Can you afford to
A few years ago, after the birth of our second
child, my husband and I were trying to decide whether or not
it would be possible for me to stay home.
At first we thought that since we were just
about breaking even, there was no way we could ever make it
happen. But when we decided to actually put pen to paper and
calculate our bottom line with and without my salary, we were
What we found was that it was actually costing
us to have both of us working.
While that may not be the case for everyone, you
may find that the second salary brings in much, much less than
you think it does.
According to Jan MacGregor, a financial
consultant and former analyst, "There are people out there who
are expecting to be able to meet their bills better (after
they re-enter the work force) and never realize they are
either working for a loss or for something like $4,000 a year
That may seem hard to believe, but if you
consider the many "hidden" expenses of a two-income household
it is often the case. There are, of course, the obvious
expenses such as child care and commuting costs. Some of the
hidden expenses are the money spent on lunches, more take-out
and convenience food for dinner, dry cleaning bills
professional clothing. There can be higher medical costs due
to increased exposure to illnesses for children who are in
Many families hire a housekeeper or gardener to
keep up on the household work that they don't have the time to
A significant factor is your taxable income. A
second salary can push your taxable income into a higher tax
While the tax issue in and of itself does not
eat up the entire second salary, when you add in all the other
expenses of a two income family, you might find that it's not
worth it to have both parents working.
Here is a link to MacGregor's cost of living
chart that uses a second salary of $40,000 as an example: Cost Of Living Chart
If you are considering having one parent stay at
home, the best thing to do is to actually calculate your
income and expenses, taking into consideration the difference
in taxation. You may find that you can in fact afford to stay
home with your kids.
Sharon Davis, Work-At-Home expert, author and consultant,
helps people to achieve their goal of working at home,
telecommuting or starting a home business.
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