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You Can Afford to Work At Home

© Leslie Truex

About six years ago, I read an article in a newspaper supplement that profiled families that had downsized so that they could live on one income. Because I wanted to be an at-home mom, I read this article hoping to find the "secret" that would make my stay-at-home dreams come true. Unfortunately, that didn't happen. However, the article had a sidebar that discussed how much it costs to work. Using an excerpt from a book called Shattering the Two Income Myth by Andy Dappan (which I believe is out of print but if you ever see it, I highly recommend buying it), the short article provided information on how to calculate how much is spent on work-related expenses. This article changed my life. I truly believe that calculating how much you pay work should be the first step taken when one decides she (or he) wants to be an at-home parent or a telecommuter.

HOW MUCH DO YOU PAY TO WORK?

When I worked as a social worker, I made about $28,000 per year. Not a great salary but certainly, combined with my husband's, was decent income. So why was I always broke? Why did we have this great income but couldn't afford to go on vacation? Worse, we couldn't afford to take the full 12 weeks allotted for maternity leave when my second child was born. The reason was that I had no clue how much I spent to work.

Out of my $28,000 salary, about $2,600 went to the government as income tax. Another $1,300 or so went to Social Security and Medicare tax. About $800 went to state taxes. That brought my income down to $23,300.

By far my largest work expense was childcare. I was fortunate to find affordable childcare at $5,000 per year for two kids. Had I not been so lucky, my cost would have been twice that. Other expenses included a second car at $4200 per year in car payments, an extra $800 in year in car insurance, and approximately $1,700 for commuting (10 miles each way). I spent about $1,000 a year on work clothes, dry cleaning and other items and services related to my professional appearance. Lunch cost me about $1,000 per year ($20.00 per week). Because I worked and was too tired to cook, I spent about $2,600 on convenience foods and dining out. And, because I worked so hard, I spent about $1,200 per year on I-deserve-this-because-I-work-so-hard items and guilt items (toys, special outings) for my kids. So, when all was said and done, I made $5,800 per year. That's $111 per week... a full $2.79 per hour! Granted, I could have saved the $4,800 on lunch, convenience and feel-good items. That still would have put me at $10,600 per year income. In essence, over half of my income went to pay so I could work. And I didn't take into consideration the extra income tax my family paid because my income put us in a higher tax bracket.