Looking for thoughts on childcare

[kona]

We are expecting #2 this summer. We currently have a nanny/caregiver who is with us about 12-15 hrs/week. I have discussed that we are not completely happy with her. I think it's a combination of things but mostly M really wants to be home more (really full time).

How much of an increase should we be looking at if we keep the nanny and have her watch both kids?  The little one would be about 3 months most likely and O will be just over 2 at that point.  I know that the cost usually goes down as the child gets older but we are adding another one too.

Unfortunately, this decision will probably become largely financial. We were able to save M's salary the last time she was pregnant. Any time off she takes will be completely unpaid.  I'm trying to be more realistic about our budget this time around; we both have older cars that will need repairs and eventually will need to be replaced, we have been surprised by how much money we spend on O as well.  I'm working my 2nd job to save for a down payment on another house in a few years so I'd rather not use that money in the monthly budget.

Sorry, I know I'm rambling here, I'm really struggling with these decisions that we will have to make in the next few months. 

I know that having M go back to work full time and paying for 2 kids in some type of childcare is our best financial move.  So how do we balance that with M's desire to stay home with our kids?   

[2brides]

take this with a grain of salt since we hired our nanny nearly 10y ago.

We paid our nanny about $15 to start (with twin 3m olds) and by the time she left 3y later, was up to about $16.50/hr (about a 5% increase each year (which is more of an increase than L or I got!) Plus, we had to pay our portion of her taxes which was another huge chunk of change.

Her salary+taxes wasn't too much more than my take home pay, but I would have been miserable as a SAHM. So, we viewed it as a short term trade off as I still have that same job and make more than I did back then.

It is hard for us to do a cost benefit analysis without the numbers (cost of child care in your area, how much M would bring home, how much flexibility she has in her hours - that of course, I don't expect you to share

Whatever you decide, good luck!

[bexincanada]

It's definitely a tricky one to figure out without the numbers. If you haven't already, doing a solid budget that takes into account all expenses and income possibilities would be a good idea. It's the only way to know for sure. Even if M. would earn more than the cost of daycare, there may be some other areas you could shave your budget if she really wants to be a SAHM.

I'd recommend looking up Gail Vaz-Oxlade for budgeting help, her website has lots of useful tools. We managed to go down to one income and pay for my grad school without going into debt by being really careful with our money - granted we didn't have the mortgage then.

Good luck!

[kona]

Yeah we don't even pay her $15/HR now. We gave her a bonus both Christmases she was with us and a bonus on her 1 year anniversary but not a raise. M and I haven't had raises.

I feel like I'm doing everything. Including trying to figure out a budget that would work. We can get by month to month but big expenses, like car, college saving, retirement saving and vacations go out the window. I don't think I want to live like that.

[karlamo]

This is based on the cost of living in your area. For us in the Boston area, $15/hr is the low end of a nanny. Average is $18-20/hour. With that said, we have our boys at an in home day care and pay $80/day which is cheap.

Here are some of my random thoughts.

Will O be going to pre-school? Kids usually start at 3 for that. Have you factored that cost into M staying at home?

I always tell people who are looking to go down to 1 salary to do a trial run. For the next 3 months, take M's salary and set it aside and see if you can live solely on your salary(ies) alone. If you can, great, continue to do that and keep saving her paychecks till she stops working. If you find yourselves struggling then you have time to come up with a new plan of action before she quits her job and you're truly stuck.

[Stringy]

I've tried to figure out this somewhat too. If she really wants to stay home and you can pay the bills- I do think it's worth it. My wife worked part time until last fall so was only earning 80% but we had no child care costs. She went back last fall when we bought a house and M went to day care part time. After my leave this summer I am gonna cut back to 80/85% for a few reasons. One just being I want to be home more with the new baby and that way we won't be spending more on day care next year than this. (M will still go- it's like preschool, and we have grandparent help). I *think* I have mathed this all out and we can pay our bills but we may need to cut back on retirement or something else for a few years. But it's just one of those things I think is worth it and luckily can swing. It does come down to budget - paying for this baby to go to day care for the part time I'm staying home with her was about even.