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Childcare Cost-Benefit Analysis: Not Always (or Ever) Easy

Written by Sarah Gilbert - 6 Comments

Childcare Cost-Benefit Analysis

This is a guest post from Sarah Gilbert.

Every once in a while, I’ll get swept up in the idea of a job. A friend will post something on Facebook or e-mail me a job description or I’ll just come across it, in the way we do these days — on the internet, it’s sure — and I’ll engage in desperate mental flirtation with the concept of me as (who knows)…

The executive director of a farm-centric non-profit, or the half-time marketing manager of my friend’s startup, or the web editor of a bike culture magazine, or even the farmer’s market counter girl for another friend’s chocolate shop. I’ll come up with all the ways I could fit this into my life (how do I still find time for the personal finance writing? The book I’m working on?) and figure out how I’d be able to save some of the income and then…

Childcare. Uh-oh.

Childcare is the profit-killer

I had a dream. Or, I have one regularly, typically involving barista spots at Starbucks or local coffeehouses, or getting up at 6 a.m. Saturday to sell vegetables at the farmer’s market. While I have an MBA and could get a high-pressure all-of-my-mental-energy job for six figures (and 60-80 hours a week), I’ve chosen to focus more of my mental energies on my kids and writing while they’re young. Food retail jobs, I’ve mused, would be a great way to earn a little money being around things I love (coffee, local food) and enjoying that precious opportunity to observe humanity! I am, at heart, a novelist.

Kids are expensive, and Saturday morning crack-of-dawn childcare isn’t cheap, though; I pay $10 or $12 an hour for those babysitters who would be willing and able to arrive before dawn. Unless I was paid $20 or $25 an hour (laugh along with me), I’d barely net enough to buy a couple of bunches of kale, let alone my favorite locally-raised-and-cured bacon. I’ve calculated, as I’ve biked to far-away events, that every 10 minutes costs $2 in child care. Great idea! But I can only “afford” to do jobs that pay professional rates.

Childcare costs are not the only thing

I spent five minutes intensely in love with the bike magazine editing position. The price seemed right, and I was skilled at all the duties the job description mentioned. The job was supposed to be “three hours a day” and I figured I could do this while my two older boys were in school. That just leaves my four-year-old! My sister’s been offering to watch him for about $4 an hour during the day. I’d have to get him there and pick him up, meaning my other two free hours would be used up in that. So I’d spend all my “free” time, needing more (and more expensive) child care for my other commitments and passions, and that would just be if I was, indeed, able to fit the responsibilities into those three hours — an assumption I doubted highly.

It wasn’t just the money this time. I would make a reasonable “real hourly wage” thanks to my sister’s bargain offer; less than that retirement-fund-growing goal I’d had in mind, but more than two bunches of kale. But I’d lose nearly as much mental space and most of my after-bedtime bonus time — when I usually do my for-love writing — as with the MBA-quality job. For a net of less than a thousand dollars a month. I dropped that dream job opportunity like a bad lover.

Sometimes, the opportunity is worth the opportunity cost

I’m not always so ruthless with my childcare cost-benefit analysis, and you shouldn’t be either. There are plenty of reasons why I might want to give up all my mental energy or work a job that netted me a bagful of organic vegetables. Take the marketing job at a friend’s startup; if my husband hadn’t been deployed halfway across the world, I probably would have gone for it. The job wouldn’t have made me a ton of net income, but I would have been able to deduct my childcare expenses on my taxes, and more importantly, I would have had some great resume-building experiences.

If my goal for the next five years was to get my kids off to school and find one of those MBA-quality jobs, I’d have been crazy not to take any position that allowed me to pad my resume without giving up much time with my kids.

And if my goal had been that non-profit executive director job (one I would so love), I think the farmer’s market position would have been a great door-opener. Working elbow-to-elbow with the leadership at the farmer’s market would prove my dedication to farming as well as making great connections in the local network of food-and-farms folks.

Juggling motherhood and money ain’t easy

Making a decision to devote your emotional self to your kids in the midst of the would-be-best years of one’s career isn’t easy. It can often mean some very difficult decisions — turning down great opportunities or realizing that rich sources of extra money are really money-losing after you count in the backs and the forths, the after-bedtime extra work, the “friction,” as I like to call it. But that doesn’t mean you should say “no” to everything, as long as you’re doing it for the right reasons — and remembering to keep a little of your mental energies to devote to yourself!

It’s hardest of all to be a mom if you’re not holding a little back — money, time, and emotions — just for yourself.

