There you are, floating in the tender postpartum world of baby smells and tiny
jiggly thighs. How could you possibly return to work after a mere 12 weeks?
"Maybe we can manage," you think, pointing out that there won't be much left of
your salary after child-care expenses. Think of all you'd save on eating out and
dry cleaning!
Then you find the justification for handing in your notice: a Web site
that calculates how much your family will save if you stay home. Plug in a few
numbers and presto, you're going to come out ahead once you stop paying for that
extra car, that expensive vacation, the take-out pizza after a long workday.
But the bottom line, when you really crunch the numbers, isn't that simple. If you want to quit your job, more power
to you -- but don't do it thinking you're going to be all the richer. It hurts
family finances when one spouse quits working, and I'll tell you why.
First of all, let's admit that
quizzes have a political, not financial,
agenda. I have a political agenda, too. I run a mailing list for working mothers
and believe that every parent who works should live guilt-free. I
take issue with this quiz's claim that "most kids under the age of 6 want to
be with their moms, and most moms want to be with their kids." What about dad?
Furthermore, dozens of moms on my mailing list make anywhere from slightly more to three
times their husband's salaries, which in some cases are so pitifully small that
one mom says, "I've never had to live alone on what my husband makes. My
starting salary, nine years ago, was more."
But let's put politics aside and deconstruct the work vs.
stay-home equation under a strictly financial microscope. I'm also a business
writer and so I'll look at the numbers assuming that it's OK for either mom
or dad, whoever earns less, to stay home.
Plug in the lower salary, deduct all those pesky work-related expenses, then
see how pitifully little is left: It's a pretty simple analysis. The problem is
that the actual benefits and expenses of this equation are neither simple nor
can they always be boiled down to hard numbers.
First, obviously, deduct those outrageous child-care expenses since the tot will
be at home all day. But wait -- this isn't a clean subtraction. If you think it's
just going to be you and the kid in the house all day, you're cruising for a
nervous breakdown. Add back the cost of Gymboree, music class, swim lessons,
all those events for which every single stay-home parent I know signs up. Add
the cost of visiting museums and play centers and snacks for the playground each
week.
OK, maybe you won't save all that much on child care. But you're really going
to rake it in when you stop commuting, right? Wrong. Factor in driving the kid
to all of those events. Add a few of those trips to nowhere, the drives to get
everyone out of the house. Include the cost of driving around for
errand-running during the day (which a stay-home parent can be logically expected to
shoulder more of), making a special fuel-wasting trip to pick up paint,
dry-cleaning or groceries instead of letting the working spouse do it on the
way home.
Both this quiz and the one at Parents Place
mention that stay-home spouses save money on clothing, which is a bit of a
mystery to me. When I quit my office job to work at home, I started
buying different clothes -- casual ones, since I'm not seeing any clients -- but they
aren't any cheaper. My husband's suits do cost more than his khakis, but the
suits last longer, so they factor out to be about the same yearly expense. A parent has to get dressed every day no matter where he or she
is going, and shoes, shirts and pants ultimately cost the same to buy and wash no matter
where they're being worn.
Wearing a suit and pressed shirt every day does cost my husband $30 each month
in dry cleaning, so perhaps that's the big savings here.
The last quiz category is food. Theoretically, a parent who stays at home will
save on eating out. If you buy lunch every day at work, this is probably true.
But if you take your lunch, as I did, your costs remain the same. If the kid(s)
eat lunch and snacks at day care, your grocery costs will increase when they
start eating at home. If you, as I did, take lunch to work a few days each week, eat out
a few days, then quit working and start eating lunch with friends just to get
out of the house, it's a wash.
Cutting back on take-out and restaurants might save a little money. What harried
two-career couple doesn't order pizza or Chinese food at least one night a week?
But then again, what harried stay-home parent doesn't long for a night off from cook duty?
For us, eating out is also a wash.
OK, now that we've looked at the "savings," let's look at the increased
expenses when one spouse quits working -- costs that employers pay now but you
will have to when unemployed, such as medical care. If the working spouse has insurance coverage, no
problem. But what about health, disability and life insurance on the
non-working spouse? The risk of losing the primary caregiver is certainly one
worth insuring against. Also consider increased utility bills once someone is
in the house from 9-5, using water and electricity. Factor in a little extra
for more toys, once the children won't be using the day-care center's paints,
crayons and climbing structure. And add more for groceries, if food and diaper
expenses are included in the day-care bill.
The last areas to examine are impossible to define with numbers. There's the
increased risk of a ruinous work layoff, since only one spouse is employed, and
the stress on a spouse who can't quit a hated job. There's the difficulty of
saving for college or retirement, based on one of my favorite little accounting
principles, called "present value of money." It simply means that $100 in your pocket today is worth more than $100 a year later.
That's because money invested today starts earning interest right away, so in a
year the $100 might be worth $130. Two parents earning can
save more than just one; that money grows much faster (as the interest combines
with the principal and earns even more interest) than money put away years
later. So even if you tell yourself that you'll rejoin the job market in five
years, that's five years of lost principle and interest.
A parent who quits
working for any significant time loses immeasurable value in job skills and potential earnings. Say you
earn $48,000 as a human resource specialist. Five years later, who do you think
will get a better job offer: you, or the applicant who spent those five years
managing a staff? Not only have you lost years of income, but you're probably
pulling down $12,000 less than you would have if you'd worked during that time.
I'm not saying to keep working -- that's up to you. Maybe your spouse makes an
outrageous amount of money and your income potential is so pitifully low that
you'd rather not bother. Maybe your spouse works insane hours and you need to
stay home to provide stability. Maybe you just feel strongly that it's worth
the financial trade-off to spend all day with your children. But just be aware
that it's exactly that -- a trade-off. The money you give up today may cost you once
those kids grow up.
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