Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
I finally understand why people say kids are expensive - daycare!
Old 10-14-2011, 01:59 PM   #1
Thinks s/he gets paid by the post
 
Join Date: Aug 2006
Posts: 1,356
I finally understand why people say kids are expensive - daycare!

None of the child-related expenses have been that big of a deal, but now my wife is going back to work and my 6-month old daughter is going to daycare.

Ouch!

The daycare is the same as my mortgage.
__________________

__________________
Hamlet is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 10-14-2011, 02:14 PM   #2
Thinks s/he gets paid by the post
FIRE'd@51's Avatar
 
Join Date: Aug 2006
Posts: 2,315
Quote:
Originally Posted by Hamlet View Post
None of the child-related expenses have been that big of a deal, but now my wife is going back to work and my 6-month old daughter is going to daycare.

Ouch!

The daycare is the same as my mortgage.
When people used to ask me if my wife worked, I used to answer "she's not in business".

A stay-at-home Mom is a valuable asset.
__________________

__________________
I'd rather be governed by the first one hundred names in the telephone book than the Harvard faculty - William F. Buckley
FIRE'd@51 is offline   Reply With Quote
Old 10-14-2011, 02:20 PM   #3
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Mulligan's Avatar
 
Join Date: May 2009
Posts: 7,369
Quote:
Originally Posted by Hamlet
None of the child-related expenses have been that big of a deal, but now my wife is going back to work and my 6-month old daughter is going to daycare.

Ouch!

The daycare is the same as my mortgage.
My deepest sympathy for the shock! My best friend waited 2 decades longer than he should have and just recently married and started a family. It stunned him. I told him he should have known prices went up since he was at the baby sitter back when Johnson was president. Besides it's good practice for you. Helps you to be mentally prepared for the car insurance, prom dresses, and college amongst a host of other things to numerous to mention that your wallet will be exposed to.
__________________
Mulligan is online now   Reply With Quote
Old 10-14-2011, 02:24 PM   #4
Recycles dryer sheets
Nuiloa's Avatar
 
Join Date: May 2011
Posts: 496
Quote:
Originally Posted by Hamlet View Post
None of the child-related expenses have been that big of a deal, but now my wife is going back to work and my 6-month old daughter is going to daycare.

Ouch!

The daycare is the same as my mortgage.

There you go! Retire early and start a Day Care centre in your home. You'll pay off the mortgage in no time and be able to use the rest of the funds to pay for good psychiatric help
__________________
Inside me is a skinny person crying to get out, but I can usually shut the b*tch up with cookies
Nuiloa is offline   Reply With Quote
Old 10-14-2011, 02:28 PM   #5
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
brewer12345's Avatar
 
Join Date: Mar 2003
Posts: 16,391
We knew we could not justify it based on DW's earnings and did not want to go the daycare route anyway. So about a year before DW got pregnant she quit her job and started her small business. Its never been a giant earner (did about 15k net last year), but its very lightly taxed, allows DW to keep her skills up and have adult contact, adds to our retirement savings pool, and having someone around to deal with all the real life stuff has been a winner.
__________________
"There are three kinds of men. The one that learns by reading. The few who learn by observation. The rest have to pee on the electric fence for themselves."



- Will Rogers
brewer12345 is offline   Reply With Quote
Old 10-14-2011, 02:43 PM   #6
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Nov 2007
Posts: 7,526
We were lucky to have my MIL available to take care of our kids, otherwise there is a fair chance DW would have been a stay at home mother. We do pay MIL, but it was $3600 a year (plus maybe another $500-1000 in food we brought over for our kids). Nothing like full time daycare even at a "cheap" place.

The good news is that in 4-5 years your little one will (hopefully) go to a mostly free public school.
__________________
Retired in 2013 at age 33. Keeping busy reading, blogging, relaxing, gaming, and enjoying the outdoors with my wife and 3 kids (5, 11, and 12).
FUEGO is offline   Reply With Quote
Old 10-14-2011, 02:47 PM   #7
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: May 2005
Posts: 13,248
Maybe it is just me.... but getting married and having a new wife and two kids... cost a LOT... and we do not have daycare...

I would say they cost $40K a year more than if it were just me.... probably more....
__________________
Texas Proud is offline   Reply With Quote
Old 10-14-2011, 02:49 PM   #8
Recycles dryer sheets
 
Join Date: Nov 2007
Posts: 103
Hamlet, if you're "middle class", you're looking at ~ 220K to raise your daughter from 0 to age 18, not counting college. I'm just the messenger though, but I've seen at least 3 studies on this (all of which come very close to the same figure). Most of these studies itemize the costs so you can mull them over and see if they apply to you.
__________________
slazenger is offline   Reply With Quote
Old 10-14-2011, 02:56 PM   #9
Recycles dryer sheets
 
Join Date: Jul 2010
Posts: 255
After the first child, we went the MIL route. It was free, but didn't work out at all - DW and I used over 4 weeks vacation each so MIL could have days off.

DW gave up a $150K salary to stay home after our second. It was clearly not a financial decision. However, we expected (and received) many non-monetary benefits. We moved to a less expensive area with good public schools to offset the saving loss.

