How to Assess Whether the Cost of Child Care Is Worth Your Salary

02 - how to assess if daycare fits your salary

Childcare is expensive and will continue to get more expensive. For instance, in 2015, the average Maine household with two parents and two children spent more than 12% of their yearly income on daycare. The same family may anticipate spending about 7% of their yearly income for childcare, even in states like Louisiana that have lower childcare costs.

Given those staggering numbers, it makes sense that after years of steady decline, the proportion of stay-at-home moms is rising. You’re definitely not alone if your family is debating whether to work or stay at home. And having this talk might be challenging.

There are other considerations besides financial gain when deciding whether to work full-time or stay at home full-time. Here, too, lifestyle, social, and emotional aspects are involved. After examining each of these aspects, let’s look at some strategies for balancing parenthood, whether you choose to work or stay at home.

The Bottom Line: Does the Cost of Childcare Make Sense?

There are many tiny “rules of thumb” in the personal financial realm to help you make decisions. These guidelines aren’t strict and should always be reviewed in the context of your unique circumstances. However, they can be useful, particularly when you’re first starting to consider major decisions like how much housing you can afford, what kind of car to buy, or if you should work full-time or remain at home.

Regretfully, there isn’t a gold standard for deciding whether to work or stay at home. However, this Childcare Aware of America tool can be a useful starting point. Each state’s average cost of daycare is examined using the tool.

So let’s start this money talk with our fundamental guideline: It’s time to give staying at home some serious thought if the childcare you feel most comfortable with will take up a larger portion of your salary than is typical for your state.

It’s generally advisable to limit your daycare expenses to 10% of your household’s yearly income or less. And this ought to be the price you really pay for the kind of care that most suits your needs.

While in-home daycares can provide comparable costs, childcare centers are typically the most cheap option. One-on-one care solutions, such as nannies, are frequently far more expensive.

On the other hand, some parents feel more at ease leaving their child in an environment where the child-to-caregiver ratio is exceptionally low, such as with a nanny. Make your calculations based on this kind of treatment if your family falls into this category.

For more information, contact Paramus Daycare & Preschool

Another word of caution: depending on your situation, 10% of your income can really be too much to spend on child care. Take into consideration your alternative possibilities if you look at your budget and realize that you could not possibly afford the less costly daycare center with it as it stands.

Career-Related Issues

During this discussion, it’s simple to concentrate solely on the immediate financial effects of working or staying at home. This is particularly valid if your career is still in its infancy.

Assume you have just graduated from college and have taken a job offering a salary of $35,000. Whether it was planned or not, when you become a mother, taking care of your child full-time takes up over half of your yearly income.

If your spouse doesn’t make a lot of money, you can defy the 10% rule.

However, what if you have a strong probability of receiving a significant promotion in the next year or two? In this situation, it can be worthwhile for you to put in more money to ensure the next professional step. It’s true that your child will spend the first several years of their existence eating grains and beans. But after that, you might find that your financial situation improves and you won’t have to worry about your work declining.

Considering career regression, this is an additional factor to take into account. Whether you’re a parent or not, taking time off from work to spend all of your time at home might have repercussions for your career. It can be challenging to return to the workforce after even brief absences of two to five years, and you can find yourself in a reduced professional standing when you do so.

Making the most of your time at home is the best approach to lessen the effects of temporarily quitting the profession. These days, a lot of young professionals space out their childbearing by one to two years. After that, parents can remain at home with their youngest child till preschool age without taking a longer break from work than five to seven years.

Naturally, you can also lessen the likelihood of a career relapse by keeping up your professional abilities, taking part-time jobs, and expanding your network while you’re a stay-at-home parent. We’ll discuss each of these tactics shortly.

Considering Social and Emotional Factors

This discussion, like most others involving money, is as much about how you feel as it is about the specifics of your spending plan. Furthermore, these factors can be taken into account in both directions. However, depending on a number of conditions, mom or dad will typically feel emotionally drawn in one direction or the other.

As a warning, until your child actually arrives, you might not comprehend the intense desire to stay at home with them. It’s common for mothers in particular to wait until the last minute to determine whether to go back to work before deciding to stay at home.

What if you feel emotionally, socially, or religiously compelled to remain at home with your child or children? It’s best to attempt to make staying at home work in this situation. Perhaps that means working part-time on the weekends or dedicating a lot of time to cutting the budget.

It’s frequently possible to live on one salary more than you might assume. If at all feasible, listening to your heart can lead to better outcomes for the kids as well as the parents.

However, what if you’re a driven individual with a dream job who adores being a parent but finds it impossible to dedicate all of your time to your family? In this situation, working full-time will probably benefit you emotionally, even if daycare costs take up a sizable amount of your income.

