Photo credit to Horia Varlan of Flickr Creative Commons
According to the U.S. Census Bureau, in 2006, 70% of mothers worked outside the home. Are they actually costing the family money?
The median salary for women in the United States, in full-time, all-year jobs, is $28,000, according to the 2000 census. Of course, many women make more than this, depending on their career. The median salary for men in the United States, in full-time, all-year jobs is $38,000. On average, a two-income home in the United States earns $66,000. Yet what are the hidden costs of the second income?
Working Moms and Child Care
When a mother holds a job outside the home, the primary concern is child care. According to Cost Helper, the average cost of childcare in the United States is $611 per child per month, or $7,332 per child per year. There are many variables in considering the cost of child care. Of course the first consideration is the safety and well-being of the child. All families are willing to pay a premium for quality childcare.
Whether the family prefers a daycare home or a day care center also affects the cost of childcare. Other factors are distance from home and work, hours of operation, and ratio of staff to child. Nevertheless, out of the average mother’s salary, between taxes and childcare, she loses $11,932.50 off the top. It is much more if there are more children.
Working Moms Need a Second Car
A second income usually means a second vehicle. The 2004 Bureau of Labor statistics regarding automobile expenses are astounding. The average annual vehicle purchase costs, which do not include finance charges, are $3,397/year. The annual finance charges on vehicle loans are $323/year. Gasoline, motor oil, annual maintenance and repair expenses come to $2,250 per year.
Average annual car insurance expenses come to $964 per year, and additional licenses and other fees can come to as much as $426/year. This works out to a cost of $7,360 every year for a mother to own a car to work outside the home. Added to the $4,412 in taxes, and $7,332 childcare costs, she is now spending $19,292 to hold a full-time job.
Working Moms Commute, Too!
Another cost of working is commuting. If a woman lives 20 miles from her place of employment, and the cost of commuting is $.25/mile times a 40 mile round trip, that is $10 per day. If she makes that trip 5 days per week, for 50 weeks out of the year, she could spend as much as $2,500 a year.
The Hidden Costs of Being a Working Mom
Many jobs require a specific wardrobe, and on average, clothing costs for working women is $100/month, or $1,200 per year. More hidden costs include eating out, convenience foods at home, office gifts or professional fees. According to Pre-K Smarties, these hidden costs can add up to $1,500 every year.
When the $19,292 per year for taxes, childcare expenses and transportation expenses are added to commuting costs, wardrobe and other hidden costs, the total cost of a woman working outside the home could be as much as $24,492! That leaves $3,508 PER YEAR profit for a working mother!!!
Working Moms May be Paying to Work
Based on the aforementioned annual averages of $28,000/year for women and $38,000 for men, the average household brings in $66,000 gross per year. After subtracting the previously mentioned expenses, totaling $41,514 (remember, most expenses will be double if there are two jobs), the total household income, with both parents working, is $24,486.
If the lesser income is forfeited, there is a tax savings, and childcare, commuting, wardrobe, transportation and other hidden expenses are eliminated from the household budget. This works out to a net family income, with only the male working, of $21,028.
The difference of one income versus two incomes is only $3,458, if the couple has only one child in daycare. Divide this out based on a 40 hour work week, and the woman’s hourly salary is $1.66. In addition, if the couple has two children in daycare, the second job not only does not add to the family income but it actually has a huge negative impact! The family will have $3,874 less income per year – in effect, paying to have a job! With a mother staying at home, she is also in a position to implement previously impossible cost cutting measures, not to mention the benefits to the children and family of having mother there every day.
Obviously, these averages will vary from state to state, job to job, and family circumstances. Nevertheless, it is certainly worth looking at the numbers to be certain a second income is really beneficial.
Sources:
The Money Alert
2004 Bureau of Labor Statistics
Pre-K Smarties
I think these stats are a more than a little skewed. I worked as a single mom, had a car that was older and paid for that was fuel efficient and had low insurance costs. I had one child in day care, and at that time did not grow any of my own food. I bought all my clothes at thrift stores and all my kids’ clothes on sale. I even managed to pay for insurance and have a little left over for trips and fun stuff.
Of course, this was years ago, but still, I managed to pay all my bills, so I had to be making much more than $3,458 a year. This article seems to assume a new car and fancy clothes. I don’t think I’ve ever spent $10 a day for gas and especially not $100 a month for clothes.
It’s statistics like this that make people like me laugh, because we absolutely know they are not accurate for most people.
I think you are supporting the point I was trying to make: It is possible, and perhaps even cheaper, for a family to live on one income. Kudos to you for making a tough situation work! You must be amazing, and the kind of woman I would like to get to know better.