Can You Afford Not To Stay At Home With Your Kids?

We have recently made the adjustment to single-income living after deciding that my wife would become a stay at home mom and look after our daughter.  Was it a difficult choice?  Not really.

While there were many financial implications involved in this decision, the choice ultimately came down to the non-financial benefits that we felt would positively impact our family.

Let’s take a look at some of these financial implications.

Two Income Family or Stay At Home Mom?

  • Loss of Income – As the primary breadwinner, I earned approximately 75% of the household income.  Losing even a quarter of your income could potentially be devastating to your financial plans.  However this was something we felt we could prepare for by adjusting to single income living early and banking my wife’s maternity leave benefits, creating a personal budget, and planning our meals.
  • Day Care – The primary costs involved with going back to work full-time would obviously be child care.  We checked around at various day care facilities in our area, and the monthly cost of full-time child care would run us about $750.
  • Transportation – We would do our best to car pool, but we would at least be faced with an additional $100 in gas each month, especially with these high gas prices.  We currently own a 12-year-old second vehicle that we are driving into the ground, but I wouldn’t trust this car to hold up much longer if we were driving it full time again.  We would need to consider upgrading this vehicle sooner than later.
  • Clothing – Don’t forget about your work attire, which would likely need an overhaul after a year in the closet.  Add another $100/month to help get your spouse’s wardrobe back up to par.
  • Meals – Due to time constraints from both Mom and Dad working, picking up your child from day care, and trying to keep up with the household chores, you may not be faithfully sticking to your meal plan.  Factor in an additional $150/month for dining out, ordering in, and last minute impulse buys from the grocery store.

So financially we were looking at spending about $1100/month for my wife to go back to work rather than become a stay at home mom.  After taxes, she would be earning less than $5/hour.  That didn’t sound very appealing to us.

Plus, I would be able to claim the $10,320 spousal amount, which is a tax credit that can be transferred to the higher earning spouse if the lower earning spouse has little to no income, and the Universal Child Care Benefit of $1,200/year per child can be taxed in the hands of the lower income spouse.

Aside from the money, what we were really concerned about were our family values.  We didn’t want to have someone else raising our daughter during the week.  We heard horror stories about how often kids at day care spread germs and were constantly sick.  And of course we wanted to share in every part of our daughter’s life while she grows up and reaches those early milestones.

It is certainly a personal choice whether you stay at home with your kids or go back to work.  Some women focus on their careers and climbing the corporate ladder, while others dream of being a stay at home mom and raising their family.  And as Boomer described in Boom and Bust, some best laid plans get thrown out the window due to unforeseen circumstances.

The point is, there is nothing wrong with either choice, as long as it’s right for you and your values.

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  1. Andrew Jacobson on September 15, 2010 at 6:52 am

    Great article! As a stay at home dad, I have personally gone through this same mental exercise any time I considered going back to work. Most importantly, though, is the notion that there are always non-financial considerations in decisions like these. Sometimes we get stuck only looking at the financial side of things, when time, health, and our values are all just as important to take into account.

    • Echo on September 15, 2010 at 8:45 am

      Hi Andrew, thanks for your comments. Nice to hear from the perspective of a stay at home dad! At the end of the day, being a two income family and supporting an excessive lifestyle was simply not as important to us. Some couples need to do it, and I respect that…but we were in the position to make a choice, and I think we made the right one for our family.

  2. WealthWebGuru on September 15, 2010 at 9:04 am

    Nice to hear your personal story. Many parents can relate to this but I think the most important thing you said was “Aside from the money, what we were really concerned about were our family values.”

  3. Kim Kelly on September 15, 2010 at 10:01 am

    I have faced the huge challenge of work/life balance for 7 years since my eldest’s birth. If high quality part-time daycare was accessible, it would’ve significantly reduced my challenges.

    I want the best child care for my child. When delivering my own child care, I gain personal growth, self-esteem, satisfaction of rising to the challenge, and the learning of new skills. As well, I have completed 24 years of education and want the best for myself. I desire the personal growth, self-esteem, satisfaction of rising to the challenge, and use of my trained skills that career brings.

    Ultimately, I feel this issue is about advocating for choice and valuing and validating all choices made.

    • Echo on September 15, 2010 at 8:45 pm

      Hi Kim, thanks for your comment. It’s tough to balance your career with raising a family, so I commend you for taking on the challenge. It’s great to hear that you gain so much satisfaction from both.

