Pam writes in:
I have been a stay at home mom for most of the last 19 years. Our oldest son started college this year. We still have our other son who is 16 and our daughter who is 13 at home. I have returned to work part time as a caregiver and my husband is pushing me to work full time. I don’t want to and think it is counter productive because I believe I already have a part time job saving us money. I work very hard at keeping our expenses low. I only spend about 90.00 a week for our family of 5 on groceries, pet food, toiletries. We eat very healthy home made meals. Over the years people have commented to my kids that we must be rich because we have all this nice stuff and I don’t work. Well I do work. I work hard at getting the things we have for much less than most people pay. My husband makes about 60,000 a year and has full medical, dental and vision benefits and pension through work. So as you can see we are far from rich. I have taken on extra hours at work for the last 6 weeks or so and have noticed that our grocery bill has gone up by at least 50.00 a week and commented to my husband about that. If I were wonder woman I know I could continue to save us money and work but I am not.
Here’s the situation as I see it. Both you and your husband want you to choose a path that puts the family in the best financial situation. Since your husband works, he sees work as the best way to put your family in that position. Since you’ve been a stay at home mom, you see the various home economics you do as the best way to achieve it.
The real solution to this whole question, though, is the numbers. That’s where you have to start.
First of all, you have to both be in agreement that the goal is to maximize the difference between what you spend and what you earn, a number I like to call “the gap” (a term I use many times in my upcoming book). If you return to work, the amount you bring home will go up, but so will the amount you spend. If you stay at home, the amount you earn and spend will stay roughly the same.
So, the question really is whether or not the amount you bring home will match the amount you save from working.
This is where the calculator is going to come in handy because you need to carefully calculate an accurate budget for both scenarios. How will your true spending change if you return to work? You know from experience that your return to part time work has raised your food budget by $50 a week – that’s $200 a month. What will it go to if you work full time? I’m pretty sure your food budget will go up even more than $50 a week from where it is now if you do. What other elements of your household budget will be adversely affected?
There are several other factors to consider, too. What costs are there associated with your work? I’m not sure what caregiver means, as it could mean anything from an in-home daycare to something like hospice work. In either case, extra work will mean extra expenses for that, such as supplies for in-home child care to transportation costs for hospice work.
What about taxes? Every dollar you bring in is taxed at the highest rate. Thus, the first $7,900 you earn will have 15% go to federal income taxes, and every dollar beyond that will have 25% go to federal income taxes. You may also have state taxes, and you’ll certainly have FICA taxes, which tack on another 15% or so.
Figure up all of these factors with real estimates. I honestly don’t know how it will all turn out for your case (as there’s not enough data here), but I will say that I wouldn’t be surprised at all if the numbers are close.
Of course, in a few years when your children are independent, the equation will shift in favor of you returning to work – and you should return to work at that point (if you want to, of course). Your total family cost for food and household supplies will drop drastically, for example. That, however, is a bridge to cross in several years.
The way I would do it is to simply make two budgets and make direct comparisons between the two so that the costs and benefits of your returning to work are clear.