Bringing a child into your family is likely one of the biggest decisions you’ll make in your adult life. While growing your family undoubtedly brings much joy, it also brings added financial and personal responsibilities you probably haven’t faced before. From big things, like finding and paying for child care, to tasks that seem more trivial like buying diapers, parenthood is a time rife with change and new experiences -- and new expenses. In fact, according to a 2017 study, the cost of raising a child through the age of 17 surpasses $230,000. Keep in mind this figure doesn’t even factor in the cost of college tuition.
If you’re a dual-income household, you and your partner may be considering if one or both of you will return to work after your parental leave period has ended. There are pros and cons to either scenario, and the decision ultimately comes down to what’s best for your family in your unique situation. Having a parent stay home will result in savings on child care, as well as the added benefit of being present for all of your child’s milestones. But, there are financial drawbacks, too.
“While there are cost savings for parents who stay home with their children, many people underestimate what they’re going to spend on a daily or weekly basis. We see a similar trend with retired individuals. Discretionary spending often increases; coupled with the loss of a salary, the financial burden can come as a surprise,” says Lauren Mahoney, vice president, benefits and compensation manager at Rockland Trust.
On the contrary, having two working parents means two salaries, two retirement plans, and overall more benefits to take advantage of. While the financial stability provided by two working parents is a definite benefit, it comes at the cost of spending less time with your family and spending more money on child care. Even once your children are school-aged, you’ll likely need coverage between when they get out of school and when you return home from work.
Below are some helpful considerations when deciding if returning to work after parental leave is the right choice for your family:
Financial considerations
Perhaps the biggest and most obvious consideration when deciding whether or not to return to work is the potential loss of income. Not only will you be leaving your salary on the table, but retirement contributions (including what, if anything, your employer matches), health care benefits, paid time off and any other perks that contribute to your overall compensation package.
Consider your local support system
If you have two working parents and your child care is closed because of weather, or if your child needs to stay home because he or she is sick, do you have local family or friends who could help out while you’re at work? If not, you may be forced to take a day off. Depending on your role, this last-minute flexibility may not be available to you, or will come at the cost of lost income for a day’s work. In turn, if you have a robust local support system that you can rely on in emergency situations, you’ll have the peace of mind in knowing that you and your child won’t be left high and dry and you can tend to your work responsibilities.
Cost of childcare
In Massachusetts, the average annual cost for infant child care is more than $17,000 -- that’s more than $1,400 each month. Behind Washington, D.C., Massachusetts has the most expensive infant care in the nation, with families spending 19.5 percent of their typical income on this essential service. So, while it may seem tempting to immediately return to work and receive a regular paycheck, keep in mind that you may be spending a good portion of that paycheck on childcare.
Talk to your employer about potential benefits for parents
What once was considered a luxury, things like paid parental leave and other benefits for new parents are becoming increasingly commonplace. Some states, like Massachusetts, even have laws in place requiring paid leave. Here are some things to consider discussing with your employer while you weigh this decision:
A final question to ask yourself when deciding to return to work: does your workplace culture support parents? Beyond what’s formally offered by your employer, are there other parents in your workplace who understand what you’re going through? Is your employer one that offers a healthy work-life-balance? If not, returning to work may feel like a bigger hurdle to overcome.
“As a working mother, one of the biggest pieces of advice I can offer for those planning to return to work after parental leave is to stay current on your industry’s news and trends. While your period of leave may only be a few weeks or months long, a lot can and does change, and if you stay even somewhat current, the transition back to work will be infinitely easier.” -- Colleen Balboni, Vice President, Assistant Director of Recruitment at Rockland Trust
Deciding to return to work is deeply personal and everyone’s family situation is different. Whatever you decide, don’t be too hard on yourself. Everyone and their mother (no pun intended) has an opinion on parenting, but don’t let outside voices weigh heavy on your mind. What’s best for each family is different, and whatever you decide, we’re here to support you and help manage your finances as your family grows.
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