The Cost of Working

Practical money saving tips on whether to go back to work or not.

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The Cost of Working - Go Back to Work or Stay a Stay at Home Mom

can you afford to work
The cost of working needs to be factored in to every situation where mom is considering returning to work instead of remaining a stay at home mom. Yes, it costs money to work! Some moms will be better off by finding other ways to cut expenses and by using practical money saving tips rather than returning to the work force.

Let's face it: it can be difficult to stay a stay at home mom and live off of one-income in a two-income society. Add to that the extra expenses that a new baby brings to the family, and it can be very tempting to have mom get a job for the extra income. After all, it seems hard to find ways to cut expenses; wouldn't it just be easier to make more money?

Understand this: utilizing practical money saving tips will ALWAYS be easier than earning more money- especially once we examine the cost of working. What exactly is the cost of working? Well, most people don't really think about it, but it actually costs money to work.

Childcare costs, transportation expenses, and extra taxes might be common sense, but what about some of the hidden cost of working expenses?

Clothing, take-out meals, and lost income also come into play.

In reality, how much money are you really making by going back to work instead of remaining a stay at home mom?

You may find yourself in a worse financial situation than if you were not working at all, due to the cost of working. For this example, the wonderful Cost of Working Calculator on this page was used. Let's analyze my last job outside the home, and calculate my cost of working.

Cost of Working Calculator

  • Position: Lead Bank Teller
  • Hours Worked: 40 hours week/no overtime
  • Hourly Wage: $11/hour
  • Bonus: $1000/quarterly
  • Average Monthly Gross Income: $2,100 (including the bonus)
  • An extra $2000 a month was very attractive, especially with two kids in diapers. But now let's calculate my cost of working.

    Taxes
    Because I was contributing an extra $25,000 a year to our income, we were no longer in the 15% tax bracket, but had moved up into the 25% tax bracket.

    This brought my net monthly income down to $1,575.

    Daycare
    I had two children, both daycare-aged, at the time. Full time daycare in our area was running $325 per month, per child. A total of $650 a month for daycare.

    Transportation
    This would include a vehicle, maintenance, gasoline, car insurance, etc. To make it easier to calculate for this example, I am going to just use the $0.345 a mile that the government allowed as a mileage reimbursement at the time I was working. (Currently, this mileage reimbursement is over 50c a mile). I drove 5 miles everyday to drop the kids off at daycare, 6.5 miles from daycare to work, and back again, every day. This would be 23 miles a day, 20 days a month. Total 460 miles per month, or about $160.

    Lunch expenses
    This was a big one for me. I ate out every day. With so much on my plate: work, taking care of two children, taking care of the house, etc, packing a lunch was the last thing on my mind. So I typically spent $5 a day on take out food. That's $125 a month.

    Clothing/Dry Cleaning Expense
    I am not too big on buying clothing that requires dry cleaning, so I did not have this expense. I did, however, find myself at a job which required dress clothes. My monthly clothing budget was $75 a month, including multiple sets of pantyhose.

    Dining Out Expenses
    Again, this was a real pocket drainer for me. I'd get home after a 10 hour work/commute day, with two over stimulated children, a messy house, and an irritated husband (he worked 60-70 hours a week, salary). I simply did not have the energy to cook every night. A conservative cost for weekly take out at this time in my life would have been $50 a week, or $200 a month. I realize that is high for many families, but that is how it was in our family, after I chose to examine our spending.

    Miscellaneous Expenses
    Miscellaneous expenses might include things like: loss of income when I had to take off work to take the kids to the doctor, because they had gotten sick at daycare. Add to that the co-pay at the doctor's office, plus the cost of prescription antibiotics.

    Or how about the costs of disposable diapers? I had been putting my children in cloth diapers at home, but the daycare centers would not use them. So I had to purchase diapers each week for my babies to use at daycare. Not to mention the fact that I was supplementing my youngest with formula, because I could not pump enough breast milk to provide for her throughout the day.

    Then there are things like buying gifts for bosses or co-workers at Christmas. Or the inevitable $10 here and there that you are expected to contribute for birthday cakes or flowers and the like when another employee is the beneficiary.

    Or how about the $20 you are guilt-tripped into spending on someone's kid's school fundraiser? And the $10 in office supplies you buy out of pocket because your company forgot to order more pens?

    All these little expenses add up. For the sake of this example, let's say that these expenses equal just $50 a month.

    This brought my monthly expenses to: $1,260.

    So, my income, after taxes, was $1,575 and my expenses for working were $1,260. That left me a profit of $315 a month, or just $1.96 an hour!

    I worked hard, from morning to night, day after day, having some stranger watch my daughter take her first step, so that I could earn a measly $2 an hour???


    To me, it just wasn't worth it. Try the calculator yourself. I'm sure there is a position that you have considered, probably recently.

    How much did it pay? How long would your children be in daycare? Plug in the numbers and see what the Cost of Working would be. You may be surprised.

    You noticed in my example that by me working, it put us in a higher income tax bracket. Keep in mind, when figuring your cost of working, that some people qualify for the Earned Income Tax Credit. Often, when mommy goes back to work, the family no longer qualifies for this substantial credit. So, if you are one of these people, make sure you factor in the loss of this benefit as well.

    Let me be very clear here:
    On the great debate on whether it is best to stay home with your children or to work for a living, I do not think there is a right and wrong answer. This is a decision that each family needs to make for itself. Our family feels that it is best for me to stay home with our children, partly because of the cost of working, but mostly for other reasons. That may not be the same for your family, and that's fine! There is nothing wrong with families who for one reason or another have two working parents, or a single parent who needs to work.

    Just make sure you fully analysis whether it is financially worth it to work outside the home before you assume that you cannot survive off one income.

    Does it make sense for you to go back to work? Why or why not?

    tell us what you think



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