kids playing

Photography by Oslo In The Summertime

I’m scheduled to return to work in a couple weeks after a 5 month maternity leave. As the date draws closer, I find myself questioning whether I want to stay home or go back to work. It’s a dilemma that many moms face, and I had the same questions when I went back to work part-time after my first son was born.

I’ve decided to calculate it financially and go from there. Because I’m sure I could make the excel spreadsheet come to any conclusion that I want, I’m going to put together a list of the inputs before I put the numbers in!

Financial Aspects

Income that I would give up

  • Salary
  • Benefits – Health & Dental (none because we use my husband’s plan)
  • Benefits – Life Insurance
  • Benefits – Disability Insurance
  • Pension
  • Profit Sharing Bonus
  • 401k Bonus
  • Holiday Bonus
  • Corporate Lunches
  • Other company perks (Discounted/free events)

Expenses that could be eliminated

  • Nanny (less amount saved using dependent care account)
  • Taxes – Federal, State, Social Security and Medicare
  • Commuting (including depreciation on the car)
  • Lunches out
  • Work clothing
  • More dinners out due to not being home as much

Additional Expenses

  • Social Events – Mom’s clubs, etc.
  • Money spent to do stuff with kids – playgroups, sports, etc.

Can the following categories cover the difference?

  • Changes in budget (and the impact to our standard of living).
  • Changes in savings (and the impact to our long term dollar plan).
  • Earning additional money.

Other Financial Considerations

  • There’s a possibility that by putting us in a lower tax bracket, we might be able to qualify for other tax benefits that we weren’t eligible for before. I’ll have to research those.
  • Less credit card arbitrage (my income would be lower, so it’s likely we wouldn’t qualify for as high of limits.)
  • Changes in our mortgage, currently in an ARM. Refinancing without my income may change our options.
  • Our kids will likely get more expensive as they get involved in sports and activities.

Non Financial Considerations

Because I realize it’s not completely a financial decision, I’ve been brainstorming all the other things that I have to consider.

  1. Impact on my career in the long run. I’m only 28, so it’s likely I might go back to work once my kids are older. What would I have to do to maintain my marketability? Would I need to renew my professional designations (at my own cost)? Would I need to keep networking?
  2. Do I have enough credits to be eligible for Social Security? I’ve never factored Social Security into our long term plans. However, if it is available, it would be a shame to find out I was one quarter short.
  3. What is our plan for additional children? How is it impacted if I stay at home?
  4. Can I work part-time? I already know the answer to this one. It’s actually what I did when I went back after my first son. I am also planning on working only 4 days a week until my baby is 1 year old. After that though, it will be back to full time.
  5. If I didn’t go back, would I resign, or would I take a leave of absence (which preserves my start date)? How does it affect my pension calculation?
  6. I like my job. I have lots of friends there. While I don’t believe that you need a job for the social aspects and an identity, it is currently what I’m used to, so I’ll have to consider embarking on some new social adventures.
  7. Over the holidays we had the luxury of extending our vacation to 3 weeks. It was really nice! It’s something I might enjoy doing all the time.
  8. I would have time to volunteer for VITA which is something that I really enjoy, but don’t have time for right now.
  9. I might have time to devote to our new business that we launched… then again I might have less time!
  10. I could get involved in the mom’s groups. I looked into joining one with my first son, but couldn’t get very involved because many of the activities were during the day.
  11. I would need to look into new social activities for the kids. Right now we share a nanny with our neighbors, so the kids have other kids to play with during the day and lots of socializing. I would need to explore what to do with them so my 2 year old doesn’t crawl the walls.
  12. Read more considerations from readers.

Calculators

I found a calculator to stay at home and another can you afford to quit? In the cost of being a stay-at-home mom ($1 million) there’s also a second income calculator. I’m not sure how good they are, but I’ll compare the results to my home-grown worksheet that I’m putting together.

Action Plan

Whether or not you would actually consider staying home, I think it is an important exercise to go through. You’ll have a complete picture of the true value of your job. I’m planning to run the calculations for both myself and my husband. See our results.

What am I overlooking? Any monetary categories I missed or other considerations?






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Comments to Should I Stay Home or Go Back to Work?

  1. I’ve never regretted staying at home. We gave up a lot of financial security, but the non-financial benefits have been much greater, in my opinion.

    Of course, I was never on a career path, so I don’t worry too much about when or if I go back to work. I do need to work a little bit more, though, because I am just short of qualifying for social security. Not that I’m planning on social security, but it’s like you say. If it’s around, I’d hate to fall just short.