DW now works about 10 hours/week since the kids have started school mainly to eliminate resume gaps and stay connected. She almost hits the 401(k) max at a 60% contribution rate, so that helps.
__________________
SunsetSail is offline   Reply With Quote
Old 10-14-2011, 02:59 PM   #10
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Mulligan's Avatar
 
Join Date: May 2009
Posts: 7,369
Quote:
Originally Posted by slazenger
Hamlet, if you're "middle class", you're looking at ~ 220K to raise your daughter from 0 to age 18, not counting college. I'm just the messenger though, but I've seen at least 3 studies on this (all of which come very close to the same figure). Most of these studies itemize the costs so you can mull them over and see if they apply to you.
Lets really pile on Hamlet while we got him down. Im assuming the 220k is just actual cost not opportunity cost. I bet that could grow to a 1/2 million lost in potential retirement money 18 years from now!
__________________
Mulligan is online now   Reply With Quote
Old 10-14-2011, 03:22 PM   #11
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Nov 2007
Posts: 7,526
Quote:
Originally Posted by slazenger View Post
Hamlet, if you're "middle class", you're looking at ~ 220K to raise your daughter from 0 to age 18, not counting college. I'm just the messenger though, but I've seen at least 3 studies on this (all of which come very close to the same figure). Most of these studies itemize the costs so you can mull them over and see if they apply to you.
This little rule of thumb would indicate kids cost $12k a year per head, or $24000 if you have 2. Since that is roughly how much our entire family of 4 spends on core expenses (things like food, house upkeep, cars, education, entertainment, utilities, etc), I think some in the middle class can raise kids for less than $12k a year. Particularly if you have more than 1, since they are cheaper per unit if you raise a large quantity.
__________________
Retired in 2013 at age 33. Keeping busy reading, blogging, relaxing, gaming, and enjoying the outdoors with my wife and 3 kids (5, 11, and 12).
FUEGO is offline   Reply With Quote
Old 10-14-2011, 03:34 PM   #12
Recycles dryer sheets
 
Join Date: Jul 2006
Posts: 102
Welcome to reality!! I heard about it but never accepted it or went with a low number... I was in denial. It was a big surprise for sure. I always tell myself it's only temporary.
__________________
HatePayingTaxes is offline   Reply With Quote
Old 10-14-2011, 03:38 PM   #13
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
clifp's Avatar
 
Join Date: Oct 2006
Posts: 7,450
Quote:
Originally Posted by FUEGO View Post
, I think some in the middle class can raise kids for less than $12k a year. Particularly if you have more than 1, since they are cheaper per unit if you raise a large quantity.
Cheaper by the dozen right? I am going to get right on testing out this theory.
__________________
clifp is offline   Reply With Quote
Old 10-14-2011, 03:42 PM   #14
Thinks s/he gets paid by the post
 
Join Date: Aug 2006
Posts: 1,356
Most of those studies get that number by assigning a percentage of housing and transportation costs to the child.

That might make sense if you are currently living in a small apartment and need to upgrade your living space to make room, but it's a little silly in most cases.

Our house didn't get more expensive when we had our daughter. We bought our newer car with a child in mind, but it didn't really add any meaningful expense.

Most of the expenses for children seem pretty modest to me so far. Clothing is more an entertainment expense at this point, as she has had so many outfits given to her by our family that we are going to be buried alive in baby clothes (and toys).

Most of the baby stuff is widely available used and cheap. We bought some new stuff, but we wouldn't have had to. Yard sales are a new parents' best friend.

We might end up spending that much, but much of that spending will be elective.

Quote:
Originally Posted by slazenger View Post
Hamlet, if you're "middle class", you're looking at ~ 220K to raise your daughter from 0 to age 18, not counting college. I'm just the messenger though, but I've seen at least 3 studies on this (all of which come very close to the same figure). Most of these studies itemize the costs so you can mull them over and see if they apply to you.
__________________
Hamlet is offline   Reply With Quote
Old 10-14-2011, 03:50 PM   #15
Thinks s/he gets paid by the post
 
Join Date: Aug 2006
Posts: 1,356
Yes, I encouraged my wife to stay home, but she didn't want to leave the workforce. It can be very hard to get back into it once you leave, so I couldn't really argue against going back to work.

She makes enough that we are better off financially with her working, even with the daycare expense.

I was more worried about the personal downsides to daycare than the money. Thankfully, it is working out better than I expected. The center we use has people that I am comfortable with now. They appear to be taking good care of her.


Quote:
Originally Posted by FIRE'd@51 View Post
When people used to ask me if my wife worked, I used to answer "she's not in business".

A stay-at-home Mom is a valuable asset.
__________________
Hamlet is offline   Reply With Quote
Old 10-14-2011, 05:21 PM   #16
Moderator
MichaelB's Avatar
 
Join Date: Jan 2008
Location: Rocky Inlets
Posts: 24,406
Quote:
Originally Posted by Hamlet View Post
Yes, I encouraged my wife to stay home, but she didn't want to leave the workforce. It can be very hard to get back into it once you leave, so I couldn't really argue against going back to work.