  4. Financial Cents on September 15, 2010 at 4:47 pm

    Good post and very much a personal choice, I agree.
    My wife and I don’t have any kids but I know my sister struggled with her decision to go back to work (she has 3 boys under age 4); in the end, for her sanity (not really for the paycheck) she went back. As you say, things change; some of the best laid plans get thrown out the window due to unforeseen circumstances…

    Life has a habit of throwing everyone a curve now and again. You can only make the best choices today forecasting what tomorrow might bring 🙂

  5. Tiny Potato on September 15, 2010 at 7:22 pm

    Thanks for the informative post. I don’t have kids so cannot relate directly, but it’s good to understand the various personal thoughts that people go through – for when my time comes for that decision.

    Some other factors to consider?

    – The intangible social benefits for your wife to return to work – having the chance to socialize with peers, etc.?

    – The impact to her career over the long-term; leaving an industry for several years and returning later, will this impact future earnings?

    That being said, the intangible factors of spending time with the child and raising them is VERY important as well. Also, as you mentioned, it’s not etched in stone that this decision must remain the same forever!

    • Echo on September 15, 2010 at 8:39 pm

      @Tiny Potato
      We definitely considered the social benefits of returning to a work environment, with people constantly telling my wife that she would be bored at home, or in dire need of adult conversation. But there is also a good support network of new mom’s out there, so my wife and daughter keep themselves busy with play dates and different recreation programs.

  6. youngandthrifty on September 15, 2010 at 10:41 pm

    Wow, when you crunched the numbers like that (calculated that if your wife went back to work and you guys hired childcare, she would be making $5 an hour), it really makes you wonder what the heck the point is in working.

    Childcare is so expensive- too bad our government isn’t taking initiatives to make it a bit more affordable so people don’t have to pay an arm and a leg to work.

    Here in BC (not sure if it’s the case in your province) they are moving next year to a model of all day Kindergarten, and they believe this will be beneficial for both the economy and the development of children.

    I’m not a mom but I am amazed at how some of my colleagues are full time employees and also have 3 kids- it takes a lot of organization, that’s for sure.

    • Echo on September 16, 2010 at 9:00 am

      @ youngandthrifty
      All day kindergarden is a great idea. I can’t imagine the schedule juggling and planning that goes into each day when your kids are in school. Half days here, and professional development days there…I wonder how parents manage sometimes.

  7. Arjun @ on September 15, 2010 at 11:18 pm

    Great post. I agree that choosing whether to have a stay-at-home parent or have two working parents is a very personal decision. And there definitely isn’t one ‘right’ way.

  8. Will on September 24, 2010 at 2:56 pm

    I haven’t looked at this subject from this angle before, although it seems like this is something each person would have to decide individually based on their situation. If the spouse brings in enough money, it is possible for them to more than make up for that initial cost of re-entering the workforce.

    On the other hand, it’s certainly hard to put any price on spending quality time with your children. I would worry that the other party might begin to feel resentful that they’re spending their lives at work while you get time with the family, however.

  9. Schultzter on October 5, 2010 at 10:52 am

    I guess I’m lucky to live in Qc – we only pay $7 per day for day care (either up front or when we do our taxes – more or less).

    But really, keeping your kids out of daycare for fear of germs is paranoia! Yes, every September you have runny noses, and there’s a bout of gastro every fall too. But each year it gets easier. By the time they get to elementary school they’ll be pretty much immune. BUT if they only get their first exposure at elementary school then whoa, you better factor in the cost of cold medication, kleenex, and toilet paper – it’s much harder to deal with at that age!!!

    And you still need to get them out to a play group, the park, etc. to socialize at an early age. Imagine what your kids will be like if they get to kindergarten and haven’t dealt with groups before – lots of parent/teacher meetings in your future.

    So ultimately, day care is not a big ball of evil. Leaving your kids there from 7:30am to 6pm is ridiculous. But you can send them there for half days or a few full days a week then you’re doing them a lot of good. And your wife will have time to do the vacuuming, laundry, groceries, etc. so you can enjoy real family activities in the evening and on weekends.

    • Echo on October 5, 2010 at 12:47 pm

      Hi Schultzer, wow $7/day is a pretty good deal. I didn’t mean to sound paranoid of germs…just pointed out that I noticed many kids who go to day care are sick a lot.

      As for integrating our child with a play group, we definitely recognize that social interaction is a positive thing. It’s not like we keep her locked in the house, she has cousins to play with, and my wife knows lots of other moms to hang out with and go to the park, etc.

  10. Rachelle on February 19, 2011 at 9:11 pm

    Well I for one can testify to the truth behind the fact that daycares are a source of numerous infections. My son is cared for by his stay at home dad. Well a while back we were told by the dr to put him in daycare because he lacked socialization. We put him in daycare in January and by my count I have had 6 consecutive colds or flus. I’m one of those people who never get anything and I’ve never been so goddamn sick. My son has been to the hospital twice. Once with a fever of 105 and the other after projectile vomiting seven times in three hours.

