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Staying at home with kids and FIRE?
Old 05-29-2014, 03:01 PM   #1
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Staying at home with kids and FIRE?

For those of you who have a stay at home spouse, have you ever considered the income you've given up? Yes there are a few years of daycare, but that eventually goes down considerably. And you've been growing your income during those years anyway.

What made you decide to give up the income? Did you regret it? Has it affected your ability to FIRE?

I get told a lot, you stay at home and don't work, so you don't understand. I wonder do families with two working parents get that by staying at home, we have less income to work with?
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Old 05-29-2014, 03:58 PM   #2
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My bride worked for a couple of years after we got married, but has been a homemaker since the time she was pregnant with our first. She works, I work. I get paid, she doesn't. Our money has always been that, OUR money. From day one.

Granted, we got married right out of college and it is probably a bit different for people who come from previous marriages with different sets of kids and so forth. But for us, that was never a question.

We don't feel like we gave up anything. Our kids were home schooled both in good colleges now. We never considered it a cost because we considered it part of the decision to have children. We were also blessed in that my income was sufficient. I recognize others are not in the same position and I'm not making a value judgment for those who decide to do it differently.

But to answer your question, no regrets whatsoever. We'll be able to FIRE just fine. How much it affected it is hard to measure, because if she did work, our expenses would have gone up also. In addition, who knows how her working would have affected our relationship, my earning capacity, and the kids well-being?
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Old 05-29-2014, 04:09 PM   #3
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+1 to this ^^^

Very similar circumstances here. Far from impeding our ability to FIRE, I would argue that only having one spouse fully employed outside the home freed us up to move around for bigger/better opptys and allowed us to accumulate faster than we would otherwise have done. In many cases working long-term for a single employer ends up netting you 2-4% annual increases at best and maybe a 8-10% promotional jump every 3-5 years -- contrast to a situation where you would potentially change employers every 5 years or so for increased job scope/responsibilities but also land a 20-75% total comp (equity+cash+non-cash) increase each time ... it add up!

On the cost side of the equation, IIRC correctly, once we tabulated the costs of childcare, higher taxes, commuting, dry cleaning for office wardrobe, keeping that wardrobe current, extra mileage on cars and meals the net of both of us working was pretty small ... unless you have partners both earning similar and high incomes, I believe this would be the case frequently.
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Old 05-29-2014, 04:41 PM   #4
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I worked at home when the kids started school. They went to the local school's daycare some days after school and during summer anyway because they had fun activities and that's where many of their friends were.
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Old 05-29-2014, 04:49 PM   #5
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I think it depends on a lot of factors. I stayed home when our second baby came for a few years, but worked very PT to keep my foot in the megacorp door. Even though the PT work barely covered the daycare costs, it allowed me to go back pretty easily when the kids were in school and pick up where I left off. I can tell you that our family life and my stress level were never better than when I was at home taking care of all the million things that you need to do with kids and running a household without also having to hold down a FT job at megacorps as well.

OTOH, my working has brought a lot of extra money into the retirement plan. I'm pretty darn good at my job and the technical challenge has at times been very rewarding.

With half of all marriages ending in divorce, I wonder if it is a good idea for any spouse to stay at home FT for a long stretch. If I ended up in a divorce tomorrow, I know I can support myself and kids on my own. Many of my stay-at-home friends with college degrees haven't been in the working world for the last 15 years or more and I think would really struggle financially in the event of a divorce. In fact, I have several divorced friends in that very situation and their standard of living has tanked and retirement has definitely been put on a back burner for them.

I have one co-worker who has divorced twice and he said he may never be able to retire. Apparently divorce can be a big wealth killer. Moral of story - marry the right person and make it work.
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Old 05-29-2014, 05:08 PM   #6
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There are more factors than that. I had spreadsheets on the different costs of childcare to figure out if it made financial sense for me to work after my 2nd was born. (It did since I have a decent paying career as an engineer).

My compromise was part time. I've been working 4 days a week for 12 years, and 3 days a week for the year prior to that.

But - it was also a matter of temperament. I would have gone nutso staying home full time when they were younger. I "like" them a lot more now that they are budding intellectuals and no longer just producing drool and poop. I guess working was selfish for me - but it saved my sanity.

I envied the mom's who were natural nurturers. I had to work harder at it, it wasn't one of my strengths/skills.

That said - I'm looking at retirement (giving up income) while my kids are in middle school. So I'll have plenty of time to be a stay at home parent.

I'm a big fan of there's no "one" answer to what the right solution is. Some kids are happy childfree. I know several families with stay at home dads... and even more with stay at home moms. Plus a bunch of dual income families. All of these families with kids seem to be doing a good job parenting and are involved parents.
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Old 05-29-2014, 10:53 PM   #7
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My spouse worked until the Friday before she had a csection. That was our choice. Our lifestyle changed, as did our spending patterns. But that is bound to happen when your life changes...and then changes again two years later when the second child is born. We were purposely living under our means in the year or two leading up to this.

Did it impact our FIRE? Absolutely it did-in a very positive manner.

We were able to retire when I was 58. I worked long hours, traveled frequently. Lots of pressure. It was lucrative. My spouse provided the stability at home and the security.

The last ten years involved a relocation to another city- with teenagers. Stayed on a furnished suite for three while we looked for a new home. I was on the road. This promotion, the move, and my ability to overachieve and be rewarded with significant stock options and yearly cash bonus money allowed us to be financially prepared.

