Is it costing
your money to have a 2 income family? It could be. You may
find that a second salary brings in much, much less than you
think it does.
A few years ago, after the birth of our second child, my
husband and I were trying to decide whether or not it would
be possible for me to stay home.
At first we thought that since we were just about breaking
even, there was no way we could ever make it happen. But
when we decided to actually put pen to paper and calculate
our bottom line with and without my salary, we were quite
surprised.
What we found was that it was actually costing us to have
both of us working.
While that may not be the case for everyone, you may find
that the second salary brings in much, much less than you
think it does.
According to Jan MacGregor, a financial consultant and
former analyst, "There are people out there who are
expecting to be able to meet their bills better (after they
re-enter the work force) and never realize they are either
working for a loss or for something like $4,000 a year
(after expenses)."
That may seem hard to believe, but if you consider the many
"hidden" expenses of a two-income household it is often the
case. There are, of course, the obvious expenses such as
child care and commuting costs. Some of the hidden expenses
are the money spent on lunches, more take-out and
convenience food for dinner, dry cleaning bills professional
clothing. There can be higher medical costs due to increased
exposure to illnesses for children who are in daycare.
Many families hire a housekeeper or gardener to keep up on
the household work that they don't have the time to do.
A significant factor is your taxable income. A second salary
can push your taxable income into a higher tax bracket.
While the tax issue in and of itself does not eat up the
entire second salary, when you add in all the other expenses
of a two income family, you might find that it's not worth
it to have both parents working.
Here is a link to MacGregor's cost of living chart that uses
a second salary of $40,000 as an example:
Cost Of Living Chart
If you are considering having one parent stay at home, the
best thing to do is to actually calculate your income and
expenses, taking into consideration the difference in
taxation. You may find that you can in fact afford to stay
home with your kids.
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Sharon Davis is the owner of
2Work-At-Home.Com
and
Work At Home
Articles and the
Editor of the site's monthly ezine,
America's Home.
In her spare time she reminisces about what it was like to
have spare time. To subscribe to her free ezine,
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