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Think Tank: Reconsider Caring For Your Kids Because Money Matters Most


What happens when you choose to stay at home and care for your children?

Some may argue that giving up a 9-to-5 job gives them ample opportunities to connect with their offspring and watch them grow. Even other parents might suggest that this time at home is beneficial not just to their children’s long-term happiness, but also to their own.

But not so the Center For American Progress. They’ve been crunching the numbers, and they want you to know that giving up your career to care for your children is a huge financial mistake:

While there’s plenty of data revealing how pricey childcare can be, there’s never been a way to calculate exactly how much potential income parents stand to lose over a lifetime if they choose to leave the workforce. Until now.

Enter Michael Madowitz, an economist at the Center for American Progress. He and his team at the CAP designed a calculator that shows you how much money you’ll be walking away from if you quit your job to save on childcare costs.

… Much like a retirement calculator, the CAP’s calculator factors in the basics such as your age, your salary, and the years you plan to leave the workforce. It also ties in average 401(k) contributions, expected wage growth, and the monetary penalties that may come with an interrupted career.

Here’s an example: Let’s say you’re a 26-year-old woman who makes $60,000 a year and plans to take off five years. Over your lifetime, your total income loss will be $1,030,076. Because of the gender pay gap, if you’re a 26-year-old-man making the same, you stand to lose a bit more: $1,204,194 over your life.

The numbers may sound unrealistically high — but remember, this looks at lifetime income projections, not just year over year salary. Scott Dressler, an associate professor of economics at Villanova University, found that while the calculator does make some assumptions about raises and 401(k) accumulations, they are necessary in order for such a tool to work, and ultimately, the calculator is pretty accurate. And it makes a mighty point.

Over a million dollars, guys. We’re giving up over a million dollars to clean up poop and vomit.

Well, in all honesty, those numbers don’t reflect the majority of U.S. workers: the average U.S. income is approximately $51,000 a year, and the average woman’s salary is approximately $40,000. While the calculator factors in “average 401(k) contributions, expected wage growth, and the monetary penalties that may come with an interrupted career,” it doesn’t factor in child care costs or commuting costs. There are also, often although not always, added food expenses, cleaning and housework costs, and landscaping costs associated with working outside the home.)

Villanova economics professor Scott Dressler notes, with some consternation, “Look at all these long-term expenses built in to leaving the workforce. Even if you only made enough to cover childcare, you would still be better off working because then you wouldn’t lose increases in wages and 401(k) contributions.”

Parenting Isn’t Just About Dollars and Cents

If only the reasons parents chose to stay at home were so simple and straightforward: all about the dollars and cents, the perfect calculator to determine the most financially beneficial means of childcare. Although, if we’re honest, the even better financial option would be not to have any children whatsoever. That’s because for every child a parent brings into the world, parents will spend an estimated $233,610.

But at least for me, the choice to stay at home had very little to do with the money I could or couldn’t make outside the home, and everything to do with the opportunity it gave me: the opportunity to love and care for my daughter, to invest in her wellbeing and to steward our place—our home, land, and neighborhood. It was a qualitative, not a quantitative choice.

It meant that I would get to spend my mornings making my daughter breakfast and reading her books, working in the afternoons while she naps, and putting together a homemade dinner every evening (sometimes, when luck would have it, with some fresh produce from the garden). I haven’t sat down and crunched all the numbers to see if we’re making more money than we would be if I were working in DC, commuting every day. (I doubt it, but with Virginia’s childcare costs, you never know.) I can tell you, however, that our quality of life has been pretty good over the past couple years: I’ve gotten to make homemade meals far more often, to spend more time with my husband on average, to care for my daughter and grow close to her.

That isn’t to say I can’t imagine a different life: one where I drop my daughter off at child care, commute into the city, and spend the evenings catching up with her and my husband. The primary difficulty I see with that life wouldn’t necessarily be the monetary loss, but the time loss: time lost to commuting on the DC metro or in rush hour traffic (no thanks), time spent trying to catch up on laundry, housework, and meal prep on weekends, time spent picking up and dropping off our daughter at daycare, etc. Some people don’t mind all that. But for whatever reason, I thoroughly enjoy every single part of stewarding and caring for my home.

There’s also an opportunity cost associated with spending these vital years in our childrens’ lives away from them. On the one hand, it’s true, I am now less likely to get the financial rewards associated with full-time work. Without geographic proximity and unlimited hours to devote to my career, I’ll lose some benefits.

But on the other hand, if I were working full-time, I likely would’ve missed getting to see my daughter walk for the first time. I wouldn’t get to teach her to dance, or to say the ABCs. I wouldn’t get to cuddle with her every morning, or take her to the park and teach her how to go down the slide. I wouldn’t get to make a from-scratch dinner for my husband every night (I know, super backwards and traditional of me to prioritize expressing affection to someone I love).

Parenting Isn’t Something You Can Plug Into An Equation

Ultimately, the decisions we make as parents are going to be incredibly specific and personal, qualitative and quantitative. Some parents can’t afford to give up a secondary source of income. Many single moms simply don’t have the choice to work from home. But that should make us even less eager to plug parenting into a calculator, to see what money the “average parent” loses or gains by caring for his or her children.

Those numbers are going to shift dramatically from family to family. Much will depend on the income, place, and preference of the parent(s) in question. Some may be offended at the suggestion that they make their child-care decisions based purely on financial profit. Others may be offended by the assumption that they can just hire a nanny when their second or third child comes along. Birthing and raising posterity just isn’t that simple, and neither are finances.

But believe me, every time my daughter begs for me to pick her up, and plants a little kiss on my cheek, I’m not thinking “Man, I could be making thousands more dollars if you were off in daycare somewhere.” I’m usually thinking that I’d do it all over again in a heartbeat.