Wife wants to stay home with baby

[TexasNative]

We are having a son in a few weeks. My wife is a teacher and I am a Mortgage Loan Officer. We live pretty frugally. We have our cars paid off, no credit cards or debt other than our house and student loans. Our total monthly payments on the house and student loans add up to $1725. On top of that our utilities... cable.. tolltag etc add up to about another $700 a month.

My base pay is only $30,000, however I have averagedd about $95,000 over the last two years after comission. The wife is looking to give up a salary of $45,000.

I guess the thing that makes me most nervous... is on bad months I make as little as $3,000 (gross income). That's about $2,000 take-home. As long as I keep having good months to keep the average income up, I should be fine. The last three years doing this I have averaged more than enough. But you never know what tomorrow brings. I am really nervous about letting go of her income.

What are your thoughts? Have any of you been through similar transitions?

[starshard0]

Assuming you don't spend all your money once you get it, you should manage to make up for the bad months with the good ones.

Keep in mind, if your wife continues working you'll have to factor in child care.

[KevinW]

I would be nervous about these kinds of scenarios:

1. you have a long stretch of bad months due to the poor economy
2. you lose your job due to the poor economy
3. your wife stays home for a while, decides she wants to go back, but can't find a job due to the poor economy

I don't know enough about your line of work to have any clue how likely (1) or (2) are.

Does your wife's employer have a maternity leave program? My impression is that schoolteachers tend to have good parental leave benefits. If so, maybe a compromise would be for her to take a leave and postpone this decision until the end of it. The future may be easier to predict at that point.

A good job has a significant "bird in the hand" value right now, so I'd be cautious about giving one up any sooner than you have to.

Another question: some kinds of student loans have a provision to reduce payments during hardship periods. Do you know whether you could invoke something like that if one of those bad scenarios happened?

[starshard0]

Those are certainly some things to think about. Again though, you have to consider the cost of child care if you both continue to work.

[hermione]

Originally Posted by starshard0

Again though, you have to consider the cost of child care if you both continue to work.

I don't have kids so I'm not sure what the actual numbers are, but child care couldn't possibly cost so much as to make it not worth working at all. According to this site: http://www.costhelper.com/cost/child...-day-care.html

Typical costs:

• Assuming full-time day care for a 2 year old child on weekdays, according to Runzheimer International, the U.S. national average cost for full-time day care is $611 a month.
• Large cities such as Boston and New York are most expensive, with average daycare costs of a little more than $1,000 a month. Contacting two KinderCares in the San Jose area about infant day care, we received quotes of $300-$330 a week, plus annual fees.
• Cities like San Antonio, TX, and Jackson, MS, have the lowest average prices, around $350-$400 a month.

Even at the highest of $1,200 a month, that's comes out to 1/3 of $45,000. I would assume that the OP is from Texas, which according to some other charts I've looked at should be about 1/2 the cost of the expensive cities like New York, so it would probably about 1/5 or 1/6 of $45K.

[Xin Lu]

My thought is that you should let your wife try a few months of leave first before quitting her job completely. Staying home with a baby will be a completely different lifestyle. She will have no adults to talk to if she doesn't have other stay at home friends. You should also try to save as much money as possible now just to deal with possible reduced income during the leave.

I am pregnant now and my husband has thought of staying home to take care of the baby, but we decided that we can't really afford it right now. Another thing is that he really likes his job, so maybe you should ask your wife if she would miss her job if she left it before she makes her final decision.

Since she is a teacher she probably doesn't work in the summer anyway so your childcare costs would be less than 12 months. I think you guys should write down the costs and benefits of giving up the second income before deciding.

The most important thing is that you guys should agree on the decision, and you might have to make some compromise. What do you want to happen? If you don't want your wife to stay home you might feel resentful that you have to take on the responsibility of supporting everyone. It seems that you are unsure about what to do right now, so I really suggest that you talk to your wife about your fears/doubts about giving up her income.

[khorrell]

Assuming that your wife is in a traditional calendar school, she won't have to go back to work until August, right? Y'all timed this one well

Coming from the perspective of a mom who stayed home until all my kids were in school (and now I work from home), I am very thankful that I had the opportunity. That said, there were many days when I thought I would go insane from the monotony.

As I watch my sister struggle with her job, her enormous child care bills (a little over a thousand dollars a month), and her forever sick from child care germs daughter, I'm reminded how good it was to stay home.

Another compromise is to see if she can find a half-time teaching job. At the elementary level, it's hard, but there are often half-time jobs in higher grades. The downside is that she might have to switch schools to find one.

Another issue is benefits. She probably has great benefits - what are yours like? What is the health insurance situation? All important things to consider. One reason that I was the stay-at-home parent is because my husband's job has excellent benefits (and a fairly unbreakable career path.)

Good luck to you.

[RickLee]

..and see if you can make a go of it.

As a new dad, I was glad that my wife could take care of our daughter for a year at home. It is a benefit of living in Canada - one year parental leave is common.

Like your feast or famine career, I am an entrepreneur with very unpredictable income. During our baby's 1st year I was extra determined to earn good money - it added to my motivation to work as hard as my wife was working at home.

Also, our needs, wants and savings had to be frequently rebalanced to fit our income. We were surprised at how much less we needed to spend to be happy.


RICKLEE
P.S.
Almost forgot - Congratulations on your new baby!

[jalapeno]

I just have a few thoughts to throw out there. "Newborn care" or "infant care" can be quite a bit more expensive than regular childcare. And it's often harder to find. Childcare costs are in after tax dollars whereas annual salary would be before tax. I would compare costs against take home pay minus any work associated expenses. Perhaps it would be possible to cut down on vehicle expense if only one of you is working outside the home? I'm a stay at home mom and I think I'm able to cook a lot more from scratch because of it. And I save on my wardrobe.

So for an illustration, I was making about $15 an hour before I stayed at home. Childcare might be about $4 an hour for a 1 year old around here. My child would be in care for upwards of 10 hours a day (an 8 hour workday plus a 1 hour lunch break plus travel time to and from childcare). So I would make $120 a day and spend $40 on childcare. But I wouldn't actually take home $120. I would take home maybe $85 after taxes. So my net would then be $45. But then I also might go out to lunch, have a more expensive wardrobe, and drive more. So really my net might end up being $35 a day. Of course now I have three kids and it wouldn't begin to make sense financially for me to work. But my point is that you've really got to take a look at the net figures. You wouldn't be "losing" $45,000 for your wife to stay home. The net effect would be much much less.

[dschill]

Hmm is there nothing she can do to work from home as well? I mean alot of women who used to have a job and quit b/c of children have skills and can usually do some part time work from home. this could possibly help enough to get you guys through those tough months a little easier.