Would you like to spend more time at home with your family? Are you afraid you'd never be able to afford it? Don't give up yet. A large portion of two parent families who desire to do so, can afford to allow Mom to at stay home. For some families it may be possible by simply cutting back on expenses in some areas. But for most of us, there's little fat in our budget left to trim.
For these families, it's time to see how much difference there is between Mom's take home pay, and what it costs for her to earn that pay.
First, remember to think of what you're earning in terms of net pay. While it's true that some of those deductions may go to fund your future retirement--and that IS important--the truth is, it's the amount that's left over in your net pay that has an immediate impact on your family's budget, and will determine whether you can afford to stay home.
From your net pay you need to make plenty of subtractions to discover what you really "earn." Going to work costs money!
One of the most obvious costs for parents of young children is that of child care. Depending on where you live, the Center for Law and Social Policy (CLASP) estimates that the average cost of child care for a 4 year old ranges from $3,016 to $9,628 per child per year. The cost is even higher for infants. Calculate your family's cost, minus any child care credits you claim on your taxes, and subtract that from your net pay.
Also subtract out any costs associated with child care that you would not have if you stayed home. Include in your total, costs for special foods, entertainment and clothing, duplicate toys, etc., that goes beyond what your child would need at home. Do you have to drive out of your way to drop the kids off. Calculate that cost, too.
Next, is there a vehicle that you could do without if you stayed home? Many families these days own a car for each driver and a separate car or mini van for family use. Eliminate one of these, and at the very least you lessen your insurance, car tag, and maintenance costs for that vehicle. You may also lose a monthly payment as well. Subtract your savings from your net pay.
Now, what does it cost you, personally, to go to work? Does your job require a special wardrobe, special shoes, safety gear, etc.? How much do you spend per year on gasoline or public transportation to get to your job site? Do you eat out, or otherwise pay more for lunch or snacks than you would at home?
Do you pay union dues, regularly buy unnecessary items that coworkers (or their children) are selling? Do you contribute to a slush fund for flowers or gifts for coworkers and bosses? Do you buy special supplies for your job? Do you have any type of education expenses associated with work, but not reimbursed by your employer? Add these up and subtract them from your take home pay, too.
Next, what could you SAVE by staying home? Remember money saved is the same as money earned. Do you buy fast food, bring home a pizza, or go out to a restaurant more often than you'd like, simply because you're too tired, or too short on time to cook? Would this change if you could be at home? Calculate your likely savings. Since this is money you are now spending, deduct it from your net pay.
As a full time Mom, would you be more likely to browse weekly flyers, clip coupons, or comparison shop for a wide variety of items your family purchases? If so, this is extra money that you could be saving. Subtract it from your take home pay.
Are there ways your spouse or other family members would save money by having you at home? Perhaps you'd choose to send your husband with a packed lunch, cut the kids' hair, do your own taxes, plant a vegetable garden, mow your own yard, etc. (Not that you NEED to do all of that, but would you do SOME of it?) If you are currently paying anybody to do anything for you that'd you'd do yourself if you had the time, calculate your potential savings and deduct it from the running total of what you really make.
Consider, too, that there are tax breaks for families with qualifying incomes. It's called the Earned Income Tax Credit (EIC), and was designed to offset a portion of Social Security and Medicare taxes. In 2007, if you had less than $39,783 (for a married couple filing jointly) in income, and had two or more qualifying children, you are eligible for the credit. Those with one qualifying child and income under $33,241 ($35,241 for joint filers) are also eligible. Depending on your income, you could get back up to $4716 for the latest tax year. If working at home as a full time mom would move you to this income bracket, be sure to consider this in your decision making process. You might want to do a search for online calculators that can give you a good idea of how much you can expect to save.
Finally, is there something you'd like to do from home to earn money. Would you provide child care on occassion, give piano lessons, or teach a craft? Estimate the amount. It may not be much, but chances are, it's something. Deduct this too, from your total.
To see how it all works, let's take a hypothetical teacher who's "salary" is $30,000. A worksheet of her real yearly earnings might look like this: (Costs are estimated for the year.)
Net Pay $24,362.00
YEARLY EXPENSES
Non Deductible Cost of Day Care for two children -9, 720.00
Extra Car Payment - 5040.00
Insurance for the extra car - 965.00
Maintenance, tires, car wash, etc. for the extra car - 750.00
Gasoline - 920.00
Lunch - 540.00
Union Dues - 750.00
Purchases from coworkers - 150.00
Slush fund contributions - 75.00
Out of pocket expenses for classroom supplies/materials -750.00
Non reimbursed education expenses - 775.00
Fast food savings (2 meals per week for family) - 1504.00
Savings on convenience foods - 830.00
Savings by couponing, comparison shopping, etc. - 120.00
Savings on clothing, shoes, hosiery, etc. - 850.00
Dry Cleaning - 360.00
Savings on husband's lunch (packs 2 x weekly now) - 325.00
Savings--Enjoys gardening & preserving food - 350.00
Earnings--Babysits two Wednesday Mornings per month - 840.00
______________
TOTAL DEDUCTIONS FROM NET PAY $25, 614.00
Notice that the deductions from net pay are larger than the net pay itself! For this family, Mom could actually save money by staying home. True, the family had to give up a third car, and Mom's retirement contributions are at a stand still until she returns to work, but for Moms who are motivated to do so, staying home and caring for a family has more than enough value in itself to make up for these losses.
Every family is unique. Chances are that yours is already being frugal, and would not save quite as much as our hypothetical teacher did. Still, you might be amazed at how much it really does cost you to go to work. Becoming a "domestic engineer" might be easier than you think!
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