    Lynnae @ beingfrugal.net

  2. This is a tougher decision because you make a good salary. My wife’s income was just not worth the hassle. It was a no-brainer to stay home and she (and the kids) are happy that she has done so. (me too)

    rocketc

  3. Make sure you’re past a date at which you become fully vested for your 401-K matches (if any) or other retirement benefits. You also may want to use long weekends or vacation spent at home as a gauge of whether your driving will increase with your increase in free time. Running more errands or going to social events/outings could approach the mileage work put on your car.

    Becca

  4. Definitely keep us posted on what you decide.

    How will your family’s mental health be affected if you work outside the home or not? For me, chores get done during the week so I can spend my weekends with my husband without grocery shopping or cleaning something. I’m much less stressed this way, and so is he.

    Kacie

  5. The impact on your career is a huge issue. It’s not just the money that you don’t make whilst you are away, but that when you come back you’ll have lost out on all the salary compounding. I’d be interested in seeing calculations that took that into account.

    plonkee

  6. Well, a kid who never knew anything different would adapt just as well as a kid in other circumstances. You seem pretty good with money, though, like you could put some money to work for you. Very tough call. It is tough and uncertain with only one income. I lost my job, and the house was lost not long afterward. But for us, it was never a question, that my wife would stay home to take care of the kids. You can’t put a price on that.

    Lost Cause

  7. You appear to have left out the unrivalled joy of seeing your children giving you the “no strings attached” smiles and hugs.

    This is once in a lifetime opportunity.

    Secondly you may have underestimated your skills at making your side businesses work. If this blog is any indication, I am sure you can have some moollahs rolling in part time.

    Eitherway, this is a serious question that you are asking. If your child has any vote in this, she/he’ll probably say “stay at home”.

    fathersez

  8. It is a really really tough decision – and one I made but with simpler parameters. I wish you the best of luck figuring it out!

    paidtwice

  9. Stay home! :-)

    David

  10. My wife and I have been toiling over this decision. She has gone back to work but we’ve been wondering if it’s really worth it. What makes it tough is my wife makes a good salary and we’d like to buy a home in the next year or so. It’s a shame it’s so tough to live off one salary nowadays.

    FFB

  11. Hi

    I’m a first time reader and I was quite intrigued by this post. I agonized over this decision myself a few years ago, but in the end the agonizing was for nothing because deep inside I knew what I wanted to do.

    So, although this is a very thorough and impressive examination of the issue, I think you’ve left out the most important consideration. What do you WANT to do?

    What would make you happiest? Because a happy mum is a good mum. I truly don’t believe there is a one size fits all solution here. It can ALL be tough.

    My friends who work full-time and have kids are constantly exhausted and spend a lot of time struggling with guilt, their husbands and feeling cranky because they have too many people to consider in their life.

    But, being a stay at home mums means a life of kid talk, boundary testing and a sense that your brain has been replaced by mashed potato. Oh, and if you’re used to any sort of achievement and recognition at work, the invisibility of being “just a mom” to many people can take some getting used to. I thought the self employed SAHM option was the best compromise, but then the blurred boundaries between work and home make that a challenge too.

    So, it all comes down to what vision do you have of your life and your family? How do you WANT it all to work? When you can answer this, the rest will fall into place. Don’t let fear make the decision for you.

    Whether you stay home or go back to work, you have made the right choice as long as the decision is based on what is RIGHT FOR YOU. No one else. And no matter what, it will all work out with time. You’ve got a beautiful baby so you’re already blessed.

    Good luck!
    :) Kelly

    Kelly Rigby

  12. This is a very difficult decision. I chose to stay home with my children, but not with the insight into finances, lifestyle, etc. that you have.

    When my children were young, I had a multi-level marketing business. I would go out and do home shows in the evening once my husband got home. I went back to work outside the home when my daughter was 16 and my son was 11. I have never regretted being a stay at home mom. I’ve only regretted not having a plan.

    wealthy_1

  13. I find this post extremely interesting b/c I just got finished reading the The Feminine Mistake: Are We Giving Up Too Much? by Leslie Bennetts. And it’s basically pointed at the question of women on career tracks opting to stay home or not (she is in favor of maintaining at least part time work.) (Note I am single, have a career and have no kids but I am 95% sure if I have them I will continue to work, although I feel guilty about leaving my pets alone for the day so that may change) On the other hand I am the product of a working mother. The one comment that I was offended by was the one about no strings attached smiles. I still gave them to my Mom and MY MOM WAS AND IS A GOOD MOTHER. I don’t feel my mother would have been any better of a Mom if she stayed home.

