Graduated Learning: Life after College

I got my degree, I got a job…now what?

The Cost of Having Children April 7, 2019

Filed under: baby,Personal Finance — Stephanie @ 8:45 pm
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Every once in a while I come across an article talking about the cost of having children. Many posts try to advise you on ways to save.

Get clothes second-hand!

Use cloth diapers!

Don’t buy many toys! Just give them a cardboard box to play with!

I get it. We try to save on lots of kid expenses, too.

We’re fortunate to have very generous family and friends who love spoiling the kids with lots of new clothes, books, and toys. And especially with our second kid, we’ve gotten lots of hand me downs from his older cousin. We go to the library a lot, too, to find new books to read.

But when it comes to having kids, there are so many other costs to consider.

I’ve discussed before how we’ve decided to send our kids to daycare full-time while my husband and I both work. Overall, we still come out ahead, but this year alone we’ll be spending over $45k for our two kids to be in daycare. We’re lucky that we both have well-paying jobs that make this the more obvious choice for us. So many parents have a much harder time coming to a decision of how they’ll deal with child care, if they find the cost of childcare too overwhelming. Stay at home parent? Alternating shifts so someone is always home with the kids? Having grandparent or other relatives help out? A combination of every option?

On top of that, let’s add medical costs: Add in the costs of labor and delivery (and prenatal care that may not be part of your health insurance plans) plus the kid’s medical needs and health insurance premiums.

You’ve got to keep them fed! Starting out with formula and/or breastfeeding (which is only “free” if you consider the nursing/pumping mother’s time to be worthless) then healthy foods as the kids get older. (Though luckily there are programs like SNAP and WIC for lower-income folks to at least help keep them fed).

Some people can still live in the same place that they did before they have kids, but many families find they need to move after having kids, either due to lack of room, to be in a safer neighborhood or better school district, or need to be closer to work/daycare to make sure they’re spending less time commuting and more time with their kids.

And even if you get hand me down or second-hand items for clothes, books, toys, furniture, etc. you still will need to buy some items new: car seats and other safety gear are not something to take a chance on used. It’s possible the car seat has been recalled, and even if it hasn’t been, car seats have a finite life due to degradation of the plastic and other components over time.

Last year, I sparked quite an interesting conversation with this tweet:

I got so many responses, some sharing that their careers shifted significantly after kids, some for better, some for worse. Others said having kids had no impact on their careers. Alyssa at Mixed Up Money wrote a whole blog post inspired by my question.

And then Bridget chimed in with her own experience, and I felt that her response aligned closely with what I wanted to say. While she is a single mom and I’m married, we still had similar experiences of having to opt out of longer hours, business trips, networking opportunities, etc just because it’s so hard to navigate the childcare situation (and the utter exhaustion of parenting). While I’m able to trade-off on daycare drop offs and pickups, it’s more difficult when my husband has his own business trips and meetings to attend as well.

So, add to this discussion the idea of opportunity cost: are you working less, missing out on potential promotions and career paths due to having kids? You may be completely fine with this, but it’s something else to consider.  Right now, I’m working part-time with flexible hours, which really helps with my work life balance, but also means I can’t always get as much done as my colleagues can.  And I took 12 weeks of partially paid maternity leave for both babies.  So overall this means less time at work, less money earned, and potentially fewer growth opportunities.

I’m not trying to be negative about all this, or try to convince anyone not to have kids. I absolutely adore my kids, and all of these “costs” are totally worth it for me. If people want to have kids, they should!

But I get tired of people claiming that kids are cheap because they don’t buy a lot of “stuff” for them. Or fail to include the costs of childcare (or dropping out of the workforce to care for the kids full-time). And like I talked about in my latte factor post, the big expenses like healthcare and housing are still unavoidable and going up.

Kids are only inexpensive if you don’t include all of the expensive things.

