Step 3: Weigh child care costs against potential income
Rick Kahler, the president of Kahler Financial Group, says it's a good idea to compare the cost of child care with the income of the lowesr-wage-earning parent. In many cases, he says, the cost of child care negates working outside of the home.
In Wisconsin, for example, the state median income for a two-parent family is $79,589, while the average cost for infant care in a day care center is $10,775 a year, or about $207 per week. In Milwaukee, the gross weekly salary average for a full-time, live-out nanny is $500.
Assume that the lower-earning parent makes $2,500 a month in net pay. After work-related expenses (transportation costs, lunch, etc.) of about $350, the amount available for child care and other household expenses is $2,150. If this parent's contribution to the household budget is $1,000 a month, subtract that contribution from the monthly available amount; $1,150 will be available for child care.
"There are roughly 4.33 weeks in a month, so the child care costs could not exceed $265 per week or this family would be going backwards," says Maldonado.
For many parents, even though there is no financial advantage to working outside the home, it's an emotional and mental necessity. Parents need to weigh their needs with their child's needs and the financial implications of child care.
"It is wise to create a plan for child care," says Maldonado. "But for it to be successful, the plan should include both financial as well as emotional and values-based components."
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what a dumb article ... sorry .. not everyone is making crazy cash ... I made 10 an hour when I was expecting a child ... how the heck can you save on that? byt the time you pay daycare you make no money anways... this comes from someone who obviously makes great money and they are thinking of their own situation. .. well wake up not everyone is in your situation 50% of Americans only make 25k a YEAR ... DO THE MATH!
This approach is not possible for teens or single woman that get pregnant. Decent daycare is another rent payment!
What teenager or single mom can afford $800 + daycare, $1000 + rent, utilities, food, car payment, car insurance, GAS, cell phone, clothes etc.???
We need more programs for assistance in daycare for single moms that make $40,000 and less.
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