    Jane

  14. I like your post, because I recently decided to quit my job, even though it is going to be financially very difficult for us. My boss pushed me to stay – even offering for me to work just 5 hours a week from home. However, I felt that I could not do my job adequately that way. Also, I think that these young years of my duaghter’s life (2) are precious, and I really felt like I missed out when working. I agree with the comments that say to focus on what you want, and then find a way to make it work. If you want to work – find a way that will make it balanced. If you do not want to work, find extra ways to save money.

    That being said, I think you need to remember what you spend on gifts at work. I felt like I spent a lot of money buying fundraising candy bars, wrapping paper, and bday lunches. You know that it is very hard to say no to that stuff! I find I still spend money on kid’s birthday presents for parties, but at least I can get a away with less expensive things, like coloring books and crayons.

    Best of luck in your decision. I can already tell that you are a great mom for weighing these factors so thoroughly!

    LCG

  15. Forget the financial considerations. Which choice FEELS right to you? That’s the most important thing. The rest will fall into place.

    Thanks for contributing this post to this week’s Carnival of Family Life, hosted at Modern Sage — Practical Living Blog. The Carnival will be live tomorrow, so please stop by and peruse all of the wonderful articles submitted this week!

    JHS

  16. I am 40 & a father of four, they go from 14,12,10, & 8. I was Mr. Mom and loved it, I had my part-time bookkeeping business that did okay, but I was there for school pick-ups, plays, days off, hearing about their day…..then my wife\’s sister who is VERY sucessful in the business world wanted me to go into business with her and other family members. The potential is great and if I stay it would have an unbeliveable $$ associated, there is a pot of gold at the end of the rainbow but I miss being Mr. Mom. I miss having the kids fed, the house is good shape and projects up to date before my wife (who has a great paying job) got home. Everyday I sit here I want to be there. My wife wants me back home and I have this internal battle going on. I don\’t want to disappoint her family, my wife or my kids. I want/need a sign. I have offered it up, prayed, and begged for clarity but inside I am in turmoil. We would be \”okay\” if I stopped or went to PT, we don\’t have much in the way of savings but we survive. I doubt anyone would read this so maybe I am writing this for myself right now. Whenever I hear Cat\’s in the Craddle, Don\’t Blink, You\’re Gonna miss these days, on the radio I start to well up. 8 years I\’ll be 48, my youngest will be 16 where do I go from there? THAT is my BIGGEST issue. I\’ll be 2 years away from 50, what will I do then………….WHAT IS THE RIGHT ANSWER?

    Mr. Mom Again?

  17. I think motherhood is the best job there is as well as the most frustrating. I was blessed to be able to stay at home with my two kids. When my youngest turned 15 months I felt ready to get on and do something with my life. I had taken a year’s leave from my PhD studies after she was born as I could not cope with the two. But this break showed me that I was never really passionate about the PhD as I felt absolutely no motivation to return to it. Instead I started an online buisness selling fashion and accessories which gives me the flexibility I need to still be there for my kids and do something productive and lucrative as well. My son is at school fulltime and my daughter goes to nursery four times a week. It may not make financial sense yet in terms of the return on my investment or the fact that I have to pay nursery fees, but it keeps my brain ticking over and I know that I will make a success of it in time. For me it was important to find that balance between stay at home mum and working mum. It keeps me sane.

    Michelle Defreitas

  18. After turning 55 and fully vested in my company, I retired and have not touched my pension or 401K. Can I go back to work for the same company at a lessor salary and not affect my current pension? My pension is figured on my highest salary with this company and I do not want to lower this. I always hear of state and government employees retiring, earning a pension, then going back to work with the same state or government agency with another complete package.

    Marty Dorfman

  19. I have been a stay home mom for over 20 years.

    You never hear anyone say “I wish I had spent more time at work”…..but you will hear them say “I wish I had spent more time with my children.” They grow up so fast!! Trust me.

    I am happy that I stayed home because my son passed away when he was 19. I have no regrets because I got to spend as much time with him as possible. Money isn’t everything.

    I have a website that lists over 101 real work at home jobs for those that want to work and also want to stay home with their children.
    http://www.stay-home-income.com

    Carla


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