Is it better to work or stay at home with children

This is a question that my wife and I are going through right now and I thought I would share our current thought process. Hopefully you can apply some of it to your own situation.


An example

We will go over our calculation process to make the decision. Please bear in mind that these are not our exact numbers.


The calculator can be found here.

This is the calculator I used to calculate our hourly pay. The hourly pay is what you will base your decision to stay at home or work on. The purple rows are customisable inputs that you can change for your situation.

Often, we will calculate our pay before considering what it costs us to work every day. You can see in the example our pay is $30.21 per hour. Looks pretty good and seems worthwhile to go to work for. But most of us have to pay to go to work. Pay for clothes. Pay for transportation. Pay for food. Pay for childcare. Pay for work activities and so on. After we consider our costs to work, our hourly pay has suddenly dropped to $18.91. This is not much more than minimum wage and makes the decision to go to work not as clear cut.

When performing your calculation remember to include any government assistance you may receive for staying at home. You may not have been eligible as a worker for any income related assistance, but now you have made the decision to stay at home with bubs your income has dropped substantially, and you may now be eligible for assistance. This may be a big factor in favour of staying at home.

Now that we have come up with our hourly pay figure of $18.91 we must decide whether to stay at home or go to work. If you are on lower income with high work-related or childcare costs, then this number may even be negative. Making the decision to stay at home an easy one.


It’s not just about the numbers

  • If it were we would go to work. An extra $757 a week is nothing to sneeze at. But the question is, is $757 worth the sacrifice? Questions you should ask yourself:

  • Is my job worth $18.91 an hour, more or less? After calculating childcare costs, some parents will determine their time is more valuable than what they are being paid for.

  • How likely is it that childcare costs will increase? If costs are increasing greatly each year, the case for staying at home becomes stronger.

  • How likely is it that work income will increase over time or I will receive a promotion if I stay? If a promotion is likely, maybe staying at work will be best for you and the family. Leaving your job will set you back on that front.

  • How difficult will it be to get back into the workforce? Do I have skills? This is hard to predict, but important nonetheless. If you feel ‘lucky’ to have landed your job and would struggle to find another like it, the decision to stay at home will be hard. Are you in an industry or position that will be hard to return to? You may need to return a few steps behind where you left. Are you prepared for that? You should consider not just the current impact on your decision, but the lifetime impact.

  • How many children need childcare? The more children you have, the higher the childcare costs and the more reason to stay at home, instead of work.

  • Can you afford to cover the cost difference between working and not working? Some people do not have the choice to stay at home, no matter how low the second income will become. You need to calculate if you can afford to survive on one income.

  • What is the price you put on the time with your child(ren)? This is the ultimate question. Do you trust others to raise your children the way you want them raised. The peace of mind of getting to raise your children the way you want them to be raised may be priceless. In that case, stay at home would be a good choice if the numbers work.


Final Thoughts

For now, we have decided that my wife will stay at home. Yes, we would have made more money with her working, but for us it came down to three reasons:

1/. When we broke down her hourly wage, she is worth much more than that at home.

2/. We can afford to survive on one income. Yes, it will be tighter than normal, but we can make the adjustments to our expenses.

3/. Most importantly, we get to raise our own child. Yes, full time childcare is a challenge, but we would not give that up for anything. We can’t get that time back and to watch them grow into little humans. This is well worth the cost of not working for us. We get to be their teacher and have a large say in their progress. I think it will be very rewarding and we will never regret the decision to stay at home, whereas we could potentially regret the decision to go back to work.

Part time work may be on the cards for the right job, then we can get the best of both worlds. Extra income and time with our child.

It would be nice if I could stay at home too but unfortunately, we still need one income! This is why I am working hard to achieve financial independence by age 50 though. So I am not tied down to a job and I can make the decision to stay at home with the family and have a large input in the future of our children. That is much more valuable to me than having to work until I am 65, locked behind a cubicle.



The information contained on this site is the opinion of the individual author(s) based on their personal opinions, observation, research, and years of experience. The information offered by this website is general education only and is not meant to be taken as individualised financial advice, legal advice, tax advice, or any other kind of advice. You can read more of my disclaimer here


Share your thoughts below. Have you had to make this decision before? What factors did you consider? How hard has it been to get back to work after parental leave? Do you regret being a stay at home parent? Or do you regret going back to work too soon?