Can You Afford To Stay
Home?
By Sharon Davis
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 quite surprised.
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 (after expenses).”
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 daycare.
Many families hire a housekeeper or gardener to keep
up on the household work that they don’t have the time to do.
A significant factor is your taxable income. A second salary can
push your taxable income into a higher tax bracket.
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.
© Copyright 2001 Sharon Davis.
Sharon Davis is the Mother of two girls, the owner of 2Work-At-Home.Com
and the Editor of the site's monthly ezine, America's Home. In her
spare time she reminisces about what it was like to have spare time.
To subscribe to her free ezine, Click Here
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This page last updated:
Wednesday, October 19, 2005 11:05 AM
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