Last year I wrote this article about working vs. homemaking. Is it worth it for a wife to work when you consider the extra car, taxes, grocery costs and/or childcare involved? I noticed that some of my calculations in the first article were off, so I updated it for 2016 with some charts to help illustrate my point.
This article was inspired by a question I've had for quite a long time. I quit my job when we got married, mostly because I could, but also because I didn't think I made enough money to make it worth keeping a second car, etc. Did I make the right choice financially?
The Analysis
What we need to find out is 1) how much money I actually save being at home, versus 1) how much money I make at a job, minus taxes, transportation and other work-related costs. A lot of "wages of a stay at home mom" articles skew the figures by saying you would have to pay a chauffeur, professional cook, personal stylist, etc. I'm not trying to make some political point here, I'm just trying to honestly answer a question. If I worked outside the home, we would still buy cheap food and drive a Craigslist car, so those are my "job cost figures". On the other hand, I'm a decent gardener and pretty good cook, garage sale shopper, hair cutter, etc. These skills are reflected in our savings. I would recommend that each family do their own calculations based on their own real job costs and stay-at-home savings. Perhaps you really do need a second income, but it's smart to do the math anyway.
This article was inspired by a question I've had for quite a long time. I quit my job when we got married, mostly because I could, but also because I didn't think I made enough money to make it worth keeping a second car, etc. Did I make the right choice financially?
The Analysis
What we need to find out is 1) how much money I actually save being at home, versus 1) how much money I make at a job, minus taxes, transportation and other work-related costs. A lot of "wages of a stay at home mom" articles skew the figures by saying you would have to pay a chauffeur, professional cook, personal stylist, etc. I'm not trying to make some political point here, I'm just trying to honestly answer a question. If I worked outside the home, we would still buy cheap food and drive a Craigslist car, so those are my "job cost figures". On the other hand, I'm a decent gardener and pretty good cook, garage sale shopper, hair cutter, etc. These skills are reflected in our savings. I would recommend that each family do their own calculations based on their own real job costs and stay-at-home savings. Perhaps you really do need a second income, but it's smart to do the math anyway.
| Job Costs: 1. Car: $1731.96 2. Food: $3544.95* 3. Other: $1,135.31 ** 4. Daycare***: $7200 (***for one kid) 5. Taxes: $4500 (30% of income) *This number is the difference between the USDA's cheapest meal plan for two people, and what I spend on groceries for me and Hubs. **This number includes random savings from shopping at garage sales, line drying clothes, and other things a job would make difficult, if not impossible. |  |
What's a Housewife Worth?
I figure that a housewife can easily save/earn $4 per hour (working 40 hrs/week, 50 wks/yr), or $8000 per year. In order to pay for job-related expenses AND earn $4/hr. for her time, a working wife without kids would have to be making at least $16,484.34 per year.
What's a Stay-at-home Mom Worth?
When that same working wife has a baby that needs daycare, she must increase her earnings to $25,844.34 in order to still be making $4 per hour for her time. Every additional daycare-aged child will force Mom to earn almost $10,000 more per year in order to pay for daycare costs.
The Difference Between Single & Married
At my previous job, I was earning $10.50 per hour. Why was it worth my time then and not worth my time now? Consider the pie chart below. When I was single, I ate a baked potato for lunch every. single. day. And for dinner I ate at my parents' house (thanks mom & dad!). As you can imagine, my food costs were very cheap (about $30/mo). My car costs were a little more, but taxes were a paltry 10-15%. I was keeping a lot of my money!
I figure that a housewife can easily save/earn $4 per hour (working 40 hrs/week, 50 wks/yr), or $8000 per year. In order to pay for job-related expenses AND earn $4/hr. for her time, a working wife without kids would have to be making at least $16,484.34 per year.
What's a Stay-at-home Mom Worth?
When that same working wife has a baby that needs daycare, she must increase her earnings to $25,844.34 in order to still be making $4 per hour for her time. Every additional daycare-aged child will force Mom to earn almost $10,000 more per year in order to pay for daycare costs.
