Does it pay for both parents to work?
By Gordon Powers, Sympatico / MSN Finance
Does it pay for both parents to work when the kids arrive or for one to stay home? Well, there's clearly no right or wrong answer.
Lifestyle issues aside, when considering whether two paycheques will pay off, you have to figure out how much of the lower earner's salary will be eaten by dual-income expenses. For instance, the "working tax" on a second income includes childcare costs, work-related expenses, lost perks, and additional household costs. You may also find yourself in a higher tax bracket where you end up giving the government a bigger percentage of your overall family income.
Childcare is likely to be the biggest cost. Unless you live in Quebec, where full-time day care costs just $7 a day, you’re likely looking at something like $200 a week per child in the large metro areas.
Also, take into account the costs of going to work; the commute, the clothes, the dry cleaning, the lunches, and the office gifts and get-togethers – all of which can add up to several thousand dollars a year. As well, the-stay-at-home decision often morphs into a second vehicle for errands and transporting the kids.
You should save money on food, however. The biggest additional household cost that working families report is an increase in food and grocery expenses, largely thanks to ready-made lunch items for kids, salad-in-a-bag, or take-out food.
You're going to lose some perks as well. If the working spouse works for a company that offers medical, life and disability insurance coverage, you’re ok. Otherwise, particularly for someone who's self employed, be sure to factor in the costs of private coverage. Full coverage for a family of four will likely cost you around $350 a month.
Although this doesn't apply to everybody, you're going to forgo some employment perks as well, including free or at least subsidized meals or gym passes, purchasing or entertainment discounts and even cell-phone bargains – which you're probably going to need if you've been using a company phone.
If you need help crunching all these numbers, try this tool or this one.
A word of caution: These are U.S. calculators and one big difference here is the way married couples file their tax returns across the border.
Posted by: Old mother | Aug 18, 2021 12:05:36 PM
I stayed home with our first child for two years. Then it was up at 5, on the bus at 6, work at 8 home at 5 clean the house, cook the meal, clean the kitchen, bath the child, spend quality time with child, fall into bed exhausted...rinse, repeat. When I got pregnant with our second child 3 miscarriages and 6 years later I decided to stay home. I stayed home for 12 years. I volunteered at the school every day, grew my own veggies, never went on a holiday, found numerous ways of stretching my budget including second hand clothing and bulk shopping. It was and still is a tough life. I see my friends living quite comfortably having paid off their mortgages, contemplating retirement and travelling the world. Would I change my decision to stay home if I could? No way. What I would change is how I approached marriage and child-bearing to begin with and put away more money before having children. Staying home with your children is worth every boring, heartbreaking, joyous, lovely second.
Posted by: FrankTalker | Aug 19, 2021 9:04:49 AM
Both parents working hasn't helped with affordability. All it has done is help drive up the price of homes because couples now factor in both incomes when calculating the monthly cost and making an offer (traditionally only one income was used).
As a result, couples are still in debt over their heads, have no discretionary income, and young singles can simply no longer afford a home to move out into.
Posted by: Steve | Aug 20, 2021 7:35:45 PM
The fact that there are more than a few households where both parents work has skewed the cost of housing resulting in the undermining of traditional families. So if only one parent works, home ownership and vacations are off the table. If both parents work, retirement $$ will be needed to pay for psych help for children who's parents had lower paid help take their place. Heads you lose, Tails no one wins. This is progress
Posted by: Lisa | Sep 1, 2021 4:13:14 PM
I am one of the few parents left in my generation who decided to stay home and raise my own children and not get someone else to raise them. ie. daycare.
The only thing I feel my family missed out on was a social life which "after school" activities create.
However, the upsides to not having that particular social life, are many. My children are both A students with great goals for their future incomes. Our family is NOT running around in "after school" hours, so there are set bedtimes, and OUR family is NOT sick for most of the school year because of "practice" of some sort. Also, we aren't wasting money on hockey or baseball, or football, or whatever...and from what I've heard, those sports are alot of money!
It seems that even though our family is in the "minority"...we may have been the ones, who came out on top, in the long run.