I realize how much of my observations may come from a place of privilege: we make good money so daycare (even at high prices) makes obvious sense. And some families have no choice but to make certain difficult decisions about kids, childcare, housing, and other things because they don’t have the financial wiggle room that we do.  And I know people have found so many creative ways to make it work, and I’m glad that they have.  But it’s not always easy.

Also, my observations are based on the United States, where certain policies (or lack thereof) for (paid) parental leave, healthcare, and childcare have a big impact compared to other countries with a much more comprehensive safety net.

Society needs people to have kids.  They’re our future teachers, healthcare workers, mechanics, leaders, scientists, cooks, and cleaners. And our future taxpayers. Hopefully some reforms will come that make having kids less of a financial burden for so many people.

How have having kids impacted you financially?  What changes have you made to make it all work?

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The childcare decision revisited March 9, 2018

When we had our first child, it was pretty obvious that we’d both keep working.  I took the full 12 weeks of maternity leave allowed through FMLA, then headed back to work.  As I’ve mentioned in previous posts, I came back to work part-time, with a flexible schedule that allowed me to work however much I could each week as long as I worked a minimum number of hours.  This definitely helped with my transition back to work, especially when I was still breastfeeding/pumping, and even now when trying to juggle the life of a working mom along with sharing the daycare pickup/dropoff responsibilities with my husband (especially when he has a business trip and I have to do both dropoff and pickup!)

We found our daycare with help from my Employee Assistance Program, who helped narrow down choices to nearby options that had openings.  The daycare center is very conveniently located relative to both our jobs, and we’re really happy with the care and education she’s gotten so far.  And she’s happy, too!

Of course, the one thing we’re less happy about?  The cost.  Daycare is EXPENSIVE.  And I know this cost often weighs on people when making the decision:  should a parent stay home?

As I mentioned in my last post, we’re expecting again (due late May/early June) and so the discussion came up again.  Should one of us stay home?  Or should we keep paying for childcare, now for two kids?

I have plenty of friends who have chosen to be stay at home parents, for both financial and personal reasons.  They’re awesome people, and I think they made the right choice for their family.

But for us, for now, we will follow the theory that childcare is an investment.  A quick calculation shows that childcare for two at our current daycare is about 25% of our combined full-time salaries (gross pay).  Of course, after taxes and healthcare, and acknowledging that I’m only currently working around 75% of full time (so I only get paid around 75% of my salary) the percentage of take-home pay (net pay) creeps much higher.  And of course, this year, with me going on maternity leave (which is not all paid, and when paid, is not at 100% pay), and probably dropping my hours back down a bit to accommodate my pumping schedule, we will probably be spending quite a lot of our income on childcare.

But we both see good futures in our jobs, and know that leaving the workforce entirely, even for a few years, could have significant impacts on our careers.  Being away from our careers for an extended amount of time will make it harder to “get back in”, if we haven’t been in the industry for a few years.  And once the kids are in school, we’d want to be back at work, anyway.  And as this great article points out, there’s more than just the lost wages when leaving a job for a few years.  You miss out on 401k contributions (yours and your employer’s, and any of the growth from those contributions), some of your potential social security benefits, and all the raises you would have gotten.  And, with our other big expense (mortgage) it also makes more sense to have two salaries, even if one (mine) is less for a little while from maternity leave and reduced hours (as mentioned above).

On top of all the financial reasons, it’s also a personal reason.  If I’m being honest, I don’t think staying home with my kid(s) is the best choice for any of us (parents or kids).  I’ve seen how exhausted I can get from just a single day taking care of my daughter (on a day she’s sick, or daycare is closed, or my husband is gone for a weekend day for work) and I can’t imagine being able to do this every single day, especially now with an infant set to enter our lives in less than 3 months.  And my daughter benefits greatly from being among her peers, and learning every day from people who are actually trained educators.  She gets variety every day in fun (and educational) indoor and outdoor activities.  I don’t think I could offer that level of education and fun every single day!