    Every single kid all 32 of them have a snotty nose and cough. I had no idea that socializing your kid meant they would go around licking each other and spreading infection all day long. He goes 2 half days per week or just long enough to catch a disease and bring it home to us. Its cost us over $1000 in antibiotics and cold medicines. We’ve all had two rounds of antibiotics. The doc says this is normal when your kid starts daycare.

    • Echo on February 20, 2011 at 12:40 am

      Hi Rachelle, I agree…every kid I know that’s in day care is sick all the time, causing their parents to get sick, or to miss work to stay at home with them.

      If that’s socializing then I’ll be happy if my daughter is a loner.

    • schultzter on February 20, 2011 at 4:08 pm

      They’re going to get sick every September when school starts; and November when the weather gets cold; and February when it’s so frickin’ cold your breath freezes your nostrils shut.

      But if they start getting that exposure at daycare when they’re a year old then by the time they got to elementary school they (and you) won’t even notice they’re sick. If you keep them in a bubble until they’re six years old then they’re coming back from the first day of elementary school looking like a leper!!!

      Their bodies need to build up resistance to all the germs out there. And little bodies are much more effective at producing anti-bodies than old bodies. A couple years makes a real difference.

      So keep your kid home now if you want; but be ready to keep them at home when he’s in school because he’s getting sick all the time when every other kid isn’t – or just shakes it off.

      • Echo on February 21, 2011 at 9:32 pm

        I have a hard time believing that I should put my kid in daycare for the sole purpose of exposing her to germs so she’ll be better off down the road.

        I don’t think that sick infants and toddlers are very fun to deal with, but I wouldn’t know first hand and I’d like to keep it that way.

        It’s not like she’s living in isolation, we go everywhere with her…and kids put their hands and mouths on everything.

        • Denise on November 15, 2011 at 11:22 am

          Stumbled onto this blog today, and I am liking what I read so far. =) Great job.

          I totally agree with you, and I also find it hard to believe that I SHOULD put my kid in daycare, both for socializing and for getting his immunity built up.

          Whether to put your kid into a daycare is a very personal choice, and I don’t think one choice is better or worse than another.

          It all boils down to what works best for you.

          I find it very hard to justify all the misery my son, husband, and I had to go through, in the quest of strengthening his immunity. There are many ways of building immunity. Not washing your hands with antibacterial soap all the time is a good start. 😉

          I’ll pass on daycare for now… I’ll bring him to playgroups, take him to visit his cousins and friends, and just bring him out to people watch. The cost of having a sick kid, and subsequently, sick parents, far outweighs the benefits of socialization and immunity strengthening in a daycare.

  11. The Investment Blogger on February 19, 2011 at 10:48 pm

    Great article! Everyone wants whats best for their child. I think one of the important things that people tend to forget nowadays, is the thing their child needs and wants the most, is to spend time with their parents (especially when they are much younger). Time is money….and when we are old, we would pay anything to spend more time with family and loved ones.

    • Echo on February 20, 2011 at 12:51 am

      That was definitely one of the deciding factors for us. My wife can always decide to go back to work later in life but we will never have these moments with our baby again, and I think we would regret not being there for her (especially in the first few years).

      • The Investment Blogger on February 20, 2011 at 8:13 pm

        Its great that you see it that way. So many people in today’s society don’t. Again, really good article and topic!

  12. Mike Holman on February 21, 2011 at 8:07 pm

    I think the calculation should probably include future loss of income when your wife goes back. Depending on her career, it’s likely that her income when she starts working again will be lower than it would have been, had she only taken one year off.

    Of course that’s very difficult to estimate.

    My wife stayed home with our kids. I can’t say it’s worked out perfectly, but neither choice is perfect.

    When your child is a bit older you might find enrolling her in some sort of part-time daycare/pre-school to be very beneficial for everyone involved.


    • Echo on February 21, 2011 at 9:22 pm

      Good point about including future loss of income due to prolonged absence from the workforce.

      For a variety of reasons my wife will probably not go back to work at all. That may change down the road, but it’s the assumption we’re going on moving forward.

      A couple we know has 2 kids and the mom went back to work right away so the kids went to daycare. No big deal, that happens all the time. Both the mom & dad are teachers, but they keep the kids in daycare even when they are off in the summer.

      Meanwhile they have the biggest house on the block and two fancy cars, along with a time-share condo. They could afford to have just one working parent, but they choose to live a different lifestyle that I would call a bit selfish.

      We definitely recognize the need for our daughter to socialize with play groups, and where I work we have access to all sorts of programs from dance, gymnastics, swimming, and music for her to enjoy.