Published on April 10th, 2012
Modified on May 16th, 2012 - 6 Comments
Filed under: Frugality, Self Employment, Working

About the author: Sarah Gilbert, blogger by trade and finance geek at heart, has worked in investment banking, dotcom management, software development, and managing blogs on everything from babies to stocks.

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6 Responses to “Childcare Cost-Benefit Analysis: Not Always (or Ever) Easy”

  1. 1
    J Marie Says:

    I’s never an easy decision to make. Great article.

  2. 2
    Lillian Says:

    I’ve been through this same scenario a ton of times in the eight years that I have been a stay-at-home mom. Everytime I think that a job may be a fit for our family, the logistics of it all, make it not worth the effort.

    Time and time again I have found a job that I think maybe will work only to try and figure out how it would work with the kids school schedules, early release days, many school vacations etc. Not to mention the money factor of would I really be earning anything take home after having to put my kids into afterschool care or before school care? The answer was always no.

    However the perfect job has finally presented itself. Part-time teaching opportunity, two days a week at a preschool that runs on the same schedule as my kids school does. Vacations off, and I would be able to drop my kids off and pick them up before and after school with ease. I’ll take it and the money is just a bonus since after being out of work for eight years I really needed some sort of job experience. This will finally work!

  3. 3
    Smith Says:

    I don’t have children, but I have heard this discussion from many friends and family members. It annoys me that the cost of childcare is always considered strictly against the stay at home parent’s potential wage. If you want to be a stay at home parent, I completely support that. But I’ve had numerous friends feel *obliged* to stay at home until all of the children are in 5 days a week, 9-3:30 school. Not because they strictly want to, but because most/all of the income they earned would be “lost” due to paying for professional childcare.

    In the meantime, these stay at home parents:
    * aren’t building retirement savings
    * are at a huge disadvantage when it comes to keeping current with new developments in their fields
    * often feel starved of serious adult conversation, personal time, etc
    * often find themselves given even greater home-based work loads than reasonable because they’re home all the time (such as doing all of the house work, but also being asked to host Christmas lunch or cook all the things for some other event…)

    Along with believing that parenting should be carried by all the parents in the equation; I believe that the immediate costs of childcare should be considered a family expense, not just one against one wage. Even if you are going to consider it against a single wage, the stay at home cost should have some accounting for the loss in retirement savings and marketable skills. Which I’d put at 9% and 30% of the pre-baby annual wage respectively.

    Don’t sell yourselves short. Staying at home has *huge* costs, it contributes to the wage gap, it contributes to women having significantly lower retirement savings than their male peers, it makes things devastating if you end up being a single parent and you haven’t worked for the last 10 years (even if you were a high powered lawyer or doctor beforehand). Children are expensive, but they’re a family expense. If you want to work, plan around the costs of childcare as a family, don’t let it be used as an excuse to keep you out of the workforce despite your wishes. If you want to be a stay at home parent, be aware that you’re saving a lot less than the cost of childcare.

  4. 4
    Em Says:

    I don’t understand the reason for this article. What is the writer trying to say here? That child care is costly (no we had no idea!!) or that you should think before having children (no really!!!) or…
    What…
    The third comment says it all, this article only perpetuates the idea that women who decide to stay at home for the sake of children as noble as it is are only damaging themselves…
    Being good at calculating the cost it not helping

  5. 5
    Heather Says:

    I didn’t have a child to pay someone else to raise him. As such, I am working diligently to find a way to be able to stay home with him next year (I took maternity leave and my husband is currently on paternity leave; we’re both teachers).

    Damaging myself? In sheer financial terms, maybe. But I can still save for retirement even if I’m not employed. I can still keep up with what is going on in my field (which, at this point, is all ridiculous BS that I’d rather not be abreast of anyway).

    I’m not a fan of the condescending tone, as if being a burned out, tired, no-time-for-myself super-mom is somehow better than taking a few years off, setting a solid foundation for my boy, keeping some sanity about myself.

    I was more foolish for not opening a retirement account when I started working than I am for staying home with my baby.

  6. 6
    Jennifer Says:

    The balancing of income vs. childcare is really important when it’s a job that won’t further your career… or if your career path can withstand a few years off. And some people simply can’t afford to lose money on childcare for the sake of having a job. And this is not only about mothers. After my son was born, it was my husband that stayed home until he found evening work.

    The whole discussion is about priorities. Is having a job in your dream career field important enough that the increased earnings is counterbalanced by childcare costs? If so, then go for it… if not, stay home. Neither decision is better or worse than the other.

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