Yes, my husband could be the one to stay home instead, as he somehow manages to survive the day better than me when he’s home alone with our daughter all day, but as mentioned above, we see other benefits to having our children attend daycare.

And of course, we could seek out a less expensive option.  Either a nanny or finding a cheaper daycare center.  But most centers around here are around the same price, but less convenient to get to which means it would still mean less time one of us could spend at work to take care of pickup/dropoff on time (which at least for me, means less pay, so that defeats the purpose of finding a slightly cheaper location).

I know everyone’s situation is different, and I wouldn’t dare judge people on whatever decision they made for childcare.  I just wanted to share how we came to the decision to continue with daycare.

I’d love to hear from you on your childcare/work situation, and how you came to that decision!

 

 

 

 

Women’s Money Week 2014: Kids and Work March 6, 2014

It took getting prompts from the Women’s Money Week list to get me back to blogging.  Sorry for my absence, I thought I had run out of things to say (it turns out I still have plenty to talk about).

Women’s Money Week is an annual week leading up to International Women’s Day.  The goal of Women’s Money Week is to discuss personal finance related topics that may especially be of interest to women.  But don’t worry if you don’t identify as a woman!  This week has some pretty good topics.  Check the list of topics here.

Monday’s topic was Kids and Work.   (and yes, I know it’s Thursday…you know I’m not the speediest blogger around) Let’s dive in.

I feel like this is something that has been on my mind recently.  I’m getting married soon, and I’m pretty sure that within, oh, an hour of us officially tying the knot, nosy folks will be asking, “so, when are you having children?” (and probably also, “when are you buying a house?”).  Part of it is just people seeing you go through one big life change and assuming that the other big life changes will follow soon after.  I get it.

The part I don’t get is why it actually matters to them.  Granted, I can be as nosy as them sometimes and hope for my friends to start having kids.  Babies are pretty  darn cute, and visiting with friends’ children can be fun in small doses.

My fiance and I both want kids eventually.  But we have no real idea when we should start having kids.  We’re both 29, so we’re probably at the age where we should start seriously considering the whole “having kids” thing.  But one thing we also need to consider is the whole “kids and work” issue.  Will one of us stay home while the other works full-time?  Will we both work and then send the children to daycare?  If one of us stays home, who should it be?  How will taking these breaks impact our career?  We’ll have to crunch some numbers for how much childcare costs vs. salary, and consider the tax brackets we’re in with one vs. two incomes, and childcare tax credits vs. dependent care FSAs.  And this is only considering the direct work/money questions.  You’d think as a person obsessed with personal finance and planning ahead, I’d have a better idea about all this.  But…not so much.

I know there are plenty of other expenses to consider, including everything the baby needs (food, clothing, shelter, DIAPERS) and then there are the future costs of college and everything else beyond the initial baby stage.  I know Save Spend Splurge has a listing of all her baby-related expenses so far, as does J.Money.

At any rate, I suppose this post is not fully focused on the Kids and Work issue…. so can I be a little more introspective here for a moment?  I see so many friends posting facebook updates about their children.  Some friends are stay at home parents, others are juggling full-time work and children.  It all seems so overwhelming, like my friends all have magical doing-it-all-and-doing-it-perfectly powers.  I suppose that’s the power of facebook, I’ll only see the good moments in their likely hectic lives.  But it does make me worry.  Will I be a good mother?  I hope so.  Will I be enough of a mature adult by the time kids come around?  Do I have to be?

I’ve heard two different sides of the “when to have kids” idea.  Either “you’ll know when you know” you’re ready, or “you’re never ready, but you have kids anyway”.  I’m not sure which camp we’ll end up in.

What about you?  Have you figured out the Kids and Work thing?  What did you end up doing?  If you don’t have kids (but you want to have them), do you have a plan?  Or are you as clueless as I am?

(Interested in seeing some more perspectives on this topic?  I really enjoyed eemusings post on the subject (we have a lot of the same concerns).  Also check out the other posts on this topic here)

 

 
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