• The Costs of Two Parents Working Full Time

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    cat in car seat

    Easier to get in the seat than our kid

    Ever since my wife was pregnant with our child, there was no doubt that we would both keep working full time. We thought that we had a good grasp of the costs involved with working full time. Daycare, of course, for our kid when we work, and a whole new slew of costs associated with driving. But that wasn’t all, oh no. We’ve been doing this for about a year and a half now, and, to really no one’s surprise, it’s costing us much, much more than we anticipated. Here’s the breakdown:

    Daycare

    Putting our kid in a place located just inconveniently enough to be a pain in the ass where other people can care for him for nine hours costs us upwards of $1,700 a month. Yes, you read that right, $1,700. Are there cheaper placed in Chicago? Yes. Are there more expensive places in Chicago? Yes. The daycare that we use is on the more expensive side of things, but considering the range of the cost of daycare (including home daycares) in Chicago for full-time care is $1,200 to $2,300 per month, we pay slightly over the mean.

    My wife has a dependent care flexible spending account, which allows us to allocate $5,000 of pre-tax money for daycare costs. That lowers our taxable income come tax time, which translates to a tax savings of about $1,250 a year. That can be combined with the child tax credit, but we can’t take full advantage of because of our total income. Nonetheless, we’re able adjust our withholding to increase our take home pay by a few dollars per month. Every bit helps.

    Is it worth it? Looking at the fantastic care that our child receives, we say YES. I was admittedly very skeptical at the cost, even to the point of having a feasible plan B. However, it didn’t take very long for me to see that the quality of care was exceptional. Now that we have a toddler, we can directly see the advances in development on a daily basis. The teachers genuinely care for our kid, and we have built an incredible amount of trust in them.

    There really is no right answer for how much someone “should” pay for childcare. We found the right answer for us. And this isn’t permanent! We might have to tighten the purse strings for a few years, maybe lots of years if we have many children, but they will all grow up.

    Automobile – Parking

    For a long long time, we were happy daily users of the public transit system in Chicago. After kiddo was born, that all had to end. We now schlep our kid to daycare, and then ourselves to work everyday. The price of parking in Chicago has increased a ridiculous amount in the past few years, but we’ve managed to find parking that doesn’t completely break the bank. Not only that, but it’s close to our work; next door to my wife’s work, in fact. For the privilege of parking our car in downtown Chicago, we pay $200 of pre-tax money per month ($2,400 a year); my wife also has a flexible spending account for parking costs. That offsets our costs a bit by saving us around $600 in taxes.

    Automobile – Gas

    Quiz: What city in the USA has the highest gas prices? CHICAGO. Yay. For a while we used our trunk to store our 25-pound stroller; we took it out once and didn’t put it back, and lo and behold we got better gas mileage. Back then we were paying around $50 per week in gas, but since the removal of the stroller we’re filing up about once every week and a half. In addition, we’ve found some strategies for saving on gas. Let’s call it a total of $150 per month for gas.

    Automobile – Maintenance and Being Stupid

    We have a 10+ year old japanese compact car. We’re fortunate that it hasn’t needed any maintenance above and beyond what is recommended. Oil change every 3,000 to 5,000 miles, fluids replaced whenever they need to be, tires rotated, whatever. The total cost of maintenance is probably around $300 per year if there’s no major things to be done. Our commute is still short enough that we’re not racking up a huge number of miles – maybe 300 miles per month – so maintenance costs will continue to be low.

    However, that doesn’t account for stupid driving mistakes. I’m the primary driver in our family, and I’m far from being a perfect driver. But sometimes, I swear, a pothole or a curb will pop out right in front of me, and then BAM, I’m changing a tire. Fortunately, these incidents haven’t happened too much, but it does cost time and money to get these problems fixed. Add another $200 a year.

    Coffee

    Before parenthood, I didn’t feel the need to be constantly caffeinated. Amazing what a few months of sleep deprivation will do. Each morning I fill coffee cups before we get in our car. We pay $15 a week for locally-roasted coffee which we grind at home, for a total of $60 a month on coffee alone. That amounts to a small savings over buying coffee everyday from a coffee shop, but we’ll take all we can get.

    Conclusion and Rationale

    Here’s the questions you’ve been waiting for: does having both parents work offset the cost of childcare related expenses? The answer is…not really. My wife’s take home is a little over $2,000 a month.

    So why does she keep working?

    Because she’s passionate about her career. Because she works at one of the top firms in the world in her field. Because she can work with some of the smartest people on Earth. Because she can contribute to a retirement plan. I’m of the same mind.

    That said, we have no idea what will happen if/when we have more children.

    Are you a two parent working full time household? How have you handled the costs and other challenges of working full time while taking care of a child or children?

    image: ocean yamaha

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