Being newly-married, my wife and I have frequently discussed our career goals and how we want to manage our family both now and in the future when we have kids. I grew up in a family in which both of my parents worked outside the home, but when you run the numbers it often turns out that two incomes aren't better than one.

The main culprits for the financial failure of second incomes are a tax system that savagely penalizes second incomes and the high cost of quality child care. The result, among financially savvy couples with a single high wage-earner, is that spouses with much less earning power often stop working until the kids are in school. Those who stay on the job do so not for the money, but for the challenge and fulfillment they derive from work outside the home. ...

Peggy Ruhlin, a financial planner and certified public accountant in Columbus, Ohio, found it necessary to relate some hard truths about second incomes to her clients. She cites the case of a highly paid executive whose wife worked for a government social work agency. Her position was consuming and paid less than $25,000 a year, but it was deeply satisfying because she was helping people in need. Ruhlin ran through the numbers and showed that the wife was taking home a grand total of $1,500 a year when all was said and done. ...

Ruhlin says the Social Security cut was especially unkind because, on retirement, the wife will be entitled to the equivalent of half her husband's entitlement (he'll still get the full amount) even if she never worked at all. Her contributions from a relatively low-wage job would never entitle her to more on her own, and so her payments will never do her any good.

On top of all this were child care, commuting and other expenses. When the planner broke the news, the woman became teary-eyed. She started considering volunteer work with more flexible hours.

Even aside from tax considerations and other costs mentioned in the article, there are plenty of intangible benefits to having an adult focus on managing the home.

(HT: Sound Mind Investing Blog.)


Further, on the myth of the working mother:

George Gilder points out that "women in the home are not performing some optional role that can be more efficiently fulfilled by the welfare state. Women in the home are not 'wasting' their human resources. The role of the mother is the paramount support of civilized human society. It is essential to the socialization of men and of children. The maternal love and nurture of small children is an asset that can be replaced, if at all, only at vastly greater cost. Such attention is crucial to raising children into healthy productive citizens. In other words, 'the hand that rocks the cradle rules the world.'"



Email blogmasterofnoneATgmailDOTcom for text link and key word rates.

Site Info