If it feels a little quiet around these parts, it is because I’m still adjusting to becoming a dad. I predict that it will continue for the next 20 years… probably longer. I’m learning quite a bit and I think a lot of this will be reflected in the my writing in the future.
One of the first questions that comes up with parenting, is who is going to take care of the baby? It’s Baby 101. The options can be split into two categories: someone in the family and hired help (okay, sometimes a combination of the two is possible). Taking care of a baby requires time and that is still a finite resource (until my flux capacitor shipment gets off backorder)… very often that’s going to cross over to personal finance.
Given that I work from home, on this online business that I like to attempt to grow (even if it is Syphilian at times), the natural choice would be for me to take care of the Little Man. My wife’s closeness to the military pension and a transferable free college education (transferable GI bill is great), her income, and health care, made it quite clear that she wasn’t an option to stay at home with Little Man. With no other family in Silicon Valley that eliminated the options that some other people choose.
Then there’s the option of hired help. A few months back, I looked into a local Kindercare and priced out their 5 day a week program at around $22,000 a year. That’s all after tax money, so it would be a little like taking away a $26,000 income away. Ouch! There were part-time programs, but the pricing structure is perhaps even more prohibitive. The pricing for just two days a week was around $14,000 if memory serves. It got to the point where the cost for 4 days a week was exactly the same as 5 days a week.
My wife and I next went on Craigslist to see about a nanny share. The theory is that a few hours a day off would allow me some time to focus on my work. It’s a good theory, but even nanny shares aren’t cheap. I typically found prices in the range of $18 to $25 an hour which, even at part time would add up to the $22,000 a year or more.
Lastly, we looked into an au pair. We found that this would be around $8,000 a year, but require giving up our office, which would require some significant downsizing. It wouldn’t be impossible and of all the choices seems to be the most practical solution. I would need to do more research to see if there are any other “gotcha’s” with this… well aside from having a stranger live with you all the time.
As I was thinking about the au pair solution another idea occurred to me. If I look at this differently, doing the child care myself would be like giving myself a raise of $25,000 in that it saves that $22,000 after tax cost… as long as my businesses don’t go completely in the tanker (and I have reason to think they won’t). There’s also the added advantage that me and Little Man could learn Spanish and Chinese together. That could be a tall order, Little Man is already two weeks old and he hasn’t even gotten to a remedial level of baby sign language. If this any indication of his learning aptitude, perhaps I should push his Taekwondo lessons back a month.