Childcare costs - can I go back to work?

[weaselbudge]

Hi, I am a SAHM with two children under 2. I have a job interview after lots and lots of searching! It is 18 hours a week and the job of my dreams. The only problem is that I don't see that I can make it financially worthwhile. It would be £30k pro rata i.e. circa £15k for 18 hours. Realistically I would need to work these hours over 3 days because of commuting time which would mean paying for childcare for two babies for three days a week on £15k. Currently childcare is looking like £1000 per month which means after commuting costs and tax I would hardly break even. Is it possible to make any money? I can't believe every mother in this situation earns over £30k or gives up work! I live in the Bristol area..

Mothers are often in this situation, IMO it is still worth working if the experience you gain could help you to be promoted or paid more over time, but not otherwise.

E.g.:
2 years of working with all salary going on childcare but promoted from trainee solicitor to qualified solicitor = worth it.
Same but working on a factory packing line with no promotion prospects ever = not worth it.

If you and your OH can get childcare vouchers that would help reduce the cost to you.

Mind you it would still be worth someone doing the factory packing job if they enjoyed the break from the kids and the conversation and colleagues.

Also as is often put across on MN threads of this nature, childcare is a shared cost between 2 parents so if you think of it as 50% then you take home more than you think.

At the moment our childcare costs exceed DH's earnings to the tune of about £500 p.m. but I am not forcing him to be a SAHD, he enjoys his work and has every right to do it so that means we both work (well, I'm on mat leave at the moment, but that's how it will be).

I would definitely go for it if its the job of your dreams.

Yes, it's perfectly normal for many people to only break even, or even lose out, for the few years that you have several pre-school age children. But then a good job is about so much more than just the money. Look at the long term investment. Also, you might find yourself desperate to work once your children are at school, and you don't know that such a nice job will come along again then.

Another thing - you will get a certain amount of free childcare once the child turns 3, which makes it even more worthwhile these days to work.

The childcare split 50% with your DP is a great comment! Also, in the longer term, you going back to work now increases your long term earning potential and your pension entitlements.

If the cost over and above your salary is something you cannot afford in the short term, and you own your own home (or are a minority owner with the bank owning a large stake!!) you could consider a mortgage holiday for a year or transferring to an interest only mortgage for a year or two until the childcare costs reduce.

you know when we say childcare costs are 50%, but i never get that. could someone explain please.childcare is only needed if the 2nd parent chooses to work. so it is all down to her.

in this case, if her dh works op need not pay nursery fees. only if she works do they need to. her dh is not relevant to whether she has to pay childcare. so her job has to justify the childcare costs.

not hers necessarily, it could be her dh's but one of them needs to.

I think it's a way of looking at it which starts from the basis that both parents might actually want to work, and that it isn't about one job having to 'justify' the childcare costs.

Eg, suppose the husband earns 30k, and the wife earns 10k and childcare costs 12k. Both parents might want to work. They might do interesting and useful jobs. Why should it be deemed that the wife shouldn't be allowed to work, or should have to justify earning more than 12k? The whole family pot would be 40k, minus the 12k = 28k. Or, as you rightly point out, the husband only could work, there would be no childcare, and the family pot would be 30k.

It's about recognising that work isn't just about finances, it's about long term investment, happiness, stimulation etc. Also, a parent may feel that their child is benefiting from the childcare anyway. Eg my children went to a fantastic nursery, which I would not have been able to afford if I hadn't been working, so in a sense, you could turn it on its head and say that going to work enabled me to benefit my children in this way.

P.s that was in response to Oblomov's question, about why many people choose to see childcare as a joint expense.
If you view working as purely about paying the bills, and derive no other satisfaction from it, then yes, I can totally see that your aim will be to just to bring in money, and if childcare is the equivalent(or more) of one person's income, then you would be more likely to have a parent at home, unless you collectively earn signficantly more than childcare.

When there are a lot of other factors involved in working (eg the OP says this is her dream job) then it often helps to look on it as a joint expense which enables you both to work.

oh violet, i get all of that. working may make you happier. but when we get down to the nitty gritty, ie. we look at a post such as this. which is based on money. as it is for many decisions. is it worth my while to work. then it does come down to money , doesn't it. and as i said normally the childcare needs are based on only one partners wish to work. as it is op's dh already works. and she does not. teh don't currently need nursery. only if she chooses to work do they need to childcare. childcare is dependant on her job. nothjing to do with his. so her job has to justify the childcare.

weaselbudge Does it have to be 18 hours? could it be a little more? If you have to commute and pay nursery fees for three days, it is likely that these costs are largely fixed per day. 18 hours over three days plus an hour commute each way, means your DC's would be at nursery from 8 till 4, extending this to 5/5.30 would not have a huge impact and you could be earning £2-£3K a year.

I suspect for most people that a "dream job" does not come along very often, though.

