Wondering if it might just be cheaper to be a stay at home mom than continue to spend your paycheck on daycare? Here’s how to tell!
In a Nutshell:
Being a working mom is crazy hard work! At some point it may be cheaper (and easier!) to be a stay at home mom. To figure out if it’s cheaper for you to stay home, take your monthly income and subtract your monthly childcare cost from this. Divide that number by the number of hours you work per month and see how many dollars per hour you’re really making at work. If the amount of money you’re making at work is less than minimum wage, it may be cheaper for you to quit your job and become a stay at home mom with a small side hustle.
Is it Cheaper to be a Stay at Home Mom?
After a certain number of children, the cost of daycare does become more expensive than the the income you’re bringing in. The number of children it takes to tip that scale depends on your monthly income and your monthly childcare expenditure. For example, if you hire a private nanny, but are making minimum wage, likely you can’t afford childcare for more than one child. If you are making six figures, however, you could afford quite a few more children. If you switched to an in-home daycare, you could afford even more since these are typically cheaper options.
To determine if it is cheaper to be a stay at home mom or to continue to work, take your monthly income and subtract your monthly daycare costs from this. Make sure you include any additional costs outside of base pay like extended stay or early morning care if you are using these options. If your income is less than your cost of childcare, it is cheaper for you to quit your job and stay home.
Is it Worth it Financially to be a Stay at Home Mom?
If your monthly income is still more than your childcare cost, it may be cheaper for you to work. but is it worth it? Finding your hourly rate of pay after daycare costs may be helpful. To decide if your job is worth your time, take your monthly income and subtract your monthly childcare cost from this. Divide that number by the number of hours you work per month and see how many dollars per hour you’re really making at work. See image below for a visual of this equation. If the amount of money you’re making at work is less than minimum wage, it may not be worth your time and effort.
The Hidden Costs to Being a Stay at Home Mom
There are of course some additional costs to staying home, however, these are minimal. If you were previously working out of the home then staying home will mean you use more electricity for cooking and lighting and more water for bathroom breaks. Typically these are minimal costs. Additional costs may pop up depending on how you choose to spend your time at home as I talk about below.
Other Financial Considerations of Being a Stay at Home Mom
If you choose to stay home, you’ll have more time on your hands than you had balancing work, daycare, and home life. Now you’ll be home for naps, and you’ll sometimes be able to get housework or shopping done with the kids in tow. However, what you choose to do with this extra time will either help you or hurt you financially.
You may have seen the many many moms on Instagram posting pictures of them and their children wandering Target with their Starbucks. Walking around stores as a way to kill time when you don’t need anything is the fastest way to spend money you don’t need to spend! It’s only cheaper to be a stay at home mom if you continue to keep finances in check. A better way to spend your time may be watching for sales, learning to coupon, using cash back apps, or cooking more from scratch to save your money.
Although you will have extra time, its not likely to be vast amounts of free time. Each week will have it’s own challenges like errands, playdates, illnesses, and other obligations. If you find that you do have more time or “margins” in your day, you may also consider picking up a side hustle for extra income or extra “fun money.” I’ve personally tried reselling clothing on Poshmark and Mercari, grocery shopping for Instacart (after the kids go to bed or on weekends), and selling baked goods. All of these can be easy ways to pickup money without being tied to a permanent schedule.
The Stay at Home Budget
Are you interested in being a stay at home mom but worried about finances? Most moms are! That’s why I created this free comprehensive guide to taking a look at your budget. My guide also comes with conversation starter questions for you and your husband to discuss risks and benefits as well as get on the same page about needed sacrifices. You can grab my free budget below.
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