Why It Makes Economic Sense To Stay With The Kids

In uncertain economic times, willingly dropping an income won’t make sense to a lot of people. Deciding to leave a stable job when people are losing employment or can’t seem to find work seems wrong in a way.

But it can be very right for a family looking to add an element of financial stability while also making sure someone they trust cares for their kids. A father deciding to stay with the children during the day is a move more and more families are making.

It can make economic sense.

Childcare

Sure, there will be challenges adjusting to one income. Budgets will need to be followed and cuts in how much is spent on services here or there may need to be made. The flow of money coming in will be less, but the flow of money going out should also be less.

One of the biggest expenses a family has – if not the biggest – outside of housing is probably childcare. It can cost a small fortune to keep a couple of kids in a daycare center.

According to the National Association of Child Care Resource & Referral Agencies’ (NACCRRA) 2008 report on childcare costs, the cost of full-time care for an infant, typically less than a year old, was as high as $14,591 last year. The cost for a 4-year-old was up to $10,787 and part-time care for a school-aged child was as high as $8,600.

A family with one child in all three of those categories is spending a what amounts to a decent salary for a lot of people. After taxes, a baby alone could eat up more than half of someone’s paycheck.

And the small childcare tax break you get from the IRS probably isn’t much relief.

Crunch the numbers. Add up how much you spend on all your bills including childcare. See how much you are taking home with two incomes after all is paid. Take out one of those incomes and childcare and see how the before and after compare. The final results could be surprising.

Now, childcare has an important place in society, and even with the high cost, the leftover money likely helps pay the bills for many families. But it is hard to deny the chunk of change lost to having someone else watch your kids.

Gas Prices

The price at the pump is always fluctuating and will typically remain a financial concern for the average family.

Losing the commute is a big money saver.

Even at $2 for a gallon of regular unleaded fuel, even a gas-efficient sedan with a 15-gallon tank that fills up once a week costs close to $1,500 annually to fill up. Don't even think what it was like when prices near $4 a gallon. Without an every-day commute, the owner of that car can easily cut that number in half, and maybe more.

Sure there will still be trips to the park and drives back and forth from school, but you were probably doing a lot of that anyway. The big savings come from not spending all that time in the car going to and from work.

Just imagine what the new stay-at-home dad SUV drivers are saving. It will supplement the childcare savings nicely.

Workplace Cost Cutting

In today’s economic climate, businesses are suffering too. They are cutting costs by raising an employee’s contribution to health insurance, cutting benefits, and limiting raises.

Salaries are having a difficult time keeping up with inflation, which can make covering personal costs tough anyway. With other high costs out there that need to be covered, not having the additional money could push a dad away from the office.

Those intra-office cuts also could lower morale at work, and if the money isn’t right and a working dad isn’t happy, it could make the choice to stay home more intriguing.

Intangibles

Everyone who works spends a good deal of money on clothes, accessories, dry cleaning and more to look nice. Not that you won’t want to look nice for your family or those at the playground, but you certainly don’t have to wear a three-piece suit.

People can spend hundreds or thousands of dollars a year to look professional. Now a clean T-shirt and jeans probably does the trick.

If you ordered lunch every day at work, even at $10 a meal, you’re spending close to $2,500 a year. Do it once a week and that is still upward $500. In your new Spaghetti 0s world, lunches out are probably a thing of the past.

Add a $5 coffee a day and you’re breaking the bank. Even a daily soda from the break room machine can cost you nearly $200 a year.

Obviously there will be some added expenses that come with staying with the kids.

With someone in the house all day, utility bills can be higher. Families will have to budget for more activities with the kids such as museum trips or rec center programs.

But it costs a lot to work. After adding up the savings, even if it’s just a financial wash, it could be at your economic advantage to stay at home.