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Question:


Childcare is so expensive. Do you have any tips for evaluating if it’s financially realistic for one parent to stay home versus both parents working?
-MamaGiselle


Answer:


A recent report in the Journal of Financial Planning estimated a mother’s contribution to household duties at just over $60,000 a year. It’s not clear how much of that is mopping the floor and cooking, for instance, and how much is taking care of the children. It’s obvious, though, which of a mother’s duties is the most critical, not necessarily from a financial standpoint but from a social and emotional one.
 
A crude way to calculate the cost of giving up your day job is to take your salary and the value of benefits, including a retirement plan and your health insurance (unless you’re on your husband’s plan), then deduct the work-related expenses you won’t have to dip into your pocket for, such as for commuting, restaurant lunches, work clothes and so forth. Then deduct whatever you’re spending or would spend on childcare. On top of that, each dollar of your husband’s income may be taxed at a lower rate because it’s no longer part of a larger family income. You need to factor that into the equation, too.
 
If the figure you’re left with is negative, you’ll save money. If it’s positive, then you’ll be out of pocket. But then there’s the intangible benefit that comes from caring for your children full time, something that only you can put a value on. Oh, and that journal report estimates the father’s contribution to household duties at a shade north of $20,000, barely one-third of the mother’s.
-Conrad de Aenlle



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