2938: Looking At Our Daycare Costs And Why We Send Our Son To Daycare by Kevin of Financial Panther

[00:00:00] This is Optimal Finance Daily, Looking At Our Daycare Costs And Why We Send Our Son To Daycare by Kevin Ha of FinancialPanther.com. And I'm your host and personal finance enthusiast, Diana Merriam. Welcome back to another bonus Sunday episode. This is where we get to hear from one of the other shows in our podcast network. And today's comes from Optimal Relationships Daily. So with that, here's Greg as we optimize your life.

[00:00:34] Looking At Our Daycare Costs And Why We Send Our Son To Daycare by Kevin of FinancialPanther.com.

[00:00:41] At the end of each year, my son's daycare sends us a PDF that details how much tuition we paid. It's a helpful bit of information to have. My family is fortunate to be in a position where we don't have to budget to meet our financial goals. So, we're always admittedly unclear about how much we've spent in any given category each year.

[00:00:59] Outside of our mortgage, taxes, and other fixed costs, I often don't know what we actually spend on things. Daycare tuition is a fixed cost though, so I do know exactly what we spent in that category.

[00:01:12] And last year, according to our payment receipts, our family spent $16,029.99 to send our son to daycare five days per week from 8.30 a.m. to 3.30 p.m.

[00:01:26] Depending on your situation, that might seem like a lot of money, or it might seem like a reasonable amount to pay for childcare.

[00:01:33] Children completely change your life. No matter what your situation is, if you have kids, you're going to have to pay for childcare.

[00:01:40] You'll either pay for it with your time, or you'll pay for it with your money.

[00:01:44] In this post, I want to do a bit of analysis on our daycare costs and go through the thinking we did when deciding to send our son to daycare.

[00:01:53] Analyzing our daycare costs

[00:01:55] As previously mentioned, last year we paid $16,029.99 to send our son to daycare five days per week from 8.30 to 3.30.

[00:02:05] He's in daycare year-round, minus a short winter break, various holidays, and any days he misses because we're traveling or he's sick.

[00:02:13] That gives him about 35 hours per week of daycare for about 48 to 50 weeks per year.

[00:02:19] 35 hours per week of daycare seems like a good balance to me.

[00:02:23] Since I don't have a regular job, I've got a lot of flexibility with pickup and drop-off times.

[00:02:27] If I was still working my regular lawyer job, my son would have to stay at daycare until 5.30 or 6.

[00:02:34] It'd cost us a little more and would give us far less interaction with him during the week.

[00:02:38] Picking him up at 3.30 is pretty ideal.

[00:02:41] He still spends time eating breakfast with me in the morning, gets his time at daycare,

[00:02:45] and still has plenty of time in the later afternoon to spend at home with family.

[00:02:49] From a cost perspective, it seems to be worth the cost also.

[00:02:53] So, if he's in daycare for 35 hours per week for 50 weeks, that's a total of 1,750 hours in a year.

[00:03:01] Breaking it down on an hourly basis, we paid $9.15 per hour to send him to daycare.

[00:03:08] From a pure arbitrage standpoint, if we can make more than $9.15 per hour,

[00:03:13] then it seems to make monetary sense to send him to daycare.

[00:03:17] I was actually a bit surprised at how little we paid per hour for daycare after running the numbers.

[00:03:21] Even on the low end, if he missed an entire month of daycare,

[00:03:25] we'd still have spent just $9.58 per hour for daycare.

[00:03:30] My assumption was that daycare costs us much more than this.

[00:03:34] Obviously, these costs are relative, and when added up,

[00:03:36] it does add up to a lot of money over the course of a month.

[00:03:39] But when you're in a financial position like my family is,

[00:03:42] we're really not paying that much for daycare.

[00:03:46] Daycare is about more than just money, too.

[00:03:49] A question I'm sometimes asked is why I don't simply stay at home with my son.

[00:03:53] After all, I don't have a regular job anymore,

[00:03:56] and the job I do have is writing words on a blog.

[00:03:58] I could easily be a full-time stay-at-home dad.

[00:04:01] I have two answers for this.

[00:04:03] First, from a purely monetary standpoint,

[00:04:06] if it costs just $9.15 to $9.58 per hour for me to send my son to daycare during the week,

[00:04:13] then so long as I'm able to make more than that per hour,

[00:04:16] it makes sense for me to work and have him go to daycare.

[00:04:20] I'm not killing it compared to what some bloggers are able to do,

[00:04:23] but I'm earning enough to make more than $9.15 to $9.58 per hour.

[00:04:29] Just from a monetary arbitrage standpoint,

[00:04:32] it makes sense for us to send my son to daycare.

[00:04:35] But the second reason, and the main reason I send him to daycare,

[00:04:39] is that I think it's good for him.