The Difference Between Single & Married
At my previous job, I was earning $10.50 per hour. Why was it worth my time then and not worth my time now? Consider the pie chart below. When I was single, I ate a baked potato for lunch every. single. day. And for dinner I ate at my parents' house (thanks mom & dad!). As you can imagine, my food costs were very cheap (about $30/mo). My car costs were a little more, but taxes were a paltry 10-15%. I was keeping a lot of my money!
However, after we got married my tax bracket went WAY up, and there was more potential for me to save money at home. For example, Hubs' goal was to spend less than $300 per month on food... for one person. I could help with that! And there were other things I could save money on if I were to spend my time at home instead of working a job.
The chart below shows what would happen if I went back to my old job, this time as a married lady.
The chart below shows what would happen if I went back to my old job, this time as a married lady.
Of course there are a million different scenarios in each situation, and I'm not saying ALL wives who make less than $18,000 should quit their jobs. I know there are ladies out there who can make thrifty meals, resist the temptation to shop after work, and keep enough of those earnings to make a job worthwhile. But I also know that there are many women almost PAYING to go to work. Ultimately, many ladies end up keeping jobs in order to make life interesting, not necessarily for the paycheck. There's nothing wrong with that, but the fallacy of "we need two incomes to survive" really needs to be busted.
Working From Home?
Recently we asked our accountant if it would make sense for me to make an extra income with our farm/homestead. "Not really," she said, "because you would be taxed based on your entire household income. You would run into the same problem you have [with Hubs' business], in that 30-40% of your $5,000-$10,000 would come out to pay taxes. It wouldn't be worth your time." My extra income might put us in a higher tax bracket, thus causing Hubs' earnings to be taxed at a higher rate. And my small earnings would be taxed at Hubs' higher rate. It doesn't make sense any way you look at it.
Job = Fewer Frugal Hacks
The problem with going back to work (in addition to the cost of work-related expenses and higher taxes) is that your entire frugal lifestyle starts to fall apart. Working from home will give you some flexibility and remove transportation costs, but you are still spending time working. Nights and weekends are spent doing basic cleaning and basic meal planning. There is no time to shop for deals, no time to go to garage sales or garden or do extra money-saving cooking. There is no time to hang laundry on the line or go for bike rides in the middle of the day, let alone time for making gifts or other more advanced frugal endeavors.
In addition to the frugality aspect falling apart, I would have to be very, very diligent with my time in order to eat healthy and find time to exercise outside of work. I wouldn't be able to do things I enjoy every day, nor would I be able to spend as much time with my husband. Instead of both of us being "off work" at 6:00 pm, I would come home from work and still have laundry, cooking and cleaning to do. My work would never stop, and it would squeeze out any time for my beloved hobbies.
Is working away from home worth a few extra dollars? For me, absolutely not. Obviously if a lady is making $100K or something, the family can hire someone else to do cleaning and cooking and their lifestyle is not going to suffer. And there is always the option of a stay-at-home dad. But I think many times it would make more sense for a lady to quit her $15k-$30k job (that she doesn't like) if the husband is earning a lot more.
Back To the 1950's
When I say that the low-earner of the family should quit their job, I'm not advocating laziness or relying on welfare. I am advocating a return of good old-fashioned division of labor. This summer at the farmers market I read a "survival budget" put out by the local homeless coalition. This organization stated that a family of four is barely getting by on $50,000 per year.
Working From Home?
Recently we asked our accountant if it would make sense for me to make an extra income with our farm/homestead. "Not really," she said, "because you would be taxed based on your entire household income. You would run into the same problem you have [with Hubs' business], in that 30-40% of your $5,000-$10,000 would come out to pay taxes. It wouldn't be worth your time." My extra income might put us in a higher tax bracket, thus causing Hubs' earnings to be taxed at a higher rate. And my small earnings would be taxed at Hubs' higher rate. It doesn't make sense any way you look at it.
Job = Fewer Frugal Hacks
The problem with going back to work (in addition to the cost of work-related expenses and higher taxes) is that your entire frugal lifestyle starts to fall apart. Working from home will give you some flexibility and remove transportation costs, but you are still spending time working. Nights and weekends are spent doing basic cleaning and basic meal planning. There is no time to shop for deals, no time to go to garage sales or garden or do extra money-saving cooking. There is no time to hang laundry on the line or go for bike rides in the middle of the day, let alone time for making gifts or other more advanced frugal endeavors.
