Daycare vs SAHM and pt of diminishing return

[kgtest]

With our outrageous daycare cost (which I realize is temporary) we aim to lose about $19k this year if DW decides to quit career and become SAHM.

I figure we could easily sacrifice 10k in the budget, and 10k of investing to recoup DW salary loss if she did SAHM.

My problem is there is actually more to lose, and gain than is probably makes sense to try and quantify. I already earn more than 2x her SocSec, so assuming we last the test of time she stands to get half of my SSI without really "losing" anything there in terms of yrs reported.

Gain in vehicle longevity with loss of extra daycare/career commutes.

Plus, DW admts SAHM might driver her crazy a little and we are not creative people, so paying for lesson plans at an early age seems like a WIN instead of a LOSS of time with the kid, we get a WIN with the structured day/lesson plans at daycare.

We don't really lose IRA contributions since we are married. Am I missing anything here?

 

[MBAustin]

Plus, DW admts SAHM might driver her crazy a little and we are not creative people, so paying for lesson plans at an early age seems like a WIN instead of a LOSS of time with the kid, we get a WIN with the structured day/lesson plans at daycare.

Do not underestimate this for the health of your wife, your child, and your marriage.

Also, you need to consider the long-term impact on her future earnings from being out of the workforce. Depending on her field, she may be far behind the curve when she is ready to go back to work, plus she will have lost those years of experience.

I concluded soon after our first child was born that I would be a terrible SAHM - and went back to work. The kids (now in their 20s) agree completely!

 

[Aerides]

It's a very personal decision that can't be determined by just finances. But since you're unsure either way, would a 3-6 month trial leave of absence be an option? You and your wife could then determine if it would work for you and your family or not. You're probably young enough that she could absorb a short period of income loss to decide, and early enough in her career to do so.

 

[Just_Steve]

It WAS a decision that should have been made prior to conception.

 

[daylatedollarshort]

I didn't work but went to school nights and weekends for when our kids were preschool age so I could get a job doing more techie contract work. Then when they were grade school age I started doing 1099 kind of work I could do from home while they were in school. It worked out pretty well. I was home when the kids were home but we still had enough of a household income we could both retire early.

 

[mpeirce]

It's a very personal decision that can't be determined by just finances.

Very true.

That being said, when DW switched to SAHM our finances actually improved. Sure, our income was lower, but what we had went further.

 

[CardsFan]

It WAS a decision that should have been made prior to conception.

That's pretty judgmental, and presumes this is purely a financial decision with no emotion involved.

To OP:
In our case, 35 years ago, DW went back and forth several times. We tried both ways, and ended up with a combination prior to finally committing to daycare when DS was about 3. This was NOT an easy choice, and can be different for others.

But...
DW was a teacher, getting in and out was not a big deal, and daycare was a LOT more affordable back then (in relative terms).

Whatever you decide, it CAN be changed if it does not work for you. There is no right or wrong answer.

OTOH, what I see a LOT, and think is wrong, is the assumption that the retired grandparents, great aunts/uncles should take over this duty to help the family. If they volunteer, and really want to, that's great. But I have personally seen it assumed they would do it, when they had other plans.

 

[candrew]

I didn't work but went to school nights and weekends for when our kids were preschool age so I could get a job doing more techiecontract work. Then when they were grade school age I started doing 1099 kind of work I could do from home while they were in school. It worked out pretty well. I was home when the kids were home but we still had enough of a household income we could both retire early.

Along a similar vein, while our kiddos were pre-schoolers, DW decided to make a career change and become a public school teacher. After DW received her teaching certification, she went to work in the same district and on the same schedule as our kids.

 

[kgtest]

It WAS a decision that should have been made prior to conception.

We certainly discussed it and at the time (pre kids) but never really came to a decision. It more or less got to the point "i am getting old and cannot bear children forever" which at that point SAHM was second to actually attempting to conceive.

The discussion really ended with no definitive yes I want to be a SAHM or NO I do not. DW has always had mixed feelings so I figured I would get some advise from my trusy forum friends.

Financially we could "afford it" with a different quality of life than now, but not necessarily worse.

 

[kgtest]

OTOH, what I see a LOT, and think is wrong, is the assumption that the retired grandparents, great aunts/uncles should take over this duty to help the family. If they volunteer, and really want to, that's great. But I have personally seen it assumed they would do it, when they had other plans.

Saw this with my elder siblings. Burnt out mom and dad and really I don't think the kids were getting the quality of care they deserved. My folks are slow and old, I would prefer young and energetic teachers/care givers.

All it really did was create some tension between my folks and my siblings as they didn't feel like they were "free" to do what they wanted.

 

[kgtest]

Very true.

That being said, when DW switched to SAHM our finances actually improved. Sure, our income was lower, but what we had went further.

I could see this happening with my family. Perhaps we are filling voids by paying for pricey entertainment, events and THINGS when perhaps if DW was not tied down to a 40hr work week, we could find alternative things to do that might actually be less expensive.

