The High Cost of being 2 Income Parents

America, the beautiful country where if you work hard enough, you can have anything you want. Let’s revise that, if you work smart enough you can have what you want.

So here you are, a hard working couple that is thinking about, or has already, started a family. Here’s the tough choice crunch time. Should you both work and rely on daycare, or should one of you work and one stay home with the child(ren).

Before you run to work, make sure you know all the advantages and disadvantages of one of you staying home.

The main consideration you should make is for the welfare of your child. Hands down, no one is going to love and cherish your child like you do. No one has the same values to teach, no one will benefit more from having a bond with that child. No one. This is your child.

Please note: If you have a grandparent that would love to watch their grandchild while you both work, you are very lucky and I am jealous.

If you don’t:

You have to consider the finances. No one wants their child to be poor, would you be okay staying home? Too many of my friends ran in fear back to their jobs just to find out that they could have been in better financial shape if one of them stayed home. Yes, I said better.

Let’s look at daycare. Depending on your situation this can vary widely. For our model let’s say you are paying $500 a month for daycare. So, it’s costing $500 for the second parent to work and use daycare.

The costs of two people working is higher than most people realize. First you probably need two cars, where only one is needed if a parent is home. Let’s say you have an extra car payment of $300 a month add Gas and insurance and you are closer to $450. So it’s costing an extra $450 a month In auto expenses for the second parent to work.

First cost Daycare: $500Second Cost 2nd Auto: $450

Now let’s look at taxes: You will have to look at your specific tax brackets to see how much more  taxes you are paying for the second parent working. But with the unearned income credit (hey you have a child, you could be eligible now) limit being $38,000, the second parent working could put you over-the-limit. You would lose $3000 – $5000 on your refund. That is about $400 a month.

First Cost Daycare: $500Second Cost 2nd Auto: $450Third Cost tax credit loss $400Total Monthly cost for second parent to work: $1350Total Yearly cost for a second parent to work: $16200

The last cost I am going to discuss is more personal. We are human beings, with both parents working, and raising children you will be more tired and take more short cuts. Ordering Pizza, maid service, returning movies you never got to watch to the video store, more illness and stress, not making repairs yourself, all these things will add hidden costs to a 2-Income home.

I am sure we could go on and on about more potential costs. A second parent working usually requires better clothes, eats out for lunch, grabs a Starbucks, etc. The point here is , do your research. Don’t be so terrified to give up a second income that you are actually paying to go to work.

My personal thoughts: I am a strong believer that your child needs your love and attention more than new shoes or cool video games. Work at home if you have to, but please make your choice wisely.


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