After posting “How I Have Lost Over Half A Million Dollars Having Kids, So Far!”, I started thinking about how many of my family and friend’s spouses work.
Let me start with our parents… Both sets of parents work. All the people I know at work, their spouse works. My boss who makes at least twice as much as I do, spouse works. Where I live, only one other neighbor’s spouse doesn’t work, the rest do. My college-educated sister and brother-in-law (great people), both work. My sister is having a baby in Feb. 2010, and she claims she’s going back to work a few weeks after the baby is born. They already make more than me…
So, I decided to go out to the website: money.com to use their calculator for net worth and see what the median (the median, mind you) net worth would be for someone in our conservatively theoretical income range! The number came out to be $644,100.
Missed Income
And that is the median! Both my wife and I are very frugal and based on our frugality habits, I recalculated the number… I figured for us it would be somewhere in the $800,000 to $900,000 range, Grrrr!
Who is to blame for this? Well, unfortunately, me! My wife and I discussed whether she would work or stay home raising the kids years before we had our first child. I told her once I make over a certain amount, she could stay home. Ironically, I accomplished that number more quickly then I imagined, and so she stayed at home after my son was born. In hindsight, I don’t think this was the most prudent move on our part. It especially hits home seeing my 20 something sister start to pass me already with respect to net worth, did I mention that both she and my brother-in-law are both studying for their MBAs? In a future post, I’ll have to tell the story about how my sister won a free house. So now that I know I’m behind compared to our theoretical income group’s class, what can I do? I’m thinking it’s time to start some side hustling (frugaldad.com’s coined-phrase).
How do I feel about my discovery?
Sad, but not too disappointed. My kids are doing very well in all aspects of their development. It’s a hefty price to pay though, especially when we’re practically the only ones doing it these days in a world of the two-income earner households. Shoot, If we had that money now, I could go into a semi-retirement state if I wanted to (I’m not old enough to think about that now though)… Oh well, the moral of the story is, think twice before and your significant other decide to quit work to raise your kids.
I’m torn on the choice we made. If she were working all along, we’d be able to have a much from exciting life now (trips to Hawaii, Paris, etc). We probably would also be financial independent now (although I’m sure I would still be working).
My daughter is 6, so she started kindergarten. My wife decided to picked up a bookkeeping/account position at a small local shop in town. She only gets 6 to 8 hours for the entire week (by choice). This way she still get go help out at school (parties, plays, etc) and keep her accounting skills up to date.
She might return to work, we haven’t talked about it…
If we had a second chance, I’m not sure I would have went down this path. That extra $400,000 to $500, 000 in net worth we could have had makes me now cringe. I wish I was a spreadsheet head back then like I am now 😀
Both my wife and I come from a dual-income household too. I don’t know what she did to brainwash me into letting her stay home to raise the kids (just joking)…
I think it was a good experience for my kids, but it sure is a lot of money to let drift by (at least for where I live… “the rustbelt area”).
Thanks for the advice! I really appreciate it, and I’ll ask her what she thinks about at least a real part-time schedule.
It’s funny, that by blogging about my finances, this “money loss” popped in my in my head. I didn’t really think about it much beforehand.
There is a good chance that I many try to pickup some extra work in the tech field too.
Ironically, now that I should be totally debt free in a few months, I even want to runner towards my financial goals harder than ever before!!!
I want to start a “side hustle” as well just for the simple reasons I want to open a Roth 401(K). I love the Roth IRA but the $5k contribution is paltry.
@SeeJaneGetRich
A Roth 401(k) is perfect for you! I haven’t taken the plunge yet and opened a Roth 401(k)at work yet. I just have the regular 401(k) and a Roth IRA.
Congratulations on you newer new job… Yeah 3 days is a way to long to stay at one job 😉 hehehe
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A little confused by your math…. You just did a median net worth calculator of where you would be with the extra income? Did you then subtract all the daycare expenses that you would have been paying? It can be substantial. For us, for 2 kids it’s greater than $24,000 per year – and nothing fancy in terms of daycare, just the average. Also, the extra income can then phase out some tax credits that you may have been receiving – $1000 per child, etc?
In our particular case, we are fortunate enough to have 2 grandmothers that would jump at the possibility to babysit!
One is retired, and the other one is semi-retired. So daycare cost wouldn’t be a problem.
As for the tax credit, that’s the only downfall that I can think of from a tax perspective, so I wouldn’t get an extra $2,000 a year… It still would be worth it, in a bit way!
Thanks for stopping by and pointing out those concerns! If you don’t have 2 grandmas to cover daycare cost, sometimes it’s not work the extra expense for your spouse to work a job, especially if it’s a low paying one. But the majority of the time it is! Especially when the kids start school!