Thursday, June 09, 2005

Can you afford to stay home with your baby?

One of the dilemmas that many new mothers face is the decision of whether to stay home with their newborn baby or return to the workforce after their maternity leave. If finances are not an issue, then it may just boil down to what your preference is (perhaps you love your job and aren't ready to give it up). Other women, however, may feel as though they can't possibly quit their job because their family needs the money.

If you're part of the latter group, but really want to stay home with your baby, have you considered how much it actually costs you to go to work? Tack on a fat daycare bill and you may soon find that it's barely worth it for you to go back to your job. Here are some things to consider before you give your boss your return to work date:

-- Commuting expenses. Unless you have a company paid chauffeur that picks you up and drives you to work each day, it likely costs you money to get to the office. Add up expenses like car payments, gas, tolls, and parking.

-- Business attire and dry cleaning bills. Unless you work in a uniform, you probably have to buy suitable work clothes every so often. Figure out how much per month you spend on clothing (it's probably more than you think). Add up your monthly dry cleaning expenses as well-- they can really sneak up on you and become a considerable expense.

-- Lunches out and office gift contributions. You can always brown bag your lunch to save a few bucks, but there's always those group lunch outings that pop up (they can get costly). And don't forget the frequent collections to pitch in for gifts for coworkers. All of this stuff adds up.

-- Daycare costs. If you're going back to work, someone's going to have to watch your little one. Unless you have a friend or relative that is willing to watch your child for free, you may have a rude awakening when you start to look into daycare costs. Daycare for a newborn baby is extremely expensive. Add this new expense in and see how much of your paycheck you'll have left.

--Tax breaks if you quit. If you do decide to quit your job, your family may be in a lower tax bracket without your salary. Consider this when figuring out the financial pros and cons of leaving your job.

Also, make sure that you take the maximum amount of time off that you can once your baby is born (as long as you work for an employer with at least 50 employees within a 75 mile radius, you're eligible for 12 weeks of unpaid leave of absence under the federal Family and Medical Leave Act). While you may have been positive that you wanted to return to work after the birth of your baby, you may change your tune after spending 12 weeks with your new little one.
If that's the case, do a little math to determine just how big of a chunk comes out of your paycheck. You may find that becoming a stay at home mom is more rewarding than any other job you've ever had.

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