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By the time you have two children the cost of child care is often similar to or greater than after tax income. It's just not really financially viable to work a
by zik 8y ago
By the time you have two children the cost of child care is often similar to or greater than after tax income. It's just not really financially viable to work at that point.
- asdfasgasdgasdg 8y agoPeople often make this argument, but it's an incautious one. It assumes the stay-at-home spouse's pay won't go up in the future, but this isn't the case. After four or five years, you won't need all-day childcare any more. However, the SAHP's earning potential will have gone down due to their time out of the workforce. This has compounding effects down the line. If you spreadsheet it out under reasonable assumptions, your after-tax income from the SAHP has to be substantially lower than the cost of childcare before it makes sense for them give up work over the long run. Obviously it depends on the family, but I think a lot of people take a fairly myopic view of this question and don't think about the long-term consequences.