She makes enough that we are better off financially with her working, even with the daycare expense.

I was more worried about the personal downsides to daycare than the money. Thankfully, it is working out better than I expected. The center we use has people that I am comfortable with now. They appear to be taking good care of her.
Two of our three went to daycare and my granddaughter is going. There is no easy way. Part time work at home mom is hard to get but a great option. Just trying to help.

When doing the financial math don't forget to include the additional doctor visits. At a daycare, every time one child gets sick, they all get sick...and the parents often follow.
__________________
MichaelB is offline   Reply With Quote
Old 10-15-2011, 01:31 AM   #17
Recycles dryer sheets
GusLevy's Avatar
 
Join Date: May 2008
Posts: 98
As a full-time Mr. Mom of my precious 10-mo old princess I literally feel your pain. Raising an infant full-time is, IMO, the hardest job in existence for a man due to obvious biological, ummm, differences but also because it has been proven that a crying baby is the most stressful sound that a man can experience. An NFL half-back is the second most difficult job in the world for a man but that job works only half a game with various tv and coaching time-outs: There are NO time-outs for Mr. Mom and half-backs only have to deal with crying wide receivers.

I retired at 39 two yrs ago and would never have guessed that I'd be doing this right now: Living the Dream! Jokes aside, I do absolutely treasure my girl and believe that my time with her at this stage of her life is priceless for me. Having said that, the level of exhaustion entailed with this job pushed me into looking at daycare centers and nannies - for a couple days per week. The daycare center that I visited scared me to pieces - I could not envision, for me since I am not working, a scenario where I could leave my child with strangers and other kids at another location while I did important things like golf and nap.

As for the nanny option, the market cost for a nanny with decent references in my area is at least $15 per hour. The math thus worked out to Tue and Thur between 11am and 7pm for $240 per week: Basically a thousand bucks per month after-tax money for a nice woman to come at lunchtime and to go home at dinnertime for two weekdays per week...at the easiest time of the day to watch a baby! As much as I felt like that I needed the downtime for myself it became evident that the cost-benefit relationship for a nanny was not justifiable - at least until my girl is a bit older.

Anyway, watching an infant grow before my eyes is heretofore an adventure full of wonder and exasperation. I already reminisce about the first few months as she is growing so quickly it seems!
__________________
GusLevy is offline   Reply With Quote
Old 10-15-2011, 08:50 AM   #18
Full time employment: Posting here.
arebelspy's Avatar
 
Join Date: Apr 2011
Posts: 625
Quote:
Originally Posted by GusLevy
As a full-time Mr. Mom of my precious 10-mo old princess I literally feel your pain. Raising an infant full-time is, IMO, the hardest job in existence for a man due to obvious biological, ummm, differences but also because it has been proven that a crying baby is the most stressful sound that a man can experience. An NFL half-back is the second most difficult job in the world for a man but that job works only half a game with various tv and coaching time-outs: There are NO time-outs for Mr. Mom and half-backs only have to deal with crying wide receivers.
Hilarious.
__________________
arebelspy is offline   Reply With Quote
Old 10-15-2011, 12:57 PM   #19
Recycles dryer sheets
 
Join Date: Jan 2007
Posts: 105
Quote:
Originally Posted by GusLevy View Post
As for the nanny option, the market cost for a nanny with decent references in my area is at least $15 per hour. The math thus worked out to Tue and Thur between 11am and 7pm for $240 per week: Basically a thousand bucks per month after-tax money for a nice woman to come at lunchtime and to go home at dinnertime for two weekdays per week
And that is lucky if you have 'nanny' taxes included in that figure. We shared a full time nanny M-F with some friends last year. Add on the employer taxes & employee withholding that you have to deal with and it can quickly be as expensive as daycare (but certainly more flexible). Negotiate/Clarify all that up front.

We are now in a GREAT daycare facility with 2 kids under the age of 2. It is run at cost on-site as an employee benefit but still is $1850/month. Basically will cost us $80k until they are in kindergarden.....well worth it but ouch. Similar places nearby for profit would be $100k.

FWIW, obviously costs vary by region a lot. A tech co-worker of mine recently relocated to TX from CA and he said the same quality of care there would be $3k+.
__________________
jblack is offline   Reply With Quote
Old 10-15-2011, 05:09 PM   #20
Full time employment: Posting here.
 
Join Date: Sep 2004
Posts: 607
We are in SoCal, so not a cheap area. We pay about $750/month for 4 days a week (7 hours) preschool. My parents watch him one day a week. The reason it's so "cheap" is because it's almost a non-profit school since it's a tied to a synagogue. We aren't Jewish, but we appreciate that he gets great care and instruction and also gets exposed to a different culture. Since he's almost 4, the required teacher-to-student ratio isn't as high so it's cheaper than when he was a toddler.

Using the child care credit helps the cost a bit and summers are very low cost for us since DW is a teacher so he only goes to school for 2 half-days/week. Even with all of these benefits, we ended up paying about 6-7K/year after tax.
__________________

__________________
WanderALot is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


 

 
All times are GMT -6. The time now is 06:41 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.