Wednesday, February 24, 2010

Bad financial advice


In an online question on an Orthodox Jewish website, I read the following:

"My wife and I are the parents of two young children, one is 2 years old and our new baby is 3 months old. We are now deliberating whether my wife should go back to her work, as her salary will be close to nothing, daycare costs deduced. What do you think?"

The reply this man got was this:

"It's highly advisable that your wife goes back to work, even if  the immediate financial gain will not be large, to enable her to grow as a professional and provide future prospects for a higher paying job."

I, of course, don't think this advice is at all wise, financially or otherwise. If my opinion was asked, I would have said the following:

Nobody promises that your wife will indeed get a pay rise or a higher-paying job in the future. The stress your entire family will experience due to both of you being out and about and your children in daycare, however, is guaranteed.

There are other work-related costs apart from daycare and commute, which are the most obvious. To name just a few: likelihood of buying expensive convenience foods increases because there is no time to cook; some women need work clothes that are more expensive than what they would have worn at home; there is a tendency to "treat oneself" for "working so hard".

When one of the children is sick, sometimes the parent who stays home is the one with the higher salary, because the parent with the lower salary is forced by more pressing responsibilities to go to work (example: a teacher must prepare her class for an exam, so the one who stays home with a sick child is her husband, whose day at work is worth three times as much as hers, money-wise). And of course, children who attend daycare with a group of other infants are more prone to get sick in the first place.

Unless one of you is a teacher, you will face the issue of how to occupy your children during summer vacations, which often involves expensive summer camps and study programs.  

And, perhaps the saddest of all, working women are often forced to give up breastfeeding their child, which introduces the cost of formula.

You are an Orthodox Jewish family with only two young children. God willing, you will have more. Daycare payments might well be an issue for you until your wife is in her forties. This means not a year or two, but decades of working for free. It doesn't look like a very good bargain to me.

On the other hand, if your wife stays home, not only the direct costs of daycare will be eliminated, but your wife will also have more time to do things that take time and save money, such as cooking from scratch, mending the family's clothes, and perhaps growing some of the food you eat. She will be more readily available to play with the children and make up games with them, eliminating the need for expensive toys. She will have the physical and mental energy to stretch the family money in creative ways you wouldn't think of otherwise.

She will also have more time to make the home a pleasant place, not a cluttered, messy corner you all want to escape (usually to places where you are likely to eat out and spend even more money, such as shopping malls).

Your wife might even research ways of doing something creative from home that will enable her to earn money, once she has more help from the older children and some of her time is freed up.  

 This is my advice to this young family, and other families in a similar situation. I can only hope they follow their hearts, as the heart of a mother will almost inevitably lead her to stay close to her children whenever at all possible.

28 comments:

Kate said...

Anna, you are so right! I am a stay-at-home mom and people often ask why I don't go to work and put the kids in daycare. Not only would I hand over 1/2 to 3/4 of my paycheck in daycare costs, but add in easier high-cost dinners, lunches for work, clothes for work, gas and vehicle maintenance, etc etc etc and forget it! We figured we'd actually lose money and the blessings of having our children raised by their mommy.

Anonymous said...

Dear Anna,

I must say that whenever I read your blog I`m in chock over the very idea that Israel allows parents to leave a baby over to daycare at the age of 3 months. I live in Sweden, which is considered a very feminist country. The day care homes are not allowed to accept children younger then 1 year old. But whenever there`s the slightest possibility to keep the child at home a little longer, the parents do so. Daycare is also very inexpensive here. Of course 1 year is much to young any way, but the concept of leaving a 3 months old baby to daycare is unheard of. I just can´t understand how a family loving orthodox website can give such advice.

Maria

Anonymous said...

I agree with this blog. No one says that a woman has to go back to work to ensure advancement in the profession. That's not a given. Plus, the stress encountered for the next 4-5 yrs for which the clock cannot be undone, is not worth it. Here, the mother has a chance to help guide and mold a future ballerina, artist, violinist, two little happy somebodies that will be provided the most secure and precious of childhoods; a much more sure thing as investment in the future of two worthy human beings. Sorry, Mom, the productivity index of growing the future is higher in the first seven years of life, than a woman aged 23-33 years!

Now, if Dada is working at a job which is equally dismal, and doesn't like it, that may be a more complex decision.

"Morethnrubies1" said...

I wholeheartedly agree! In fact, it would actually cost us money for me to work! I know of several women who are stuck in the same situation, but they are choosing to work, or their husbands WANT them working anyway under the delusion that she must "help with the burden" of providing financially. I also know a woman who was working soley to pay for her (very expensive) car and shoe habit, while her children sat in daycare without her.

