Having a Child: Financial Factors in Staying Home or Going Back to Work

It can be a tough call when deciding whether to go back to work or stay at home with your little bundle of joy after having a child. There are certainly the financial and long-term career aspects to consider, but it can be awfully hard to turn away from that sweet little pumpkin who is now such an integral part of your life.

Personally, my wife and I decided that one of us would be at home with our little one until he headed off to school. It was a choice that my wife and I made together, but not one we made without considering a multitude of various factors first. We reviewed how these factors would play not only into the raising of our child, but our future work and career paths as well.

Career Aspects

One of the factors on the top of our list when deciding who would stay home and for how long, was our individual career outlooks. Thankfully, my wife works in healthcare (a field that is relatively easy for her to re-enter if need be). She received an extensive maternity leave that left her able to stay home with our son for the first four months, and change jobs when we decided to move to a new location after this point.

I on the other hand, was looking to change careers, moving into a self-employed, at-home role after her maternity leave was up and taking over the daily parenting role. This meant that we could handle the raising of our son while still being able to pursue our chosen career paths and also save on childcare costs.

Family Planning

We weren't sure whether we were going to have another child soon after our first or not. Mostly we were just focused on successfully getting through our first child, but figured if we decided to have another go at it, financially it would be feasible since I would be home anyway. However, after finding out how much work was required with our first child (not that it wasn't worth it), we kind of petered out on the idea of a second…at least for a while.

Income Considerations

A child entering a family's life can greatly affect their income and ability to earn that income. In our planning, I was moving from a decently paying job into a role in which my income would be dramatically reduced. However, we planned to survive on reduced incomes until I was able to recover at least some semblance of my former pay. We also explored ways to keep expenses low during those first few years, since neither my wife nor I had any idea of the real expenses we might encounter after having a child.

Comparing Income to Child Care

One of the ways we reasoned we could keep these expenses low was by my pulling double duty. Childcare can be one of the most expensive aspects of raising a child, but if you're able to combine this expense with a parent staying home -- especially if that parent continues to earn an income from home -- its effects may be dramatically reduced. If the pay from a job to which a parent is returning would largely just go to cover the costs of childcare anyway, it might be more beneficial to consider staying home.

The Needs of the Child

While considering the family finances is certainly critical to determining whether or not to go back to work, there are also the needs and well-being of the child to consider. His or her health, safety, quality of education, importance of relationship building, and other aspects of a parent staying home with a child as compared to sending him or her off to a daycare, are factors that may need to be considered. Such items could be more important than the possible income to be earned by returning to work and are things we took into account when making our decision.

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Disclaimer:

The author is not a licensed financial professional. This article is for informational purposes only and does not constitute legal or financial advice. Any action taken by the reader due to the information provided in this article is solely at the reader's discretion.