Daycare vs. Stay-At-Home Parenting

This week, The Simple Dollar attempts to address challenging questions in personal finance by looking at both sides of the story and figuring out some of the factors you need to look at to make a decision.

Yesterday, in response to a discussion about

the financial costs of a two year old child, the following comment was left, which resulted in the beginnings of a debate about the value of daycare, the value of both parents being employed, and so on:

It’s unfortunate that you send your kids to daycare. These are the prime growing years for a child. How viable is it to have your wife work at home or not work at all?

When a person becomes a parent and they look at that child for the first time, they want that child to have every great opportunity in the world: a great education, a healthy upbringing with strong values, and so on. Unfortunately, for most families, difficult choices have to be made. Do you send your child to daycare and focus on earning money, or do you stay at home with the child to maximize their personal fulfillment? It’s not an easy question, so let’s look at both sides of it.


Many modern families find themselves in a financial situation where they both must work to provide a good home for their children. This isn’t the 1950s any more – house prices have grown at a rate much higher than inflation, just for starters. As a result, many people are in financial situations where both parents have to work.

Beyond that, a quality daycare center can be a very enriching experience for your child. A good center can provide many activities, social interactions, and experiences that simply can’t be done in a home environment because of expense of the materials and the startup time involved. For example, the daycare center that I take my children to has no televisions anywhere and a schedule of activities for the children each day that, quite honestly, I couldn’t match in a home environment. The primary employees are paid strong wages (they have “assistants” that are paid minimum wage who primarily just set up and take down activities and occasionally assist with wrangling larger groups of children) and they genuinely care for the children. The adult-to-child ratio never exceeds 1 to 4, either. It’s expensive, yes, but the experience is a good one for my children.

I’ll be the first one to say that a daycare where they plop children in front of a television all day is not a good one, but a quality daycare center can enrich your child and enable you to get things done.

Stay At Home!

The argument for a stay-at-home situation is obvious: no matter how good a daycare center is, it doesn’t match the love and nurturing care that a parent can provide for their child. Workers at daycare centers are employees – not parents – and they don’t bring genuine one-on-one attention and love to the child that a parent can bring.

Not only that, the actual financial loss due to having a stay-at-home parent usually aren’t as much as you think. You’re eliminating the cost of daycare, the cost of transportation to work, the cost of clothing for work, the cost of eating out with and entertaining coworkers, and some home costs as well, since a stay-at-home parent can cook meals.

Adding the two together makes a very compelling case for putting your career on pause for a while to give your child the very best.

My Take

I live in a home where both parents work, but we both wish we could be a stay-at-home parent at least part of the time. In fact, with the birth of our second child, we came very close to making that leap, but backed away from it after some analysis.

The real reason is that we feel our children benefit on the whole from their time at daycare, particularly our two year old son. We spend quite a bit of money on daycare for our children (it’s literally the best in our area), and the environment is one that we feel very happy with, as described above. Our son’s language skills are off the charts for children his age (he can largely speak in complete sentences – and always expresses complete ideas – at age two) and he often exhibits learning that we simply didn’t teach him. Plus, we largely devote our evenings and weekends to spending time with him and his sister, so they get a full helping of loving and nurturing care.

My feeling is that if you can afford a daycare that meets or exceeds the standards you would set at home, then daycare is a reasonable option. However, if you’re working a low-wage job where you can only afford a very low-cost daycare, it’s probably beneficial for both you and your child to look at being a stay-at-home parent, particularly if there is additional income at home.

Trent Hamm
Trent Hamm
Founder of The Simple Dollar

Trent Hamm founded The Simple Dollar in 2006 after developing innovative financial strategies to get out of debt. Since then, he’s written three books (published by Simon & Schuster and Financial Times Press), contributed to Business Insider, US News & World Report, Yahoo Finance, and Lifehacker, and been featured in The New York Times, TIME, Forbes, The Guardian, and elsewhere.

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