Wednesday, May 8, 2013

Child Care vs. Staying Home

We've been talking child care vs. staying home over here. Having both come from completely different backgrounds, we've had some serious debates on the subject and thankfully have been able to come to some agreement. However, things are still seriously up in the air on the actual outcome, and what will truly happen once baby girl arrives. Let me give you a little background first......

My mom stayed home with my sisters and I until I was about 12 years old. Hubby's mom worked full time while he was being cared for lovingly at an in home day care. After much discussion, both hubby and I agree that an ideal situation would be for me to work part time, mostly from home. One the days that I would need to be in the office, we hope to have a family member or a trusted in home day care, watch after our little one.

But this post isn't really about our choices. Instead, I want to talk about how ridiculous child care costs are, along with health insurance. I thankfully have great health insurance coverage at my current job. Although it's a high deductible ($2k per family member, max of $4k) my company pays $2500 of the full family deductible, only leaving us with $1500 for the year, which will be applied at baby girl's birth. Sigh. The biweekly premium is currently $300 as well. Hubby's insurance, isn't so great. So our plan is to maintain my insurance coverage.

On top of the increased premium costs and deductible costs, we're also looking at paying for child care. Which for those of you who have done your research, can cost about the same as a mortgage each year. Unless of course you are lucky enough to have a family member or friend in the area that has offered to watch your little one for free. That of course changes everything. But let's be realistic, and assume that most couples require both incomes, and have to pay for health insurance and child care.

To paint you a clear picture of things, I did out some generic numbers based on a working momma making $50k per year with a family income putting them in the 25% tax bracket, just to show you the breakdown of costs. Assume the monthly health insurance premium is $650. And assume childcare is $10hr. (low balling, I know)

Full Time Breakdown

Annual Salary: $50,000
Monthly Salary: $4166
Health Ins: $650
Taxable Income: $3516
Taxes at 25%: $879
Take Home Pay: $2637
Child Care: $1733 (40 hrs)
Actual Take Home: $904

Part Time Breakdown

Annual Salary: $25,000
Monthly Salary: $2083
Health Ins: $650
Taxable Income: $1433
Taxes at 25%: $358
Take Home Pay: $1075
Child Care: $866 (20 hrs)
Actual Take Home: $209!!!!!

Someone, please tell me these numbers are wrong! Because when I did them out, I thought to myself "How the hell does one go back to work part time to only bring home $209 a month!" I realize $904 does jump up, and for most people that could make a big difference in there monthly bills. I understand some women prefer to work, and I am in no way making any judgments on them. We all need to preserve our sanity. And some families really rely on that great health insurance coverage, so that makes sense as well. But based on our own finances, and what my current salary is, it does not make any sense for me to work full time.

Which then brings us to the topic of staying home. Granted with our current situation, (hubby working full time & part time consulting) my salary is not necessary to pay our bills, have our usual spending money, and save. (It has however allowed us to save a decent amount for a house, and maternity leave, which is pretty much unpaid.) But I love my husband, and hate that he works a full day, then comes home to dinner, then immediately starts working again. Along with having work to do on most weekends. It's not something that I want him to continue, especially when our little one arrives. So what does that leave? Not a whole lot of choices.

So how do you ladies, that are stay at home moms, do it? 

I truly love any and all input you have. Feel free to email me or private message me as well. Because based on numbers like above, I don't see myself enticed to go back to work. So making it possible to stay home, needs a little finessing still.

1 comment:

  1. For me, I prefer sending out my child to preschool center and getting a baby-sitter or home based-education. The learning progress of a child is more effective if the child could mingle on her peers. Also, getting out of comfort zone will do more learning than being stuck at home.