Financial Feud: Paying for daycare vs. Quitting to care for a kid

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$1,200 - $1,500 a month

The Argument:


I want to quit my job so I can take care of my daughter and avoid paying for daycare, but my husband wants me to keep working. He says we need my paycheck to pay the bills. I say that by the time we pay for daycare ($1,200 - $1,500 a month) and gas for my commute, I might as well not go to work at all. AM I RIGHT?

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The Argument:

Have you seen the cost of daycare lately?!

Ever since I went back to work in March, my mother has been looking after our infant daughter. However, we just found out that she and my father are being transferred to Seattle soon, so we are going to have to find a childcare alternative.

Based on our research so far, it looks like monthly daycare could cost us more than our mortgage -- about twice as much a month. That amounts to 80 percent of my paycheck. If you factor in gas for my commute and other incidentals of working, I’d be left with about $100 at the end of each month. I don't think that's enough to justify having someone else raise our daughter.

My husband argues that we need my paycheck to pay for our car payment, mortgage, etc. My company also offers much better healthcare than his. Plus, he says he's worried about me leaving the workforce and not being able to further my career.

We have until September to come up with a solution, and at this point, we're hoping we win the lotto before then.

In some parts of the country, putting a child through daycare can cost more than sending them to college. That's according to a report by Child Care Aware of America. The study found that annual childcare fees amount to $15,000 in some states. That means it could be cheaper to enroll your 4-year-old in a four year public college than daycare.

In North Carolina, where Kyle and David live, parents pay more than 12 percent of the state median income for childcare.

When you start to weigh those prices against a weekly paycheck, sometimes staying at home to take care of your kids makes sense.

But according to Liz Weston, personal finance expert and founder of AskLizWeston.com, "It isn't just about the money."

"It's not just the paycheck coming in and how much is going out for childcare," she says. "Healthcare is one of the big deals. And making sure that you have coverage, and that it's good coverage."

Kyle's career is also an important factor, says Weston.

"The fact is when you take time out of the workplace, it gets harder and harder and harder to get back in," she says. "And you can't really recover a lot of times the lost pay, the lost pension benefits -- if there's a pension involved -- even the lost social security benefits. Which is why we like couples to think about every possible way that they might be able to work this out."

Weston recommended considering alternative options like working part time and staggering schedules, so that Kyle and David can cut back on childcare costs but hang on to Kyle's benefits.

But she stressed the importance of keeping a foot in the workplace.

"Even if you do decide to quit for a while, keep up with your network. Make sure that you're still going to professional events now and then. Talk to the people you used to work with. Dont' just drop it, because it's hard to drop back in and you will have a tough time making up for lost time," Weston says.

About the author

Liz Weston is one of the most-read personal finance columnists on the Internet. Her columns appear on MSN Money and in newspapers across the country, including the Los Angeles Times and Stars & Stripes.
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Child care is a most important thing for the parents, in most cases the parents have no time to take care of the child so they give the child to the child care. In every city you can get the child care center for the people and as per the charge you can pay the amount for the child. In some case most of the people like to give their child to the residential school and its cost is cheaper than the child care center so how to handle the situation that depends upon the parents.

I'm a retired grandmother now, but I took about 4 years out of the work force with my children when they were young. This couple needs to discuss what's really going on here. Does the wife really make $100 or so a month after childcare and commute expenses? That seems very unlikely to me. I recommend taking a look at their entire financial situation to determine if they can truly afford for her to take a few years out of the work force. For example, do they have liquid savings equal to 8 months living expenses? How much will their medical expenses increase if they rely on the husband's benefits? Are there other expenses they can cut, such as gym memberships, eating out, travel, gifts? As far as the wife falling behind professionally, they should consider whether or not that's true in her field. Would she change fields when returning to work? This couple needs to take a long honest look at their entire situation, including their fears and motivations and values.

They're on her health care - the difference in what they'll have to pay is probably also hefty.

Look, 10, 15 years ago, I might have agreed with the stay home strategy. Right now, in this economy, the whole idea of a family relying on one job and one breadwinner makes me nervous. You quit and then your husband loses his job, now what are you planning on doing?

Yes, the kids are only young once. Yet strangely enough their fathers seem to have relationships with them without having to be home all day. Look at church based day cares or if you're near enough to a college or university, they usually have day care programs and some of those are subsidized.

I have 2 children, 4 and 6. The first few years of their life are absolutely precious. They develop and learn so quickly and you never get that time back. Stay at home with them! I agree with Liz Weston in regards to working p/t and continuing to network, but you only get to hold your children a certain amount of times before they are too big to hold again. After an 8 hour workday, a commute home, additional household duties and family to do's, you will be giving your children a tired mommy and not the best, sharpest, most patient mother that you can be. If you can afford it, stay home. Cut back on personal spending, eat out less, buy a used car, get rid of car payments and don't be afraid to sacrifice for them now. The argument of "you're letting someone else raise them" vs "you actually still raise them" when you work full time is really more about how much you do and have to undo when raising them. A few hours a night and on weekends is your family time when working, the rest is in the hands of the daycare, school, etc. Get them while they are young and when you can love on them the most by spending all of that time with them, engaging, teaching, feeding, reading, cleaning, mothering. That's the most important thing, that's the best healthcare. Next is the money, the saving for college, etc. Revisit your finances and cut where you can and you'll earn much more than the $100 you get by working full time. Quote your auto and homeowners insurance out again, cancel a home phone if you have one. This one's a no brainer, give it to the kids for a few years at least and then work your butt off for an income for you and the family afterwards. The kids deserve it and will need all of the love, influence and education that you can provide prior to getting into the real world. Full time mom, part time employee, not the other way around. If you're fortunate enough to stay home, definitely do it. Good luck, good wishes and God bless.

This is a very hard and very personal decision. I did send my children to daycare so I could work. It was a difficult few years. I often felt I wasn't doing a good job in either place. My kids were frequently sick so I had to take a lot of sick time at work and there were always the nights where there just wasn't enough time or energy to get the home stuff done. But in the long run, I think it was worth it. My kids have learned about work ethics. We have a good financial situation and have been saving for both our retirement and their college education. In addition, because I spent all those years advancing my career, when they were both in school I was able to convert my job to a remote position and worked from home, because it really isn't any easier when they go to school. There are so many days off and I wanted to be home when they get home from school.

The real bonus was that at one point my husband lost his job. Because I was working and providing the health insurance benefits he was able to start his own consulting business and we didn't have to deal with 2 unemployed parents.

I won't pretend that I didn't wonder many times if it was worth it during those early years, but now that my girls are in college I know it was the right decision for our family.

Two issues you didn't mention: tax rate and cost of working. If quitting lowers your tax rate, you might break even or better compared with working and paying daycare. Even after the child care tax credit. Another issue is the cost of meals out and "instant meals," cleaning help, gas, and other costs of dual working parents. With the money you save, you could have that second kid right away and stay home until kindergarten, or at least a cheaper nursery school at age 3 or 4.

There's more than one way to stay up with your career. Pro bono work, professional certifications and extra courses, and part-time gigs can fill your résumé for the four or five years you spend at home.

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