Dual Income vs. Stay At Home

Many people have made articles about the difficult decission families face when both of them work and they have kids. The article Dual Income Families and the Economics of the Stay at Home Parent suggests that for a $40,000 earner, the actual after-tax and after child care expenses take home amount drops to a sliver above $13,000.

I have heard this argument many times from people who just wanted to stay at home. Who wouldn’t? I believe that a parent at home can educate their kids a lot better than when both parents work.

Some Less Considered Benefits and Drawbacks (Against or In Favor of the stay at home calculation):

  • Career Advancement Goals – (Against) Sure, someone may be making $40,000 now and may decide to end his/her career to stay at home. However, could it be possible that this person had the chance of getting a career of $100,000 or even $200,000 if he/she had just gained some more experience?
  • How to Return To Work? – (Against) – A career lasts 30 or 40 years. A kid needs full time care during 5 years, and part time care for another 10 maybe (until they can be safe alone at home – after school). The simple calculation does not takes into consideration the potential damage to a career for being out of the workforce for a few years.
  • Extra Expenses – (Against) Most of these calculation do not consider expenses that may be incurred because one of the parents stay at home. This includes heating and energy costs, and any other costs associated to making the life of that person more enjoyable during what would otherwise be daylight hours. Maybe an extra hobby or the perceived need for premium cable TV vs regular. Or even the cost of social activities with peers that where otherwise not possible if at a full time job.
  • Debt Reduction – (Against) – Remember than most Americans are deep into debt.  No sense in denying it.  If you still carry debt, don’t stop working.  You must repay the debt.  The debt just consumes more resources and leaving the job will just increase its effect (interest and risk of loosing the primary job and still have to pay it) on your life.
  • Breadwinner May Become Workaholic Career Freak – (In Favor) – When two parents share the responsibility of keeping a household in order, neither can do an extremely well done job. When only one of them has to work on the household the other can increase the amount of time and effort put into his/her career. Chances are it will be rewarded with increased compensation and will balance out the lost income of the homemaker.  Chances are that a well cared working partner will be very productive.  Being a workaholic is not bad if you have someone at home that can create some work-life balance.  It is just a lot of stress.
  • Coupon Clipping – (In Favor) – Someone in charge of optimizing household expenses can dramatically improve the household budget. Coupon clipping is just one example. Repairing clothes could be another. Saving on landscaping and house maintenance costs is another type. More time to cook means less meals out of home. You can see the picture.
  • Schools – (In Favor) Many parents are faced with a difficult challenge: find a good school for their children. Homeschooling become a very interesting option when compared to a private school. At stay at home parent can potentially teach their children better than a bad public school. This may save money versus moving to a better school district or paying for private education.

I think kids benefit a lot from a stay-at-home parent. It is a luxury that doesn’t need to be overly justified. If a parent wants to stay at home to take care of kids, then do it! Adjust the budget so that the single income covers all the needs, and make sure you have a year worth of salary saved just in case the bread winner looses the job.

As long as people keep their spending below their means, and try to make the primary income as high as possible, they do not need to use a second income.

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