What Are You Really Earning?

If you're working at a regular job right now, you're probably torn between bringing in a second income yet wanting to be home with your kids. One frustrated mother decided to sit down and figure out just how much she was making after having to fork out for child care, taxes, and other amenities because of her job. She discovered that the nanny she had hired to watch her kids was making the same amount she was—only the nanny was the one spending all the time with her kids. Finding a way to work from her home soon became top priority.

Here's something else to think about:
The $40,000 your husband makes and the $25,000 you make do not add up to $65,000 a year. Remember, It's not how much you make, but how much you keep. You may have expenses that you are not considering. Child care, commuting costs, meals out, vehicle maintenance, federal and state taxes, and social security can all eat up your hard-earned cash.

Even more eye opening is the following list of costs a normal working mother accrues. This list was compiled by Larry Burkett in Women Leaving the Workplace (Moody Press, 1995).

1. The cost of child-care: about $350 per month for one child and $600 per month for two. This figure does not include wages lost when your child is ill, medical expenses with group child care, or the fees that always seem to be associated with children's groups (gifts, trips, etc.).

2. Transportation costs: $250 per month, including car payments, maintenance, and gasoline costs.

3. Work clothes costs: estimated cost about $50 per month.

4. Eating-out costs: estimated at $75 per month. As most working mothers know, there is a fatigue factor that comes along with managing a home and job. This is often manifested in hurried meals, eating out a lot, or ordering in pizzas.

5. Miscellaneous expenses: $100 per month.

Obviously there may be other expenses (such as hiring a maid to clean your home), but when you add these all up, the total is a minimum of $750 (but probably closer to $900). Don't forget that all these costs, except for child care, are paid with aftertax dollars, and the additional earnings of a working wife may push the family into a higher tax bracket.

If we assume that the median income of a working mother is $14,500, then that means a net return of slightly more than $300 per month. Based on a 40-hour workweek, a working mother nets around $2 per hour for her time.

If that same working mother used her services at home to reduce the family's food bills and shopped at discount stores and garage sales, it is quite possible she would net more savings for her family than the income she generates.

Once you figure out your own financial situation, you may find that you don't need that second income after all—at least not one that is earned outside your home. And you can come home to be with your kids and work at a business that you love, instead of one that you have to go to and where you may be unappreciated and underpaid.