If weaselbudge is, say, 35, and retires at 65, then what we are talking about is 2 years when childcare is really expensive, 1 or 2 years in which it is fairly expensive, and then after-school club type costs after that.

So the question is whether for 2 years it is worth her working at perhaps a loss for the sake of a further 28 years of working happiness? If it really is her dream job then I would expect the answer to be yes.

If it's your dream job yes it's probably worth it. Your childcare now is expensive but once they get to 3 and then go to school, it will come right down. In the meantime you are building your career, getting you nearer an increase in salary anyway, possibly receiving contributions or contributing yourself to a pension scheme and getting all sort of personal benefits out of working. Even if you were making a small loss initially it might be worth it long term.

Exactly sleepless!

I think the decision is actually easier these days, with extended maternity leave and subsidised childcare from age 3. If you take a whole year off work, your first child will be almost one by the time you need childcare. Then it's just two years before you start to get the subsidy. In ye olden days before long ML and free nursery hours it often used to be 4 or more years of paying full rate. My eldest has a September birthday, and didn't start school til she was almost 5, so it was literally about 4 years and 8 months that I had to pay for. Didn't time that very well lol

I would definitely go back if I were the OP - a dream job is worth a lot!

"you know when we say childcare costs are 50%, but i never get that. could someone explain please.childcare is only needed if the 2nd parent chooses to work. so it is all down to her."

Oblomov - you are quite right. Childcare costs need to be offset against the earnings of the second earner, on the assumption that they only arise if the second adult in the family is out at work.

A dream job - wow you lucky thing. I would jump at it. Childcare won't cost this much for very long. Your career will last a lot longer. Your happiness and fulfillment are vital to your family so yes i say go for it.

Bonsoir / Oblomov - you are right of course that the event of going back to work does precipitate the additional costs of childcare!! Clutching at straws possibly, but looking at the household income and expenses as a whole and over the longer term, can put a different slant on things and may lead to a better solution. (could also highlight the non financial implications and identify other sacrifices that could be made instead?)

Go for it because a) dream job b) adult company c) cost of childcare as dcs get older decreases, especially once they get to 3 and once they start school d) see if you AND dh can apply for childcare vouchers (as long as not scrapped) or ask work to institute them.

This has been exactly the situation for me. Childcare costs and commuting costs almost made it negligible for me to work when my 2 dcs were at nursery but keep in mind the long term gains.

MistyB - I think it is very important to make an NPV calculation rather than just setting additional expenses against additional income in the short term, when assessing the benefit to the family of having a second income.

Obviously, you then need to talk about well-being (children's as well as parents').

I think that looking at family income and family expenses "as a whole" completely fudges the issue, personally!

Well, on the one hand, if the family are looking at the current stay at home parent to go out to work for financial reasons only then I can quite see that if no money is to be gained once additional income, additional expenditure is taken into account, that this doesn't work. And similarly if the parent is reluctant to go back to work as they'd rather not use childcare then I can understand that only a small increase in family income after expenses may not seem worthwhile. But I do think you need to look at it on a family basis.

But to say that you have to take the costs as offset against the 2nd worker (which lets face it is usually Mum) really shifts the emphasis that the mother has to JUSTIFY going to work. I'm pregnant and I've always been very clear with DH that (assuming we get to the live baby stage) once my maternity leave is up I shall be going back to work. I make good money, he makes even better money but I'd totally reject any suggestions that costs of nursery or childcare are "my" expenses rather than "ours" because I am the mother or because I earn less than DH.

Thanks for all your responses. By way of update i decided not to go for the interview after all. I thought long and hard about it but in the end the stress of it all was outweighing the potential benefits. The job was looking like it was going to be one of those jobs that says it's part time but actually is full time but expected to do it in half the hours. I felt the salary was too low for what was being asked so I was worried I would end up resenting working for a loss while the kids were in nursery! I will have to be content making jam and muffins and be thankful that i can be a SAHM as I know that actually lots of women would kill to be in my position.

Glad you reached a decision you are happy with, Weasel.

I guess the decision you reach for many women will depend on whether they take a long term or short term view.

I suspect most SAHMs take a short term view, and stay at home whilst their children are young, noting that the money does not adequately cover the costs of work.

However, I suspect most working mums (myself included) take a more long term view, noting that whilst I didn't make much money whilst my DDs were young, once they got to three the 15 hours childcare really helps to minimise my costs now (I work 5 mornings, but only pay for two), and of course, I have managed over the past 5 years to work my job round the school day, so when my youngest starts school next year I will be able to pick them up from school every day and work are more amenable to my demands for school friendly hours, because I've done my 5 years of compromise and have proved my worth. I would not get such child friendly hours in a new job, and indeed it has taken me years to really get good hours. So I balanced out 3 years of working part time, and my DD going to childcare part time Vs the next 15 years of being there to pick my DDs up from school and being able to pick my children up from school, and having a job where I largely work school hours.

Financially, for me it didn't make sense - but logically, the benefits have!