Your points are valid. I am convinced most mothers could stay at home with their young children if they took out a calculator and then made some simple sacrifices. The time is so short, and every season of our lives change so much...there will always be jobs available (Barring major economic depression) but your children (or even your fertility) will not always be there!
So to those who are considering it, take the plunge, quit your job and just see how much money you can save your family! You may be pleasantly suprised that those "Sacrifices" make way for some of the greatest joys in your life!

The Road Less Traveled said...

I too am a stay at home mom. I fully agree with your reasoning. Thank you for your words of encouragement. I often visit your site and always leave with a piece a wisdom and encouragement.

Blessing to from our Heavenly Father

YahKheena

jiabaoyu said...

I believe the breaking point of financial solvance for a working parent is around $70k in the US. I say 'parent' because I don't see why daycare etc cost should automatically deducted from the wife in a dual income household where money is pooled.

So the advice on the website is only correct if the women was making a good income to begin with. With the second child, the woman has to make more to offset the cost of daycare.

While you are correct that working parents have to spend more in daycare, I would say the other items you listed as extra cost of working mothers are family and women dependent.

Again, I offer my own home up. My mother worked fulltime all of my life and both she and my father always managed to make home cooked meals from scratch.

My mother is very big on organic and natural living (like you) and she refuses to eat anything processed. She's even baking her own bread now. I know that not everyone can do this, but some people have that personality type where they must have 'something'to do all day.

I know plenty of working and nonworking mothers that do buy processed foods. There is probably a propensity for working mothers to buy processed foods, but working doesn't automatically mean food out of a can for the family.

As for work clothes. That is job dependent. I wear hospital scrubs supplied / required by the hospital. In that way, I can actually cut down on clothing compared to a SAHM since I don't even wear my own clothing for most of the day. My weekly laundry is cut down by half b/c I don't have to clean clothes I merely wear on the drive to and from work.

But again, I know of women who have to buy business clothing to work. However, nowadays, the trend is to go business casual so one can be judicious about selecting clothing and only buy those one can wear to the office and on the weekends.

As for 'treating oneself'...this one I definitely know that women of all ages, incomes and circumstances will do. SAHM can have it just as hard, if not harder, than working mothers. They are just as likely to splurge on the $4 coffee as the working mother. I see this all the time where I study. SAHM comes in and they buy expensive teas and coffees and congregate with fellow SAHM. Nothing wrong with that. They've probably had a hard day tending to home and hearth.

Some people, like my mother (and perhaps you, Anna) are much more frugal minded and refuse to splurge like that....but I'd wager most women don't have that sort of self discipline.

The other points you make are good, but as kids get older, there are summer options for kids. For example, I know plenty of families that send their kids to top notch research facilities to pursue medical or engineering research in the summer time. I know kids who go on summer camps and had good memories from them. There are many ways for kids to experience life outside of a SAHM's eye and I think most kids turn out fine whether they have a mother at home to see to their needs or they have to be more self sufficient about it.

Untypically Jia said...

Wise words as usual Anna! I'm shocked sometimes when advice like this is given out so quickly. I believe it's because it's what is commonly done, but that's not always the right choice - in fact it's often the wrong choice.

I know that even without children my family suffers when I am not home taking care of what I believe God charged me with, I can't imagine doing so with children being left behind to be raised by daycare centers.

Jael said...

Beautifully written! I couldn't say it better. These are all the very same reasons that I stay home with our now 11 mo. old daughter. The blessings we have because I can stay home far out weigh the things we have to give up in order to afford staying home. It may be hard now, but the burdens of me being away and the baby being in daycare, or of me working nights so the baby is home but I never see my husband, would cause more damage to our family than I am willing to tolerate. It is only a short time, and the time I can invest in frugal living and in making a lasting family are better than anything I could find in a corporate job.

Laura Ashley said...

Too bad you don't write the advice page! I suggest you email them this and see what they say.

doubledrudgery said...

I think a woman really needs to decide how large a family she would like. If she has no fertility issues, and is planning to give birth every year, working outside the home may not be all that beneficial. (Although even after one factors in clothes, daycare, transport, convenience food, etc, in most cases there will still be a good chunk of salary left. Plus there will be a PENSION, a crucial income a SAHM never gets).
On the other hand, if a woman is only planning on having a child or two or even three, it is not financially advisable to stay at home long term. There are a myriad of other benefits to staying home, but financially, said mother would probably be better off in the office.
Tammy

Stephanie said...

