I had an interesting talk with my sister last time I visited, about why she would go back to work now that she has my adorable niece. My sister works in a daycare center, she stays with 10 kids who aren’t hers all day, then comes back home and does more of the same. The local law says she can’t have her daughter attend the daycare so she leaves early, drops the kid off with another nanny and picks her up after daycare. I told her she should be a stay at home nanny, take two or three other kids in, which would be easy since she is already in the business and all her friends have kids the same age, then she could take care of her own child too. Her answer was she needed to keep her sanity and that meant going out of the house and working somewhere else.
I get that, she is an independent woman, wants to feel like she is contributing something to the household, and making a difference at the daycare as well as taking a breath away from her daughter 8 hours a day.
She makes about $1,800 net, which is not huge but reasonable for this type of work..
Let’s see what she spends on to go to work.
Daycare $600. Yep, 1/3 of her salary goes to another nanny.
Second car $250. Assuming general maintenance for an old car they wouldn’t need if she didn’t work, insurance on the car, and $50 gas per month.
Taxes $180. This is the tax on her bracket, she would pay about 10% taxes.
Husband taxes $200 Because her husband makes more money, if she didn’t work they would get a tax rebate on his income. Not only she pays taxes on her salary but she increases the household’s tax bracket. That is probably the last thing people think about when they go back to work.
Clothes $50. She doesn’t spend much on clothing but needs to be presentable at work.
Convenience food $100. Because she works, she is tired when she comes home and doesn’t cook from scratch every day. Lots of frozen meals and a bigger grocery bill.
Misc $20. There is always a colleague’s birthday, or collect for a baby shower, or something where she would end up pitching in. Sometimes they go out to lunch too.
Sick days $50. At least once a month, my niece would be sick, or need some special care, and the nanny wouldn’t take her in. My sister can’t go to work and loses money. She still gets to pay the nanny when that happens!
My sister makes $350 at her full time job.
You could factor many other things to calculate how much you really make by going back to work.
Do you stop for coffee on the way? Add $100/ month.
Need a train or bus card?
Do you have a cleaner because you are both so busy?
If you stayed at home you would maybe make your husband a lunchbox, but now he gets to eat out? Add his lunches’ price.
If you stayed at home, you would have time to be awesome at optimizing the household’s finances, finding deals, maybe even clipping coupons? Add the price of convenience.
I would stay at home, $350 is no fair compensation to spend the day away from your child.
My sister is different, having a job makes her happy and like I explained in this post about money and values, sometimes, it is not just about money.
She is a deeply caring and generous person, who does work for the daycare at home because ‘’we don’t have time during the day so I bring back the admin work here’’ and never gets paid for the extra hours she puts in.
Most importantly, she is aware of the hidden costs of having a job (like convenience or extra taxes) and choses to do so in spite of it. If you are considering going back to work, make sure you factor in all the costs associated, not just daycare.
What would you have done in her case? If you have kids, did you consider all costs before going back to work?
Latest posts by Pauline (Posts)
- The Answers to the Top 5 Most Commonly Asked Questions About Term Insurance - December 6, 2019
- 8 Truths You Should Know About Loans - November 19, 2019
- Travel budget and priorities - October 16, 2019
- What are the best hidden destinations you’ve been to? - October 16, 2019
- How to Turn Your Retirement Time into Money - October 11, 2019