I suppose I need to think more about how the dynamics of the family would change with a switch to SAHM. Honestly more concerned about family dynamics than $$ but $$ certainly is part of the equation.

 

[Scrapr]

When Mrs scrapr became a SAHM it was the best decision we made together. She was very involved in the school stuff. And keeping our boy on track. He certainly got better teachers and more help because of it. And i got dinners on time too!

We did give up some money. But SAHM allowed me to work & grow our business. Attending evening meetings, networking, Saturdays, etc. She helped me with my networking skills (which were horrible before we met)

For us it was very rewarding

 

[Red Badger]

Like lots of topics here, there is no one size fits all (or even most).
FWIW, DW was a SAHM, and it worked awesome for our circumstances. I was almost an absentee father.
I went back to college at night to complete my undergrad, then followed up with MBA (also at night). I was working 50-55 hour weeks and also doing army reserve duty at least one weekend per month (usually more).
After completing my MBA, my work went from moderate travel to road warrior. And this continued for the last 20 years of megacorp.
DW was the one constant in our son's life, and for that I'm eternally grateful and indebted.
So I wont offer advice, only to add (as others here already done) that maybe a trial sabbatical is worth considering.
Most of all, best wishes as you evaluate your lifestyle choices.

 

[Philliefan33]

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Also, you need to consider the long-term impact on her future earnings from being out of the workforce. Depending on her field, she may be far behind the curve when she is ready to go back to work, plus she will have lost those years of experience.



I concluded soon after our first child was born that I would be a terrible SAHM - and went back to work. The kids (now in their 20s) agree completely!

This is an important point. I was a SAHM for three years after my oldest was born. I went back to work part time when our youngest was about a year old. My take-home pay barely covered the daycare cost, but it was important for my career and my sanity to get back into the workforce.

After a couple of years of part time I went back to full time. Daycare costs went away as the kids got older, and my salary grew to make a significant impact on our life.

 

[athena53]

Also, you need to consider the long-term impact on her future earnings from being out of the workforce. Depending on her field, she may be far behind the curve when she is ready to go back to work, plus she will have lost those years of experience.

Yes! I rarely see this factored in. The concern about getting back in is a real one; I have a friend with a law degree who tried to go back to paid employment when her kids were teenagers. No one wanted to hire her.

Remember also that, depending on her income potential, raises and promotions could leave you with more cash in later years. By the time DS was 12 I was making twice what I'd been making when he was born.

In the end, it really is a personal decision. I went back to work when DS was 6 weeks old, partly because I wanted to and partly because we needed the income (and it WAS cash-flow positive). DS is married to a wonderful young woman who's a SAHM to their two little girls. I see the advantages but it would have driven me crazy.

 

[bclover]

It WAS a decision that should have been made prior to conception.

LOL, if I knew the cost of kids prior to conception there would have been a good chance that I would have never conceived.

now I know why my mother just smiled when I informed her of all the wonderful things I was going to do when I became a mom.

anyhoo op,
I was a very short sahm, mainly because in my field (petrochemical) staying out 5-10 years could be a career killer and I always knew I wanted to eventually return to work.

so I echo others when I suggest you guys keep that in mind

 

[daylatedollarshort]

One thing I would change if I had to do it over again is play better "defense" on the expense front, like watching grocery prices, making simple crock pot meals in the morning instead of carry out on busy nights and making the house energy efficient. None of these really take that much time long term but combined they could have cut years off our retirement date. That can be a part-time job in a way when the kids are little, and there are no taxes or daycare expenses on a dollar saved compared to a dollar earned. A lot of what I made, on top of DH's income, ended up going to taxes - SS, Medicare, federal and state. We might have come out ahead if I'd worked a bit less less and paid more attention to expenses.

But looking back I'm glad I did work when the kids were in school and that I tried out different careers until I found something I enjoyed, paid fairly well and could do during school hours. And having a home business we both worked at was great for deductions and high retirement plan savings limits. Plus business assets and retirement accounts are usually FAFSA exempt asset classes, so our out of pocket college expenses were pretty low after grants and paid internships and tutor jobs for the kids.

 

[athena53]

LOL, anyhoo op,

I was a very short sahm, mainly because in my field (petrochemical) staying out 5-10 years could be a career killer and I always knew I wanted to eventually return to work.

A colleague used to refer to the "half-life" for various careers, I.e. how long would it take for half your work knowledge to be obsolete? Certainly short for the petrochemical industry, longer for something like retail and fast food. Careers can also disappear or diminish (sales in mall stores, Admin assistants) and if you're out of the workforce you lose the opportunity to transition to something else.

 

[CountryGal]

We had one child and I stayed in the workforce. The career would have taken a huge hit. Fortunately flexible work arrangements were starting to take hold at that time. I stayed home one day a week and went in late to take kiddo to school on most mornings.

I was also able to work from home due to illness or weather. So bonus was that kiddo got to see Mommy "at work". She heard me on phone conferences and in phone calls when at home.