Ditto! So many women just don't understand this. I am looking forward to volunteering (with my children when I have them) in my community, but this is "not enough" for some of my friends who think my talent will be "wasted" if I don't have a high-profile, high-paying job! How foolish, but for so many it is not intentional foolishness, just a lack of questioning the system as it stands. Thank you for your words!

Anonymous said...

What is your advice to a mother who wants to stay home with her children, but because her salary is much higher than her husband's, must work? What would you advise if the husband is unable to achieve a higher paying job because of language and literacy problems? I've already asked him to take classes to improve his language abilities, but thus far, he's refused. He seems happily content to let me do everything, and I do mean everything.

WesternWoodburner said...

You have an interesting way of writting needful thoughts.

Mrs. Anna T said...

Maria, 3 months is the length of maternity leave in Israel, which is just heart-breaking in my eyes. The overwhelming majority of women go back to work after that period. I would never, never leave a baby this young unless I was actually starving and had to work to sustain both our lives, but that's not likely to happen to most women.

jiabaoyu, kids get older, but when a new baby appears every 2-3 years, the issue of babies just doesn't go away!

Tammy, of course I believe staying home is beneficial for a woman even if she can earn ten times of what she spends on daycare. Most women, however, don't. The family who sent this question will earn almost nothing, from what they say, so my advice is focused mainly on the financial aspect of women who don't earn all that much.

Anon, your situation sounds complicated and my heart goes out to you. It is, however, very difficult to offer any solution while I don't really know you or your husband. You can contact me at domesticfelicity@gmail.com

Anonymous said...

To Mrs. T and Maria- often in the US mothers go back to work when the baby is only 6 weeks old. Sad, but true.

Marianne said...

Thank you, Mrs. Anna! It's so frustrating how bombarded we get with this message that we have to work, because working for our husbands, homes, and children isn't good enough. I pray that if we're blessed with another child to be able to stay at home. My husband and I make about the same amount of money right now, but his job has a much higher earning potential... YET, everyone and everything around us is telling us how important it is for me to work outside the home.

Pendragon said...

I just don't see why the cost of daycare would be deducted from the wife's income as opposed to being split between the husband and the wife. I also don't see why the expense of the wife's work clothes are considered a problem but not the husband's.

I also don't have any problem with daycare for babies! Parents throughout history have handed babies off to others -- to wetnurses, grandmothers, fellow villagers, etc. It seems perfectly normal and healthy to me, as long as you choose the day care facility carefully. I know many children who have been in day care since babyhood. When I look at my niece and nephew (now in their teens), I get the sense they take it for granted to have whole communities of adults caring for them and interested in their well-being.

Lee Anne said...

Hi Anna,

Good advice, as usual!

I am confused when some people say that it is erroneous to deduct the daycare costs from the mother's salary and that it should be deducted from both salaries equally. Not so -- the argument is: How much TOTAL NET income would the family earn if ONE of the parents (usually the mother) stayed home with the child(ren) vs. having a dual income and, therefore, placing the child(ren) in daycare.
You could try the "split the difference between the salaries" method, but it all comes the same conclusion: if BOTH parents worked, there would most likely be a NEGATIVE balance in the end, either way you split it. Unless BOTH parents had really, really posh jobs, then it would not be a negative balance, but then, why have kids in the first place? I guess having both parents work their posh jobs would contribute to the economy by farming out their kids and their money to daycare workers, fast food chains, frozen food markets, car headrest TV makers, etc. etc. I guess you could file that under "philanthropy" during tax season?

Homemakers Cottage said...

Great post, Anna-- enjoyed your insights. I quite agree! ~Kristy @ Homemaker's Cottage

Anonymous said...

Anna I am so happy to again come to your site. I have followed you on your site and your comments on other women's sites for a long time. You are so sweet and insiteful. As an older women who has been a keeper of the home all these years I thank you for again encouraging women to stay at home. Even now in my years as a Grandma there is plenty to keep me busy and very happy at home. As you said, we have actually saved more money by my being home. It is a fact I could show people on paper. May our God continue to bless you.

Rebecca on The Homefront said...

I am another mother who found that daycare costs would make work unfeasible at my low income level. I know the answer won't be the same for everyone, but I hope a great deal of thought is given either decision, weighing pros and cons.

Anna, I always appreciate the kindness with which you share your thoughts. Rather than attacking, you calmly lay out your argument. Thank you for extending such courtesy to others, even when they disagree with you.

J in VA said...

Doubledrugery said...Plus there will be a PENSION, a crucial income a SAHM never gets).

In this economy, I don't think anyone should base much on the "guarantee" of a pension. There are too many companies whose pension funds evaporate or fall with the stock market and really yield nothing. Many women also work for businesses who don't even provide benefits or pension.