Lifestyle Factors in Mind

What kind of lifestyle do you envision yourself leading? Will having two full-time working spouses make you more stressed? Or will tension arise from the strain of making ends meet on a meager single income? How about your time, too? Which would you rather have: the freedom to spend any old day at the zoo, or a fulfilling career that still lets you spend time with your family?

All of these should be taken into account during this discussion. It’s also crucial to keep in mind that your tastes could alter.

For example, all of us in my family have full-time employment, but we also have a considerable deal of flexibility. Hence, we enjoy our nights and weekends together, and we don’t find it stressful to take sick days. Sometimes, we even get to go on school field trips.

Because our daughter attends daycare full-time and has flexibility, this is also easy. I can easily take her out of daycare for some quality time if I happen to have a random day off. On the plus side, we don’t have to worry about school breaks because daycare is available whenever I work.

Our two regular full-time jobs are doing great for the time being. However, once our kids start school, things might be different. Then, we’ll have to manage less flexible schedules, shorter class periods, and school breaks. At that moment, we might reconsider the “normal” work schedule in favor of one parent working from home or part-time for greater flexibility.

However, other parents would rather spend more time at home and with their young children. It really comes down to personal tastes, and it will also depend on the kinds of employment that each parent holds.

However, bear in mind that your schedules will have an impact on your desired lifestyle and your family’s life as well.

Remember to include money concerns in that lifestyle discussion as well. Two incomes can be required if you want to accomplish other significant financial goals, such as saving for college and retirement, going on regular holidays, or traveling abroad. You might be content living as a single-income household if you don’t mind leading a simpler, more economical lifestyle.

Getting By on Two Incomes

So, if you choose to have both parents work full-time, how can you make it work? It might be difficult to afford full-time daycare for only one child. It becomes considerably more taxing to add a second or even third to the mix.

Fortunately, there are a few strategies you can use to make being a working parent work for you, like:

  • Choose daycare located in a center. The most cost-effective choice is either a center-based daycare or a home daycare, both of which provide good programming and kind staff. Examine church-based choices, which are typically considerably less expensive, if you want to save even more money.
  • Get a nanny share, please. Reduce your costs by splitting the cost with a friend or neighbor if you’re only comfortable with the more personal choice of a nanny.
  • Different timetables for work. If possible, think about splitting up your workweek between both partners so that you only have to pay for three days of daycare each week. Alternately, work different shifts to reduce the amount of time you need daycare each day. This can save childcare money while enabling you both to continue working, but it can also be stressful and lead to less family time.
  • Benefit from sibling discounts. Do you anticipate having more than one child? If you have numerous children at the same place, many childcare centers and even home daycares provide discounts, so think about having them close enough to attend at the same time.
  • As an alternative, decide to give siblings more time apart. Another option is to space out your children so that your first child enters kindergarten before you have another, if the expense of two children attending daycare full-time is too much for you. Your kindergartener may still require after-school care, but that’s a very different situation from full-time daycare for a preschooler or toddler!
  • Hold on tight. Stay strong if you’ve determined that working two full-time jobs is the best option for you despite the fact that daycare is eating up a sizable portion of your cash. Remember that daycare costs are something that will eventually come to an end. Make ends meet by cutting where you can in your budget, and remember that you’ll be able to free up funds for other things once this budget line item is completed in a few years.

Getting By on Just One Income

What happens if you find yourself drawn to becoming a stay-at-home parent? What if the cost of childcare exceeded 10% of your household’s overall income? Here are some pointers to help you get through the years of surviving off of one salary in this situation:

  • Determine how to spend less money. There are a ton of fantastic frugal living tips available online, such as how to cut costs on groceries, lodging, clothes, and other expenses. Finding ways to save costs might become a part-time job for the stay-at-home parent.
  • Work from home or part-time. Today’s stay-at-home parents are discovering that having a part-time job connects them to the outside world, which is beneficial. Plus, it generates additional revenue. If you need extra cash while the kids are napping or otherwise engaged, you might also think about starting your own business or working from home.
  • Maintain your proficiency. Spend some time maintaining your relationships and skill set if you intend to return to the workforce as soon as your youngest child enters school. If you can afford it, consider attending graduate school or taking a free online course. To keep up with the most recent news in the sector, make a conscious effort to schedule coffee and lunch encounters with former coworkers. A subscriber should also join email lists and industry magazines. When you’re ready to return to work, all of these things will make it simpler to get back into the swing of things.

Whether you’re a working parent in a two-income household, a stay-at-home parent, or a single parent, raising small children is not easy. However, there are substantial financial and personal costs associated with both remaining at home full-time and paying for childcare. Whatever your choose, just remember that you’re a terrific parent and make sure you consider all the options. Reevaluate as necessary.



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