Did we give up income? One might say yes if you look at from a singular perspective. But as a partnership, it was very much a net gain for the partnership. We did not know it at the time and it would not have impacted our decision. It was personal. We were fortunate to be in the position to make this decision without the stress of financial considerations. Because we planned for it and our habit was to live below our means. It still is.
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Old 05-30-2014, 12:29 AM   #8
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Quote:
Originally Posted by rodi View Post
There are more factors than that. I had spreadsheets on the different costs of childcare to figure out if it made financial sense for me to work after my 2nd was born. (It did since I have a decent paying career as an engineer).

My compromise was part time. I've been working 4 days a week for 12 years, and 3 days a week for the year prior to that.

But - it was also a matter of temperament. I would have gone nutso staying home full time when they were younger. I "like" them a lot more now that they are budding intellectuals and no longer just producing drool and poop. I guess working was selfish for me - but it saved my sanity.

I envied the mom's who were natural nurturers. I had to work harder at it, it wasn't one of my strengths/skills.
Well, a lot of that applies to me. In our house I didn't stay home when my kids were young. I was 40 when my first child was born and, frankly, the idea of just quitting work because I was now a parent didn't resonate with me at all. Perhaps that is because I was one of the few kids in the 50s/60s whose middle class mom worked (she also saw no reason to quit working just because she became a parent).

For the first couple of years I juggled everything and it was hard. So I did go to reduced hours for a few years. I wouldn't exactly call it part-time since it was actually closer to what full-time than part-time (basically I left the office at 4:30 or so a few days a week). That helped. I did earn reduced pay during this time and I was very aware of the fact that I was contributing less to the household. Note that in our family I was the higher earner than my husband. From a strict salary standpoint, if anyone would have quit to stay home with kids it would have been him. OTOH, he had better benefits, particularly pension benefits than I had (I had none). So, it really kind of balanced out.

Later we adopted 2 older children and I did work full-time after that. Although I was advanced enough in my career that I had some flexibility on when I was at the office and occasionally I would work from home.

4 years ago, with a 16 year old and a 13 year old, DH retired and I semi-retired. I went from working full-time to working one or two days a week.

Doing that did allow us to do somethings with our kids that we couldn't have done had not one of us been at home. For example, we homeschooled our daughter for high school (she has since graduated) and that was greatly to her benefit. I guess we could have done that with DH retired and me still working full-time.

There is no question that DH retiring and me semi-retiring 4 years ago made a difference in the money we have. We were at the height of our careers and our earnings. When I think of what we would have made over the past 4 years, well, it would have been a lot. Far example, a couple of years ago I worked about 12 hours a week and earned $85k. So you can extrapolate from that what I would have earned had I been working full-time.

So, without question, we have less money than we would have had if one or both of us had been working full time the last 4 years.

And, without doubt the fact that we both worked full-time allowed us certain things financially that benefited our family greatly at the time. One of our children needed to attend an expensive therapeutic school and there were other associated costs that were very expensive. We could never have afforded it had either DH or I not been working at the time. And, that child is now in college doing really well. So, I can never be sorry that we both worked and could afford that.

At the the same time, when DH retired and I semi-retired and we started homeschooling our daughter, we knew the hit we would take financially to do it but we felt he had "enough" and could afford to do it. It was much easier to do that knowing we already had enough.
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Old 05-30-2014, 05:10 AM   #9
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Glad to see the conversation hasn't devolved into the typical argument about what everyone ought to do.

What everyone "ought" to do is what is best for them. Given individual economics, circumstances, personalities, etc. -- what is best varies.
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Old 05-30-2014, 02:32 PM   #10
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Glad to see the conversation hasn't devolved into the typical argument about what everyone ought to do.

What everyone "ought" to do is what is best for them. Given individual economics, circumstances, personalities, etc. -- what is best varies.
Second this comment. I've never seen any place but this forum where a conversation like this can be had so frankly without people trying to push what they did on others.

I've loved seeing the responses in here since DW and I are at a very early stage of this tradeoff. We had fairly similar incomes until a little over a month ago when our son was born. For the 6 years we were married before the baby arrived, we lived on one income so that we could pay off cars, make an emergency fund, and save aggressively for retirement. The hope is that the savings of 200k (at 31 and 29) will be enough of a jumpstart that the newly reduced savings rate will still be enough to let us retire relatively early. The plan is for DW to return to work after the youngest kid (one more is plan) starts school. We know that an absence from the workforce for 7+ years will limit what she can go back to though (anyone take this route?)

It's hard not to think about how much easier the financial side of things would be if we kept the second income, but we think that for us having a stay at home parent is worth the cost. The comments about flexibility for new opportunities with only one earner make a great point that I hadn't considered. The decisions we've made so far to maximize our dual earnings definitely have caused us to miss opportunities to increase our individual earnings.
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Old 05-30-2014, 03:03 PM   #11
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We are also at the beginning of this arrangement. The plan is for my wife to stay home until the kids are in school (7ish years). She is a teacher and doesn't know if she wants to go back to the classroom after this period or pursue something else. We have plenty of time to figure out what that will look like.

Financially we are probably about even (if not ahead) if she was currently working. Teaching salaries have been frozen for awhile and would barely cover daycare in our area.
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