I longed to stay home and kiddo longed for me to be like the other neighbor moms. In the end it was a win for us both I think. I was fulfilled in my career and kept up to date. Since I was the higher breadwinner that was a huge plus. Kiddo got the socialization and education she needed prior to going to school. In the summers she got to far more places with her day care program than I would ever take her.

Keep in mind, if you have a great day care (not just in-home family care) they will teach them things that you don't/can't. It does take a village. Our kiddo was in gifted program, took honors classes and got scholarships to 5 different colleges. I did not want a family day care with too much influence/exposure to one or two people.

 

[Sue J]

Plus, DW admts SAHM might driver her crazy a little and we are not creative people, so paying for lesson plans at an early age seems like a WIN instead of a LOSS of time with the kid, we get a WIN with the structured day/lesson plans at daycare.

I was a SAHM and LOVED it! DH and I both wanted it that way, yes, even before conception.

I'm not understanding the part about lesson plans. Kids 0-5 don't need lesson plans, they need to play and be creative. They need to sit on your lap while you read to them and they need to go on errands with you where they learn to operate out in society.

Just one mom's opinion.

 

[Bigdawg]

One thing I would change if I had to do it over again is play better "defense" on the expense front, like watching grocery prices, making simple crock pot meals in the morning instead of carry out on busy nights and making the house energy efficient. None of these really take that much time long term but combined they could have cut years off our retirement date. That can be a part-time job in a way when the kids are little, and there are no taxes or daycare expenses on a dollar saved compared to a dollar earned. A lot of what I made, on top of DH's income, ended up going to taxes - SS, Medicare, federal and state. We might have come out ahead if I'd worked a bit less less and paid more attention to expenses.

When DW was a Sgt(E-5) her base pay was about $1100/mo. The daycare for our 2&4 yr olds was $1100/mo. Friends said "have her get out of the military and stay home". In the 20 years since that year, DW was promoted 7 times in the military, retired and started getting a pension check at age 40 when DD was a junior in HS and now makes an additional six figures each year with current job which she would not have if she got out of the military 20 years ago. -Sorry about the run on sentence.

That's the $ aspect. Obviously there are other concerns. YRMV.

 

[daylatedollarshort]

When DW was a Sgt(E-5) her base pay was about $1100/mo. The daycare for our 2&4 yr olds was $1100/mo. Friends said "have her get out of the military and stay home". In the 20 years since that year, DW was promoted 7 times in the military, retired and started getting a pension check at age 40 when DD was a junior in HS and now makes an additional six figures each year with current job which she would not have if she got out of the military 20 years ago. -Sorry about the run on sentence.

That's the $ aspect. Obviously there are other concerns. YRMV.

It depends on your circumstances. We're in a high cost of living area with state income taxes and weren't as careful on the expense front as we could have been so with being retired we cut our annual expenses six figures a year compared to what they were - quite a bit was from paying less taxes. And cutting expenses is not like working every day for decades. We did a lot to make the house more energy efficient and most of that involved one time activities that could carry over for 50 years - a very high payback per hour of work.

 

[kgtest]

Thank you all for the insight. After discussing with DW she sort of reconfirmed that being SAHM might not be something she desires full time but did like the idea of at least trying it.

I don't know how the conversation turned but it shifted into her discussing looking for a different type of job, perhaps with the school system, where it allows more flexibility and less time commitment than a 40hr /week job but still allows her to have purpose outside the home.

By the time DW finds the next best thing, for all intents and purposes, the kids might be out of daycare and onto school where schedules shift again.

Seeing other's perspectives is helpful, but I do realize it is an individual decision.

 

[daylatedollarshort]

Thank you all for the insight. After discussing with DW she sort of reconfirmed that being SAHM might not be something she desires full time but did like the idea of at least trying it.

I don't know how the conversation turned but it shifted into her discussing looking for a different type of job, perhaps with the school system, where it allows more flexibility and less time commitment than a 40hr /week job but still allows her to have purpose outside the home.

By the time DW finds the next best thing, for all intents and purposes, the kids might be out of daycare and onto school where schedules shift again.

Seeing other's perspectives is helpful, but I do realize it is an individual decision.

The nice thing about being able to live on one income then your wife has time to explore different options and anything she brings in is extra. She can take her time and find something she enjoys and works with the kids' schedule or go back to school herself for a career change.

 

[Bigdawg]

Thank you all for the insight. After discussing with DW she sort of reconfirmed that being SAHM might not be something she desires full time but did like the idea of at least trying it.

I don't know how the conversation turned but it shifted into her discussing looking for a different type of job, perhaps with the school system, where it allows more flexibility and less time commitment than a 40hr /week job but still allows her to have purpose outside the home.

By the time DW finds the next best thing, for all intents and purposes, the kids might be out of daycare and onto school where schedules shift again.

Seeing other's perspectives is helpful, but I do realize it is an individual decision.

What if you told DW that you wanted to be a SAHD? How would that conversation go?