Celebrate Life Moments
The costs of parenting: Stay at home or return to work?
A Personal and Professional Decision With Financial Implications
Deciding whether to be a stay-at-home parent is a personal choice, one based on many factors from career plans to personal preferences to family situations.
Finances often play a big part in that decision, so it's important to know the numbers when considering the possibilities.
According to the Pew Research Center, more American parents are trying to make it work. Pew reviewed U.S. government data and found that, in 2012, 29 percent of American mothers—roughly 10.4 million—stayed at home with their children, up from a modern-era low of 23 percent in 1999. Pew also found that 16 percent of all stay-at-home parents were fathers in 2012, up from 10 percent in 1989.
Here's some data to consider as you decide whether to leave the workforce and whether or when to return to work:
Cost of baby: Kids are expensive. According to the U.S. Department of Agriculture, the cost of raising a child born in 2013 to a middle-income family will be $245,340 — or $304,480 when adjusted for projected inflation — for food, housing, child care, education and other expenses, up to age 18. Further sticker shock: this does not include higher education costs. So, one of the first considerations is whether your family will have the wherewithal on one salary.
Cost of working: New parents also find it expensive to work. Childcare is the biggest expense for these moms and dads, with the average annual cost of full-time care for an infant ranging from $4,863 in Mississippi to $16,430 in Massachusetts, according to 2012 data from Child Care Aware of America. A professional wardrobe, restaurant lunches and coffees, and the daily commute are just a few examples of additional work-related expenses.
Career and earnings: In addition to the out-of-pocket costs associated with raising a child, the National Bureau of Economic Research found in 2013 that having a child costs an average of $49,000 in lost lifetime wages for women in lower-skilled jobs, due to factors such as taking time off to raise children or choosing less demanding, lower-paying work to accommodate children. For higher-skilled women, the average of lost lifetime wages was $230,000.
In addition, the Pew Center found that, among working women with children under age 18, 51 percent said being a working parent makes it harder to advance in their jobs or careers. Sixteen percent of men with children under the age of 18 reported that challenge, as well.
Divorce and alimony: Researchers at the University of Maryland found in 2012 that women’s income decreases an average of 40 percent and men’s by 25 percent post-divorce. At the same time, there are proposals in some states to reduce the amount of support that one spouse may have to provide the other after a divorce.
Clearly, the financial impact of taking a few (or more) years to raise children can be far-reaching. Understanding the true cost of being a stay-at-home parent can help you make the best possible decision for yourself and your family.
Photo: Suzanne Gibson/Offset | Gwen Moran is a freelance journalist who has written for Inc., Fast Company, Entrepreneur, The Los Angeles Times Magazine, Crain's New York Business, Woman's Day and Ladies' Home Journal.