In addition to the frugality aspect falling apart, I would have to be very, very diligent with my time in order to eat healthy and find time to exercise outside of work. I wouldn't be able to do things I enjoy every day, nor would I be able to spend as much time with my husband. Instead of both of us being "off work" at 6:00 pm, I would come home from work and still have laundry, cooking and cleaning to do. My work would never stop, and it would squeeze out any time for my beloved hobbies.
Is working away from home worth a few extra dollars? For me, absolutely not. Obviously if a lady is making $100K or something, the family can hire someone else to do cleaning and cooking and their lifestyle is not going to suffer. And there is always the option of a stay-at-home dad. But I think many times it would make more sense for a lady to quit her $15k-$30k job (that she doesn't like) if the husband is earning a lot more.
Back To the 1950's
When I say that the low-earner of the family should quit their job, I'm not advocating laziness or relying on welfare. I am advocating a return of good old-fashioned division of labor. This summer at the farmers market I read a "survival budget" put out by the local homeless coalition. This organization stated that a family of four is barely getting by on $50,000 per year.
If you look closely at the paper, you'll see that childcare is costing this family $1100 per month. Food is also costing a whopping $592 for two adults and two small children (remember, Hubs and I eat for under $100 per month). Transportation is costing $681 per month; at least $250 could be saved there by getting rid of a second car. Those savings- childcare, food, and one less car- are equal to $20,904/yr. Add 25% income tax to that wage ($5226), and these extra expenses are taking up over half of the family's income.
This paper never even addressed the possibility that maybe Mom could stay home. It is getting to the point in this country where people think a stay-at-home spouse is a luxury, when sometimes it may be a financial necessity. In the case above, Mom can't really afford to work.
Time To Yourself
I've also talked to many stay-at-home moms who worked outside the home between marriage and kids. Some expressed regret that they continued to work after getting married, even though they didn't have to. Most people think that you must have kids in order to quit your job, and that's not true. The time between marriage and kids is special because you can be supported financially, but still have no school or work obligations and therefore plenty of time to do whatever you want. This likely hasn't happened since you were four years old, and won't happen again until you are middle aged. This season can be used to reach non-monetary goals like restoring health and fitness, learning new skills or even getting a small business off the ground.
Time For Others
Another opportunity that opens for housewives or SAHMs is the chance to volunteer, or work for free. Oftentimes volunteer work can be more fulfilling or interesting than working a paid job. If it weren't, why would people do it?
More importantly, not having a job gives me time for my husband when he needs me. If he needs someone to help him run the forklift or unload the truck, I am there. When he wants someone to talk to, I am there. When he comes home for dinner, I am there with a smile and a kiss to greet him. We work so much better as a team than we would alone.
Happy homemaking,
-Bethany
This paper never even addressed the possibility that maybe Mom could stay home. It is getting to the point in this country where people think a stay-at-home spouse is a luxury, when sometimes it may be a financial necessity. In the case above, Mom can't really afford to work.
Time To Yourself
I've also talked to many stay-at-home moms who worked outside the home between marriage and kids. Some expressed regret that they continued to work after getting married, even though they didn't have to. Most people think that you must have kids in order to quit your job, and that's not true. The time between marriage and kids is special because you can be supported financially, but still have no school or work obligations and therefore plenty of time to do whatever you want. This likely hasn't happened since you were four years old, and won't happen again until you are middle aged. This season can be used to reach non-monetary goals like restoring health and fitness, learning new skills or even getting a small business off the ground.
Time For Others
Another opportunity that opens for housewives or SAHMs is the chance to volunteer, or work for free. Oftentimes volunteer work can be more fulfilling or interesting than working a paid job. If it weren't, why would people do it?
More importantly, not having a job gives me time for my husband when he needs me. If he needs someone to help him run the forklift or unload the truck, I am there. When he wants someone to talk to, I am there. When he comes home for dinner, I am there with a smile and a kiss to greet him. We work so much better as a team than we would alone.
Happy homemaking,
-Bethany
RSS Feed
