The Cost of Being a Stay at Home Parent

Transcript

Let's talk about the choice to have a parent stay home with the kids. At the surface, it means dropping an income, and that turns into an immediate financial problem. Can we afford this? Even if we can, is it financially responsible? What about the working spouse? Is it fair? Right away you can sense there is more to it than the money, even though it makes total sense that the money is the first thing you think about.

A quick note before we get going. Most of the research on this measured mothers, because that is overwhelmingly who has been doing it. About one in five stay-at-home parents is now a dad, and that number keeps climbing. The math works the same whoever stays home. When I say mothers, it's just because that is what the studies looked at.

Start with what wealth means to you

Let's take a step back. I want to ask you a question, and I'd encourage you to write it down. Maybe pause the video. When you think of the word wealth, what does it mean to you? What comes to mind? Rich, money, a big house? There is no right answer, and don't feel guilty about whatever shows up. Just let it happen. It's worth answering this for yourself instead of borrowing someone else's definition, because a wealthy life can be so much more than money.

Father Time is undefeated, after all. It's the old question: would you trade places with a 90-year-old for a billion dollars? Probably not. I don't want to put my answer in your head, I want to open yours. Maybe wealth to you means having control over your time, being the one at every school pickup, working 12-hour days on something that's yours, or taking a trip with your parents every year while they're still here. The more detailed you can be, the better.

Your definition of wealth helps with these conversations, because there is a cost to everything, and I mean that pretty literally. There is no free door here. You pay for daycare in dollars. You pay for staying home in income and career momentum. You pay for two big careers in evenings and weekends you don't get back. Every version costs something, which is why the wealth question should come first. If you know what you're trying to buy, you can look at a price tag and tell whether it's worth it. If you don't, sometimes the price tag decides for you: we can't afford that, that's too much.

Door number one: the cost of childcare

Childcare isn't getting cheaper. Between 1990 and 2024, the price of daycare and preschool in this country went up about 263%. General inflation over that same stretch was about 133%. So childcare has climbed at roughly double the rate of everything else for 30-plus years, and it's still running about one and a half times inflation right now.

In Ohio, the average cost of infant care runs over $10,000 a year. Policy Matters Ohio, a nonprofit research group, ran that against the federal affordability standard, which says care shouldn't eat more than 7% of household income. To clear that bar for one infant here, an Ohio family would need to earn close to $150,000 a year. The median household income in Franklin County is about $75,000.

Why does that 7% matter? Because it's the government's own definition of affordable, and center-based infant care doesn't meet it in a single state in the country. So if you and your spouse have looked at each other and said "we can't afford this," that's a lot of American families, by the federal government's own math. For a typical Columbus family, one baby in full-time care lands like a second mortgage payment. And that's one child. Add another and the number roughly doubles, while your income doesn't. You don't get a raise for having children. Then you fill in the cracks with everything else that comes with kids. It can be a lot.

Door number two: the cost of stepping away from work

The other door has a bill taped to it too, and it's usually larger. We know about the missing paychecks, but there is also the time out of the workforce. The Center for American Progress ran a scenario. A 30-year-old making $50,000 takes three years off. That's $150,000 in wages missed, another $140,000 in raises and promotions she never climbs back to, and about $125,000 in retirement, because the match stopped and the compounding stopped with it. You may also lose the Child and Dependent Care Tax Credit, which requires earned income for both spouses. States differ on their own childcare assistance, so look up your own state's programs. Call it a $400,000 price tag. Quite a difference.

Which direction that moves for you depends almost entirely on what you do for a living. If you're a nurse, a teacher, an accountant, or someone with a trade license, your credentials mostly wait for you. If you're in software or sales, where what you're worth is tied to a current network and current tools, three years out can really hurt.

But hold that $400,000 loosely, because we should take it apart. That number is gross. Not disgusting, though some of you might think so, but gross as in before adjustments. First, deduct what the alternative would have cost. Five years of care for two kids in Ohio runs north of $80,000. Then you save some in taxes. You also drop a second commute, a second car, and lunches out. Net all of that out and $400,000 gets smaller. Someone in a different job in a different state could build one where it's $600,000, or $100,000. You can play this game all day. Every number in this video is different for you than it is for me. The goal isn't to make a firm decision off this alone.

The costs that don't show up on a spreadsheet

We honed in on the financial costs, but there are many types of cost. There's energy. There's mental health. There's identity, especially if a lot of yours is tied up in your work. There's your marriage, which I think is a big one, maybe the biggest, because whoever's home tends to become the default parent for everything, and that accumulates. There are friendships, which for a lot of people are work friends. There's the energy of coordinating daycare pickup and drop-off, and the health cost of your kid getting sick at daycare and getting you sick. You get the point.

