, it would not be fun to take the kid to subsidized supermarket and shop for heavily discounted groceries while the cashier looks at you with pity in her eyes. But she would have free access to the swimming pool, tennis court, tons of museums and other fun things for her daughter as well.
That said, she decides to stay at her current job, which is very brave of her. But I often cringe when people tell me how much they make, then brag about how good of a salary that is, and are not able to open their eyes about the real money that comes into their pocket each month.
Daycare
Every day, my sister drops her daughter at daycare so she can go to work. For most workers, that is one of the biggest expense of having a second working spouse. My sister pays around $500 per month, but she makes less than $2,000 so that is a huge chunk of her income. She works 4 days a week so she can avoid daycare on the fifth day, but that is not a big savings. In some big cities, daycare can cost over $1,000 a month so you really have to make a decent living for it to be worth it. I value my time a lot and if I had kids I think I would want to stay home and see them grow but that is a personal choice. I am simply suggesting that this is a cost you should deduce from your salary to see if the job offer is really worth it.
Car and maintenance
If you have bought a car because you needed one to get a job, go dig out your statement and write down how much money goes to paying back your car every month. Maybe you got bad credit car finance from Money Barn, or maybe your parents helped you out and you still owe them part of the car, the thing is you are paying all that money to go to work. Let’s take an example, if you took a $2,000 job half an hour from home and need a $500 car loan to get there, you could have accepted that $1,400 job one block away and walked to it. Because on top of your car, you are also paying for insurance, gas, maintenance, and every single month, your car depreciates a bit more. I am not even considering the time you are spending driving back and forth every day. For my sister, that means extra daycare time, that she has to pay for.
Convenience
Because you are so tired when you get home, you probably won’t have time for proper cooking, a fresh load of laundry and taking care of your kids, all at the same time. That pizza night? $20 off your paycheck. Dry cleaning? Here is another $50. Would you dry clean if you worked a simpler job anyway? You may be buying ready meals, or in a less obvious way ready washed and chopped vegetables, simpler cuts of meat, all that is more expensive and you are buying it because you lack the time to do things yourself. You may have a cleaning lady too, or need a baby sitter once a week so you can relax and have a night to yourself.
Sometimes, because it advances your career, because it builds your CV, because you may improve and evolve well at your dream company, taking a low paying job can be worth it. But before you accept any offer, be sure to consider the hidden costs and your real salary.
There are definitely things that are not considered when you have a job. Expenses such as daycare, maintaining a car, and other expenses that come with having a job definitely add up. One thing people also do not think about, though, are the perks. Having paid time off, a 401k match, stock purchase plan, etc. all add to your overall salary and I think freelancers and people who do not work for a company do not factor these things in.
Daycare can take a huge chunk out of your paycheck around here as well. A lot of the centers I looked at in our new town were as much as $200-$225 per week….per kid! Fortunately, we found in in-home daycare that is $75 per week per kid.
Pauline, this is just one of the reasons we decided after my job layoff in 2003 that I would stay home with the kids. We spent SO much less money with me home, and I got to be with the kids – bonus! People really don’t take into account how very much their jobs can cost them sometimes.
I don’t have kids so can’t run exact numbers but would love to see how much a real family truly saves. For most entry level salaries it doesn’t make a lot of sense to have the second spouse work.
I can attest to the cost of daycare. We pay close to $1000 to have both of us work. We can afford it and I have run the numbers, but when we have a second child, my wife has already agreed to stop working. She would be working just to pay for daycare.
I have friends who are holding on having a second kid because they can’t afford daycare, so they wait until the first one goes to school to get a second one. That is sad and in aging countries the state should do anything to have you get more kids, including subsidized daycare.
It really does not pay if you earn a low wage and need full time daycare. I can see why people would just stay home and take the check. 25% of your income for childcare is a huge hit.
Love this! I think people sometimes jump into a new job or opportunity before fully assessing all of the associated costs. A great reminder to look at the entire, bigger picture before making large changes.
The only thing I’d say in your sister’s defense is she probably wants to feel like she is contributing to society instead of taking away from it. I would say overall it’s a very tough situation to be in. Its too bad there isn’t a family member to help take care of her daughter while she is at work. That would certainly help a lot. As far as everything else I think anyone can work around it. But then again, I don’t have kids and I’m sure it’s exhausting. I think it’s a tough call.
The daughter just started school this year so it is a bit less expensive, but she still need after school care. Maybe in a couple of years when my mum retires she can pick her up after school.
As I’m staying with my parents till we find a place to rent, I definitely notice how much more time I have after work since I’m not doing the cooking (my dad works from home and my brother is on school holidays). Hoping to move ASAP but it will be a lot more work taking full care of ourselves!
I realized this shortly, we are working hard to make money in order to pay bill. We are working to pay the petrol, to pay the rent and to spend for decent clothes.
I know in our family, she is working and her income is less than how much she spends for transportation and lunch pack.
I thought about the idea of getting back to a job (should it provide at least the income I make by working from home) and I’d have to earn at least 50% more to make it work. Not working from home would mean more expenses:
1. daycare – will have a baby in 3 months, someone needs to care for her
2. transportation
3. food (won’t be able to eat at home)
4. clothing (can’t go in my house clothing)
5. time wasted commuting etc.
I’d say she can ‘skip’ the job part and really take care of the kid 🙂
I forgot to add when you have to chip in for your colleagues’ 5k runs of for their kids’ lottery tickets. I hated that when I worked an office job.
I also find that people fail to consider their commute times, especially for short term/hourly work. For example, babysitting or personal training. It’s not worth it for me to commute an hour each way if I’m only working (and being paid for) one or two hours. Sometimes, I’ll institute a four hour minimum when I babysit to make the trip worthwhile.
that is a good idea, I worked at McD and we were guaranteed minimum 4 hour shifts as well.
I have no doubt that daycare is a huge money pit. However, many people want to work. Even if it was incredibly expensive to put our kid in daycare, I am one of those people that would need to get out of the house. I think my fiance is too.Not that stay at home parenting isn’t difficult, it’s just different from working outside of the home. Going to work can cost a lot so it’s important to ensure that it’s worth it!
I would love to not work but that just isn’t an option for me even though I make a pretty low wage. I don’t have any children and no welfare is available to me. But if I did have children the chance to spend more time with them and make more money I would take up that chance in a heartbeat.
I think it is necessary that someone weighs the benefits of the current job before thinking of leaving for other options. Stay at home activities are great and it is never bad to measure how long and may take before you are in position to stand and meet your expenses