      • Kristina on March 14, 2011 at 12:51 pm

        Wow – I’m a bit shocked at your rhetoric on the last comment here. To call someone selfish because they (maybe even consciously) chose to have both parents work and enjoy the extra lifestyle benefits that provides them – very clearly outlines your bias on the subject. Just because you can afford to have a parent stay at home doesn not mean you should.
        Now if they are constantly complaining about how they can’t afford to have someone stay home with their children and they’d really love to be able live on one income… then you can roll your eyes and suggest that fewer toys and a simpler life would make that possible – they’ve just chosen not to live that way.

        • Echo on March 14, 2011 at 1:51 pm

          Hi Kristina, thanks for your comments. The ‘selfish’ comment in my view was the fact that this couple chooses to keep their kids in daycare in the summer even though both parents are teachers and are at home.

          I agree that there are plenty of good non-financial reasons to have both parents working.

          • schultzter on March 14, 2011 at 2:19 pm

            Would they loose their spot in the daycare if they took them out for the summer? I know we would! Sure we can go away for summer vacation, but we still have to pay for those weeks, and government has weekly and monthly averages for attendance for a daycare to keep a spot rather than give it to the next person on the list. That might apply to your example family.

          • Echo on March 14, 2011 at 2:31 pm

            This is obviously a very passionate topic! Yes, more than likely they would lose their spot if they took them out for the entire summer. I am not aware of any weekly or monthly attendance mandate by the gov’t though. I will check into that. But even if they have to pay the full rate over the summer (which is likely), wouldn’t you just pay it but keep your kids at home? What’s the difference, you have to pay it anyway and this way you get to see your kids.

          • schultzter on March 14, 2011 at 7:02 pm

            (I think we’ve maxed out the reply tree ‘cuz I can’t reply to your last comment Echo).

            Anyways, the Qc gov’t has a use-it-or-loose-it policy. Even if you pay they figure there’s some one else on the waiting list who would not only pay but actually use the daycare too! Which makes a lot of sense considering there’s a two-year waiting list here (yes, you sign-up your kid before you start trying to have the kid!).

            Obviously each daycare operator has a bit of discretion in how rigidly they report your attendance. But we have to sign a form every month that shows our attendance record and it’s available for auditors if ever there was an issue.

  13. Kristina on March 15, 2011 at 12:55 pm

    Thanks for your reply Echo, I’ve found that when commenting on other people’s parenting choices it’s best to be as non-judgemental as possible.

    There could be dozens of reasons why leaving your kids in daycare over the summer is the best choice for this family. Here’s a few:
    1) There child(ren) may thrive with the structure and schedule of daycare and disrupting it may have highly negative effects. In this case it could be considered “selfish” to take your kids out of daycare, disrupting their schedule just so you can see them more. I know a lot of ADD, ADHD and/or children with disabilities that need their days to be the same.
    2) Or aren’t they lucky that they get the time in the summer to recover from what is likely a fairly hectic two-working parent home during the rest of the year. Their house chores get done, their personal reading lists, they can work on their marriage etc.

    It may not be the best choice for your family, but it could absolutely be the best choice for theirs.

    • Echo on March 15, 2011 at 1:30 pm

      Hi Kristina, as I said in the article, there is nothing wrong with either choice as long as it works for you. I just found that this particular example was a bit odd. They may have perfectly good reasons for doing what they do. In this specific case I would suggest that your 2nd example is the reason they leave their kids in daycare over the summer.

      I’m not in their shoes so perhaps it’s unfair for me to judge, but again I just find it odd. I wonder if there are any teachers out there who can weigh in on this subject?

      • Mike Holman on March 15, 2011 at 2:31 pm

        If I were that couple, I would definitely keep the kids in childcare over the summer.

        Now, I would probably reduce the hours a bit and take days off and maybe a trip or two.

        I like spending time with my kids, but I just wouldn’t want to spend 7×24 with them.

        • Echo on March 15, 2011 at 8:13 pm

          Maybe I’m just weird, but I like being around my kid 😉

  14. Evelyn on November 25, 2011 at 4:02 pm

    My view is that most regulated daycares have caring trained workers who know how to manage and motivate young kids. They have more toys, playground equipment and a whole lot of built in playmates – if someone gets on your nerves you can go play with someone else.

    You get a professional to fix your plumbing and your car, why trust child care to amateurs, no matter how interested they are?

  15. curious on September 16, 2012 at 1:40 am

    So pls let me understand: if my husband stays home and cares for our newborn (I am the primary breadwinner)I will be able to claim that $10k spousal credit for no income, but he will have to claim our income from the UCC?? Any other (more recent) tax breaks I can look forward to with him staying home, especially in these first few years??

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