[00:04:40] I'm not an expert on childcare by any means,

[00:04:43] and I don't want to delve into the very muddy waters of how to raise children.

[00:04:47] But to me, getting interaction with other kids and developing social skills

[00:04:52] is a good thing for his development.

[00:04:54] Even if I didn't earn any money,

[00:04:56] I'd still opt to send my son to daycare

[00:04:58] simply because I think it's a positive experience for him.

[00:05:01] I think some people fall into this trap

[00:05:04] where they think of every decision in terms of money.

[00:05:06] In reality, the decisions we make are never just about money.

[00:05:10] They're about the other things,

[00:05:12] some conscious, some unconscious.

[00:05:14] Life is far too complicated to base our decisions

[00:05:17] on what puts or keeps the most money in our bank account.

[00:05:20] I opted to quit my job as an attorney years ago

[00:05:23] because it was the right decision for me.

[00:05:25] It wasn't right from a financial standpoint, though.

[00:05:28] I doubt I'll ever make as much blogging as I could as a big law lawyer.

[00:05:32] But money wasn't the only reason I made the decision to quit law.

[00:05:35] I wanted other things, too.

[00:05:38] I don't know how people balance kids and normal jobs.

[00:05:42] One thing I'm happy about

[00:05:43] is how quitting my job to write and work for myself

[00:05:46] changed the flow of my day-to-day life.

[00:05:48] Before, it felt as if my life had to revolve around my job.

[00:05:52] These days, it's the exact opposite.

[00:05:54] The work I do fits around my life.

[00:05:57] I have no idea how our family would have balanced childcare with full-time jobs.

[00:06:01] Even getting my kid to daycare on time in the morning is difficult for me.

[00:06:05] The idea that I'd not only have to get my kid to school,

[00:06:08] but also get myself to work by a set time seems impossible.

[00:06:12] If you've followed this blog before,

[00:06:15] the turning point that led me to quitting my job

[00:06:17] was when I got lectured at work for not getting into the office by a specific time.

[00:06:21] I can only imagine I'd have been getting more lectures by now

[00:06:24] since I would probably be late for work every day.

[00:06:26] And picking up my kid on time is another thing I can't imagine doing with a regular job.

[00:06:32] When I worked at my regular job,

[00:06:34] I rarely get out of work before 6pm.

[00:06:36] I'm sure I'd have figured something out eventually.

[00:06:39] But the fact that I can go pick up my son whenever I need to is huge.

[00:06:44] Our situation is working out pretty well.

[00:06:46] My wife has less flexibility with her job since she has set office hours.

[00:06:50] She works for herself, so she has more flexibility than others,

[00:06:53] but still less flexibility than someone like me.

[00:06:56] Our current situation seems ideal.

[00:06:59] One parent works full-time, the other parent still works,

[00:07:02] but with far more flexibility,

[00:07:04] allowing us to work around the daycare schedule

[00:07:06] and get the right balance of time with the parents and time at daycare.

[00:07:14] You just listened to the post titled

[00:07:16] Looking at our daycare costs and why we send our son to daycare

[00:07:20] by Kevin of FinancialPanther.com

[00:07:23] And I like this post from Kevin a whole lot.

[00:07:26] Now, I don't have children,

[00:07:28] but when I consider how much I would want to devote myself to them if I ever did,

[00:07:33] it somehow seems impossible to do it alongside a full-time job.

[00:07:37] And though many parents adapt quite well to this

[00:07:40] and probably have that same initial concern,

[00:07:43] it's still worth it to encourage any people planning to be parents

[00:07:47] to think hard about the lifestyle changes that will come with it.

[00:07:50] It's too common for my taste.

[00:07:53] How many people choose to be parents

[00:07:55] out of a sense of obligation or responsibility

[00:07:59] and carry a fair amount of very subtle resentment with them as a result.

[00:08:04] And surely even something as beautiful as parenting

[00:08:07] will bring with it sacrifices and mixed emotions,

[00:08:10] but the point is that we want to approach parenting

[00:08:13] like we would approach anything.

[00:08:14] We want it to be an active choice rather than a reactive one,

[00:08:18] especially for something so irreversible and so important.

[00:08:22] It's great that we have the possibility of adapting really well,

[00:08:25] but it's not something to bet on,

[00:08:28] at least not for me, that adaptation.

[00:08:30] So just reflect on whether or not the decision to become a parent

[00:08:34] and what comes with it is something that is truly for you

[00:08:37] and something that you truly understand as best you can before having a child.

[00:08:41] And that's going to bring us to the end, everybody.

[00:08:43] I thank you so much for joining me today.

[00:08:46] And if you like this one,

[00:08:47] you'll want to come back tomorrow

[00:08:48] as there's going to be another parenting post

[00:08:50] that you're sure to enjoy just as much.

[00:08:52] So I hope to see you there,

[00:08:53] where your optimal life awaits.