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I pay an exorbitant amount for childcare every month. What’s a good way to evaluate whether it’s more cost-efficient for me to be a stay-at-home mom versus working?


You should start by calculating the net earnings from your job. To do this, take your gross pay and then deduct federal and state income tax. Don’t do it at the average tax rates that you and your husband pay but at the marginal rates, assuming you file a joint return. Say your husband earns $60,000 and you earn $40,000 and the various deductions and exemptions work out to $20,000. If you quit your job, your combined taxable income would be cut in half, from $80,000 to $40,000. Using 2013 tax tables, your combined federal and Vermont liability would fall from $15,324 to $6,527, saving you $8,797. You would also not have to pay $3,060 in Social Security and Medicare contributions plus any disability insurance contributions that Vermont might levy.

If you gave up your hypothetical $40,000 job, your family actually would take home about $28,000 less, therefore, but then you also have to factor in the money you would save on transportation, lunches, high-octane quadruple venti lattes and perhaps a fancy wardrobe if you work in the sort of environment that demands one. That could easily knock a further $10,000 a year off your costs and leave you about $18,000 out of pocket. On the other hand, the shortfall could be more if you have to forego a retirement plan at work or health insurance if your husband does not have adequate coverage for both of you.

You said you spend “an exorbitant amount for childcare every month.” I don’t know what’s considered exorbitant in Vermont, but if your earnings and work-related expenses are roughly in line with this example, then you would come out ahead financially if you spend more than $1,500 or so, including Social Security contributions and any meals or transportation costs that you reimburse your childcare worker for. You’ll have to crunch the numbers for yourself based on your own circumstances, but if your situation is anything like that of the average American, then it doesn’t sound as though you would be giving up much, if anything, financially to be a stay-at-home mom. You also might come out way ahead emotionally, too.

-Conrad de Aenlle