A newsletter of simple ideas #36 -- April 2001

Having A Baby, part 1: One Income or Two?


by Lisa Purdy

My nine-month old daughter’s favorite toy is a plastic, credit card-sized 1999 calendar that I found recently while cleaning out my purse (the fact that I still had a 1999 calendar should tell you how much it needed it). Her name-brand toys molder away in her toy chest as she takes the calendar, bends it, bites it, turns it around and around, watches its shadow on the wall and flicks it against her toes. Her other two favorite toys are an old shortbread tin and the receiver from our former telephone. Sometimes, she combines all three by putting the calendar inside the tin and whacking the sides with the receiver, making our house sound like a blacksmith’s shop. I am grateful that she loves ordinary things, it reassures me that I made the right decision when I decided to give up my paycheck in order to stay at home full-time with her.

Money-Saving Tip:

Learn Vegetarian Cooking. With meat as expensive as it is, and with other sources of protein like beans, tofu, lentils, and cheese as inexpensive as they often are, it often can save money to cook vegetarian every now and again...or all the time, if you choose to do so. Another benefit of this is that meat (beef and pork especially) are one of the largest sources of environmental damage caused by consumer choice--second only to the automobile, so you're doing good for the environment, too. A good vegetarian cookbook I own is the Moosewood Cookbook.

My husband and I had always planned to have a child when we were 35 and had saved enough money for me to leave work and stay at home full-time with the baby. I couldn’t imagine only seeing my child for a few hours every day between the end of work and bedtime and then on weekends. We knew we wanted to only have one child, so we knew we would only have one chance to enjoy being parents. It was more important to me than career advancement, money or status. If I couldn’t give my child all the time and energy I was giving my employer, then I didn’t think it was fair to become a parent.

So, of course, I became pregnant five years ahead of schedule, after my husband and I had just blown out every bit of our savings (including retirement accounts), quit our jobs and moved across the country from Seattle to Baltimore so he could pursue a Masters in Creative Writing at Johns Hopkins. At the time, we were living on his teaching stipend of $4750 per quarter and some thinly-spread savings remnants. The cost of living in Baltimore (which is about a third less than in Seattle, where we had lived before) made it just possible for us to make it every month. I couldn’t imagine how we could live back in Seattle after graduate school and the arrival of our baby without my income as well as his.

Doing some research, I discovered a disheartening annual report from the US Department of Agriculture. According to the USDA, the average cost of raising a child born in 1999 exceeded $160,000 over 18 years. For families in our tax bracket, the figure was almost a quarter of a million dollars. This worked out to $1157/month. I didn’t see how we could possibly afford to lose my income. Reading the report in more detail, however, I started to see that it is possible to dramatically reduce these expenses. Lower and upper-middle class families spent significantly different amounts raising their children. According to the report, families with annual incomes of less than $38,000 spent, on average, $120,000 less over 18 years than families with incomes over $64,000. That's a difference of almost $7000 a year, meaning that upper middle-class families are voluntarily spending twice as much as their poorer counterparts. The difference comes mostly in more expensive homes, clothing and food. It wasn’t important to my husband and I to have the most expensive version of anything, so I started to wonder if, by getting creative and closely examining our spending, we could make our original plan work.

Digging a little deeper, I uncovered hundreds of articles, books and websites that detailed the hidden costs of having both parents work full-time with a child in daycare. The most obvious cost was the daycare itself. In Seattle, the average monthly cost of child care exceeds $700 per month, more than the cost of undergraduate tuition at the University of Washington. I found I also hadn’t considered our tax bracket. By eliminating my income, we would move into a lower tax bracket and pay over $5000 less per year in taxes. I added in the cost of professional clothing ($50 a month for pantyhose alone, in my case) and the convenience food I always ended up buying because I was too tired after work to cook, and having one wage-earner started to seem feasible. The list of things we wouldn’t have to pay for if I stayed at home grew and grew.

It was more than eliminating expenses, though. Having one partner at home full-time meant that I had the time to do things like comparison shop rather than buying whatever was fastest and easiest. I could find creative solutions for entertainment because I had the energy to think of more than just heading for a restaurant or bar on a Friday night (obviously not an option with a new baby anyway).

The USDA report examined spending in seven categories: housing, food, transportation, clothing, health care, child care/education, and miscellaneous (which included things like personal care items, entertainment, and reading materials). In the next issue of "Reasonably Simple," I'll be using some of these categories to give a run-down of some of the specific things we’ve done to save money, and accomplish our goal of having one parent at home full time.

 

Resources

 

Click Here!