The decision to stay at home was based on more than emotions, it was a financial one as well. When my husband and I took a closer look at the benefits of me working outside the home vs the benefits of me staying home with our child (now children) it was a no brainer. I tried to be very realistic of my expectations on what life would be like on a single income. The question then became could I afford to be a stay at home mom? Once we had decided the benefits of me staying home did in fact outweigh those of a duel income it was time to do the math and make sure it was a viable, and practical plan.
Doing The Math: Can I Afford To Be A Stay At Home Mom
The figures I am using are very simplified and for the area of the country I live in. I am also basing the math off of a family of four, instead of our family of six as most people don’t have 4 children. If you want to do this then use the income and expenses that are typical for you.
Gross Monthly Income – $1,090 before taxes working 40/week and making $12.00 per hour which is an average hourly rate in my area for a variety of jobs including factory work, office work, and some medical jobs as well.
Approximant Federal Taxes- $572.56 per month.
According to www.irs.gov Publication 15 (2016) Section 17 – Table No.5
Exemption Amount per person: Daily $15.60, Weekly $77.90 and Biweekly $155.80.
See the math: $480.00 earned/week – $311.86 (4 total exemptions) = $168.40 taxable wages.
$168.00 – 15% tax = $143.14 taxes withheld per week or $586.56 per month assuming you are paid weekly.
Net Monthly Income Before Expenses: $1,347.44 excluding State and Medicare taxes.
Expenses To Be Taken Out Of My Paycheck
Day Care Expenses For 2 Children – $125/week per child totaling $1,000 per month for two children. After calling around this was the cheapest price I could find. I know there are families out there paying much, much more than that.
Gas Expenses – $60.00 per week or $240.00 per month. I based this on what it costs us to fill up my van each week, it’s a conservative guess as it could easily go up or down.
Lunches – $25.00 a week or $100.00 a month assuming it costs $5.00/per meal and no eating out with co-workers.
Health, Dental, Vision Insurance: $0.00 This expense comes out of my husbands paycheck so would not be included in mine.
What Was Left Or My Net Monthly Income
Net Monthly Income After Expenses: $7.44! So for an additional $7.44 a month I could have the privilege of spending 40 hours a week away from my children.
Once I deduct state taxes I would literally be paying to go to work and leave someone else to raise my children. In fact, we are ahead of the financial game by having me stay home with our children as we don’t pay the extra taxes, gas, or daycare expenses.
*At this point my blog is earning my family more additional income than I would be earning working outside the home. If you would like learn how to create your money-making blog check out my post, How To Create A Blog On A Budget.
*I chose not to include state taxes in my figures as each state handles their taxes differently. Some states don’t collect income tax at all. For a more accurate picture of your own situation you should consider your state income taxes as part of your overall income picture.
*I also did not include Medicare and Medicaid taxes to help keep the math simple. You are more than welcome to include that as well.
*Note: I am not a tax expert. I am just a mom doing basic math to see how the monetary benefits of me staying home compared to me working outside the home. Before making any major life changes consult a professional!
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