Just wondering how people view the different trade-offs here. I grew up in the suburbs with a permanent stay at home mother and definitely would not trade that experience to grow up with double the income and two working parents. That said, dual income households seem to be more popular today vs. two decades ago due to a) rising cost of living and b) greater population of women in careers. However, you also have to consider that the second income is taxed at a much higher marginal rate, and that daycare + nannies are very expensive. After the taxes and extra expenses, that second income might barely be positive net income! Plus I think there are developmental benefits to having your children spend more time with their parents vs. in the care of non-family.
Particularly interested to hear if anyone who is currently or grew up in a dual income household feels that it’s a better arrangement.
Here's an example: if you make $250,000 and live in Bergen County, NJ, your tax rate is ~36% and your post-tax income is ~$160,000. If your spouse makes $150,000, your combined tax rate is now ~39% and your post-tax income is now ~$245,000. That means your spouse is actually making $85,000 after taxes. But you also have to factor in the extra childcare expenses which would be $0 if your spouse were staying at home. According to some quick research, the monthly cost of daycare in Bergen County is ~$1,300 per child, times twelve months equals $15,000 per year. So now your spouse's $150,000 gross income really nets out to $70,000 a year. And if you have two kids in daycare, you can knock that down to $55,000 a year.
Childcare expenses are tax deductible up to a certain level, so it's not quite like this.
Childcare expenses are deductible up to, what... $5k? $10k?
$1300 per month in childcare. Thats insanely cheap. Full time childcare in my area runs $2k-$2.5K per month for five days a week.
Yes, but in the end, unless it’s something she wants to do, sometimes it’s more about passion and feeling useful/bringing positive value to society.. versus $$$ .. I know it’s not an option for my fiancée :) Honestly don’t think she’d be happy..happy wife happy life ?
That's why you shouldn't get married.
Another approach is to consider what's better for the kids. If you don't have kids, really hard for you to weigh in on this as you have no practical perspective. Once you become a parent, life changes. Not judging anyone here. Some take the path of "now it's time to put my own issues / wants on hold and put the kids first" while others keep themselves as primary. No right or wrongs. I was raised with a stay at home mom. We raised our kids with a stay at home mom. My wife was raised with a stay at home mom for a few yrs (until she was in school). Could we have had a more extravagant life with dual incomes? Sure. But that wasn't our priority. Quite the contrary. I did well enough (on purpose) to secure a great life without the need for a second income. We didn't go for the "keep up with the Jones' " routine when it came to fancy cars, and best of everything although we have a very nice house and took really nice trips. But typically we were last to get the iphone or new gadget, didn't join a country club, etc.
What's important is both spouses being on the same page. I would have had a problem with a wife who put her or our enjoyment ahead of the kids. That's not to say you don't enjoy things because you do. Raising kids is hard but it's also a lot of fun (or can be).
This is the correct answer, whatever you and your spouse believe is going to be most conducive to your children's lives. My wife will hopefully stop working once we have children and we'll both gladly forego some luxuries in life to make that happen.
I've been the stay at home parent. No question it wasn't a money consideration it was what was best for my child. I have no regrets even though financially it was tough and I took a career and income hit. It's hard to know what will be best for your family until you are in the situation as I 100% planned to go right back to work but once I became a parent my priorities changed for what was best for us. So my advice is to keep an open mind but also discuss the possibilities as it was a fight between my partner and I who was going to stay home as neither one of us wanted to really halt our career. In the end- as a mother- it was me who stayed home/worked part time until my child was in school full time.
Think about this quite a bit - as of right now, definitely prefer dual income. For context, we're about 4 years out from having kids. She makes good money and will continue to increase her earnings - the lifestyle we can afford to live is vastly different based on each of our current incomes. We're talking a much nicer house, vacations, significantly more savings, etc.... roughly make $220K on a combined basis right now (with high potential to get it to ~$270k within the next 2-3 years here, tops) in a LCOL area. She never works more than 40 hours and I'm mostly 40 hours +/- depending on deal flow (wouldn't really get past 50 except maybe circumstances like last year when the debt markets were going nuts).
The thing that may change my/our minds is if I end up earning what we currently make on a combined basis by myself, which is definitely possible but unlikely within the next 4 years here. We both have very flexible jobs which makes it considerably easier... if I was working in a demanding job (such as IB), it would be a no brainer that she'd need to stay at home until the kids are in kindergarten or so.
I've been a stay at home mom and worked a corporate job. When the kids are little - no comparison- being a stay at home parent is significantly harder and all consuming.
My wife hated her job and worked similar hours to me, for like a quarter of my comp. That, plus the cost of childcare made it a pretty easy decision to have her stay home.
It has not been easy and I struggled with the mental flip of "no more fucking around, I'm the only way my family eats."
But it has worked and been a better move for us.
It's like a matrix of pretty much what everyone has said above.
On dual income:
- its great to bring in more income, but then you have to weigh that with home much quality time you are spending with your kids.
- the math about a second income above works out, but some people also look at experience; meaning, even if one parent breaks even while their kid is in child care, they still have ~5 years of experience if they just quit their job.
- its other expenses that add up too, for example, if both work, less time to do shopping or make food at home. Also, if on paper you are making $250k, people feel they can spend more, which means save less.
On lifestyle:
- Everybody wants lifestyle creep. I'd say, don't judge yourself to others, mainly because I always say, "they will tell you what they have, not how they got it" (inheritance, parents paid for it). I have family members who are married, work two jobs, two kids and are basically house poor so they need to rely on family members for free child care. Problem is, stuff now is more expensive but there is also more of it. In the 50s, you didn't really do international travel, or SBUX everyday.
On raising kids:
- just figure out whats important to you. My mom was stay at home, then got back into the workforce. Its like they say, kids are only that age once.
- Also agree to consider what is best for the child.
Personally, I think we would have a better country if more people stayed at home with their kids, just because I feel most problems in this country (United States) are resulting of bad parenting. Then we try to make laws that aim to fix bad parenting, but laws can't fix that.
Your point about saving time for shopping and other things is so spot on.
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