I'll briefly mention a study from 2012 as food for thought. Gallup interviewed more than 60,000 women, some employed and some stay-at-home moms. The stay-at-home moms reported more sadness, more anger, and more worry than the moms who were employed. Did they say why? They did, and it wasn't the kids or being home. The mothers with the worst outcomes were the ones who were home and wanted to be working. The struggle also concentrated among lower-income stay-at-home moms, many of whom are home because childcare is just too much.

That raises the obvious question: if it's too much, why not work for the extra money? The problem is what's called a benefits cliff. Ohio's childcare assistance stops at 145% of the poverty line, about $39,000 a year for a family of three. The day you cross it, you pay full market rate. There's no tiered step-down. Picture a parent earning $14 an hour with two kids in care. That's $20,000-plus in childcare against a paycheck that might clear $25,000 after taxes. You're basically working to work. Take it with a grain of salt, but I think the bigger takeaway is that we like agency. We like to make our own choice, which is really the whole topic here.

What families say about their own setup

What if we just ask families how their setup went? In houses where both parents work full-time, 83% said the arrangement helped the family financially. In houses where dad works full-time and mom isn't employed, 19% said that. Then they asked those same people about their kids. In the single-income houses, 85% said the arrangement had been good for their children. In the two-income houses, it's around 50%.

Those are all fairly high percentages, so it seems like everybody believes they made the right call. I think that stems from a decision you can't really take back. Once the kids are out of the house, they're out of the house, and it's hard to keep having kids as you get older. You can get philosophical about it: things happen for a reason. Whether you stay home or not, it's your story, and there's nothing to change. No regrets.

What about the kids?

We've focused on the parents. What about the kids? Researchers have been at this for 50 years: 69 studies pulled together on mothers working when their kids were small, Quebec's study on daycare when it dropped to $5 a day, and long-running studies here in the United States. Add it all up and the effect on how kids turn out is actually quite small. What parents do matters far more than who's watching the kids at two in the afternoon.

The one thing that keeps showing up is that it depends on the home. Kids from stable homes got no measurable lift either way, but kids from struggling homes did better with good care. So it's really about what the kids are coming home to. Whether you stay home or work doesn't have a huge impact on the kids, as long as you have parenting values and you're trying your best to raise them right. It has a far greater impact on the parents: on us, on marriages, on relationships, all of it.

So what do you actually buy?

That puts it back on you: choosing what you want to pay, and defining what wealth means to you. If it costs your family $200,000 over five years for one parent to be home, then you spent $200,000 on something. You bought years that happen exactly once and don't come back around. For a lot of families, that's the best money they'll ever spend. And maybe you'd rather pay for daycare, keep your career moving, and put that money toward a different set of goals. That's a fine answer too. Designing your own life still feels like a weird new thing, which is kind of crazy when you think about it.

If you want somewhere to start, take a couple of questions, answer them separately from your spouse, and compare. Finish this sentence without using the word money: "I'll know we made it when..." I love that one. It's really the "how much is enough" question. Or: what's something you'd do even if nobody paid you for it? Or: when your kids are 30 and describing their childhood to someone, what do you hope they say?

One more thing before I let you go. When Pew asked mothers what they'd pick if they could have any arrangement they wanted, part-time comes up more often than the share of mothers who actually work part-time, which makes sense because not everyone has that option. It's an option that gets forgotten. If you can drop to 30 hours instead of 40, that's a great starting point. Or stay home until the kids are in school. At the end of the day, design it the way that's best for your family. And if you want any help, shoot me a message. Until next time.

Common Questions

How much does infant childcare cost in Ohio?

The average cost of center-based infant care in Ohio runs over $10,000 a year. Measured against the federal affordability standard of 7% of household income, a family would need to earn close to $150,000 a year for one infant to be considered affordable, while the median household income in Franklin County is about $75,000.

What is the lifetime cost of one parent leaving the workforce?

The Center for American Progress estimates that a 30-year-old earning $50,000 who takes three years off gives up roughly $150,000 in wages, about $140,000 in future raises and promotions, and around $125,000 in lost retirement savings and compounding, for a gross figure near $400,000. That number shrinks once you subtract the childcare, taxes, and commuting costs you avoid by staying home, and it varies widely by career and state.

What is a childcare benefits cliff?

A benefits cliff is when earning slightly more money causes you to lose an assistance benefit all at once, rather than phasing it out gradually. In Ohio, childcare assistance stops at 145% of the poverty line, about $39,000 a year for a family of three. Cross that line and you pay full market rate, which can mean a raise leaves a family worse off.

Does a parent staying home lead to better outcomes for kids?

Decades of research suggest the effect on how children turn out is small on average. What parents do matters more than who provides care during the day. Kids from stable homes showed no measurable difference either way, while kids from struggling homes tended to benefit from good care. The larger impact tends to land on the parents and the marriage.

Hosted byNick GeorgeCFP®, ChFC®, CLU®, IWA™FounderView bio →

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