One of the toughest decisions facing new parents is whether or not to return to the workplace. In many cases, moms go back to work because they, or their partners, believe they need the money. You may be surprised to learn that living on one income is not just for the rich.
You may be working for pay, but once you have a baby you will want to figure out your "costs of going to work" because they are only going to go up. As any working mom knows, the biggest expense associated with working is child care. Day care is the most affordable option, but even that will run you $5,000 to $15,000 a year depending on where you live. And if your hours are unpredictable or too long for day care, you'll need to hire a babysitter or nanny instead. In this case, your child-care costs could reach $25,000 a year. It doesn't take an accountant to see that you have to earn a pretty decent salary to make working worthwhile.
Your other major work-related expense is commuting. Gas, car insurance premiums, and car maintenance can run you several hundred dollars a month or more. Even mass transit begins to add up when you use it every day.
Finally, income taxes are a major consideration for two-income families in the U.S. Couples with two incomes actually pay at a higher tax rate than those with just one. The smaller paycheck, often the working mother's, is taxed at this higher rate, resulting in the so-called "marriage penalty."
While some work-related costs may seem obvious, you'll need to watch the "hidden" costs, too. Here's a list of the little extras that can really add to your budget:
Once you've identified all your job-related expenses, figure out what your second salary really brings in every month. Make a realistic budget and decide if you can afford to live without that second income. Even if you discover that your salary brings in only $1,000 a month, that money may be necessary to pay your bills.
If you think you can make it work on one income, however, you will probably still need to cut expenses here and there. Here are some tips:
Although many parents base their decision solely on dollars and cents, you may find that you need or want to work for other reasons. Perhaps you are in a field, such as academia or health care, where taking time off would mean a major career setback. Or maybe you know you'll be a much better mom if you have an outlet through your work.
If you decide to stay in the work force, consider working part-time or from home. Finally, you may want to think about having your husband stay home. A "Mr. Mom" around the house makes sense for some families.
For many women, once they get over the initial shock of staying at home, they say they can't imagine life any other way. With a little bit of planning and work, you might be able to join their ranks!