There is much to be said for families caring for their own children and then the grown children providing care for their parents when elderly. It seems that no one should complain about being placed in a nursing home if they have provided the model of paying others to care for your family by putting them in daycare, afterschool care constant summer programs, etc...

I guess we really have to decide, do we want ot support the economy by working and paying others to do what we don't want to or we do as much as possible for ourselves so that so much money doesn't change hands. Those are real philosphical questions that only we can answer.


Remember, you can not pay anyone to love your children or your elderly, bedridden mother.

Anonymous said...

very insightful! I knew some of these points, but others were brand new to me. Another thing that happens a lot is other relatives become involved in helping with looking after the children, in order for both parents to work. My cousins are blessed to be able to spend summers with Grandma and Grandpa (or else participate in summer camps), and this is how my aunt and uncle make it work for them--but how many are so fortunate to have this assistance? When children are still infants and toddlers, I personally think that spending time with grandparents is a good thing, but they will never be able to replace the full-time care and attention of Mom/Dad. Sometimes it has to be this way...another cousin of mine was practically raised by our grandma, because my aunt has been a single mom the majority of her life. It has been good in some ways...sad in others.
Great post!

Gothelittle Rose said...

It may be worth noting that around here, a woman is allowed to receive her husband's pension after his death. She receives his Social Security benefits, too.

An interesting part of the whole talk of marriage benefits in the U.S. is that most of those benefits do the most good when one parent remains home to raise the children. Most of the benefits become unnecessary or even a liability when both parents work full-time.

Kate said...

Great post as usual! They are often very insightful. As other have mentioned maternity leave in the U.S. is anywhere from 4-12 weeks. I've never heard of more than 12, and it's usually unpaid, the leave just technically means "we will hold your job for you for 12 weeks".

I do want to point out something and encourage you on one point. Breastmilk is best no matter what, even when it comes from pumping. Moms can still continue to pump while they work and they should be commended. I know you have some reservations about anything but milk directly from the breast, but sometimes it just isn't an option, and secondarily pumps can help alleviate some difficulties women have during breastfeeding. There is certainly nothing wrong with giving a baby a bottle of breastmilk!
I am not sure what goes on legally in Israel, but no one should ever be "forced" to give up breastfeeding, from the employers standpoint... Moms should be encouraged to pump for their babies because breastfeeding can reduce how often baby is sick and save the employer money that Mom is out. At my work we have a small (but comfortable) room where mothers can go to pump during the working day. Lastly, as long as the bottle is not introduced too soon, baby can still be breastfed, it's not an all or nothing thing. They can get a bottle or two of expressed breastmilk during Mom's working hours, and breastfeed while they are at home.

Mrs. Anna T said...

Kate, of course breast milk is always the best and I would encourage every woman to pump! There are usually pumping rooms here and people are supportive of breastfeeding. However, it can be difficult to pump enough if a woman is working full-time - in this case, she will need more than 1-2 bottles daily.

Some women have trouble pumping in the first place. For me pumping was always one big frustration, I KNEW there was milk in my breasts and I just couldn't get it out efficiently, even if Shira was nursing on the other side to stimulate letdown (otherwise I couldn't get out more than a few drops at all with a pump). It took me a few days to stock up on a few bottles of breast milk in advance. Thankfully I only had to do this a few times, for a short absence or a fast, but had I worked outside the home while my daughter nursed a lot, there's hardly any doubt in my mind she would have ended up drinking formula.

Karen said...

Well said! Don't forget transportation costs!! When I got my job I thought I would be able to walk all the time, but now the insanely bad weather I've been spending literally half my paycheck on taxi cabs just to get there and back.

And I am def. about to go "treat myself" today hehe for all my hard thankless gruiling physically difficult work. :)

Samantha said...

I was an at-home mother for 7yrs- from the time my children were born. Then, last year, my husband threatened to kill me and take others with him. I am now trying to survive on a $7.75 wage with two children. While I admire the ideal to stay at home with ones children, I also see the reasoning and practical reasons for maintaining a foot in the career door. If, goodness forbid, anything happens to ones husband, one is still able to support themselves and their children. I am working now out of necessity, not by choice, and certainly not at a living wage. I would never again put myself into position of relying so heavily on a man that I could not fully support myself and my children. One never knows what the future will bring, and trying to survive on a retail cashier wage (minimum wage) just doesn't cut it, and when one is out of the work force as long as I was, that is the only option out there. Again, don't get me wrong, I admire and agree with the IDEAL of staying home with ones children- but the reality of what it takes if something unexpected occurs and that ideal don't always mesh.