There’s a thing I’ve noticed about the way some people think about how we should make decisions – they seem to think of every decision we make in terms of money. Of course, this is a blog about money, so naturally, money is the primary way we think about our decisions here. But as I’ve gained a little more perspective and life experience, I’ve also learned that the decisions we make aren’t – and indeed shouldn’t – be about money alone. Life is far too complicated for that.
Take the example of my career progress. I’ve seemingly gone the wrong way when it comes to my income, starting with my highest income when I was in my mid-20s, then steadily dropping over the years. My yearly income today is lower than it was 6-8 years ago. To most people, this doesn’t make much sense. Work, it would seem, is solely about money. Do the job that you can do that pays you the most.
But we know that money can’t be the only reason we work. Not only are certain jobs simply incompatible with us, but there are reasons why we don’t do particular jobs, even very high-paying ones. If you had the option to work 100 hours a week and make a huge salary, would you do it? Or might you opt for a lower-paying job with better hours that you enjoy more, supports your lifestyle, and fits you better? Your decision might be different depending on what you are looking for, but as we can see, it’s about much more than just money.
Daycare is one of those things that I used to think of as a purely monetary decision. Before I had kids, I would have thought the framework for deciding whether to send your kid to daycare was something like this:
- If you can make more at work than it costs you to send your kid to daycare, then you should opt for daycare.
- If you can’t, then you should quit your job and stay at home.
Yes, daycare unfortunately is about money – it’s the way our system works here in the United States (whether that’s the way it should be or not is another matter). I’m fortunate enough to be in a financial position where I can choose daycare.
But thinking that daycare is just about the monetary cost is a simplistic and naive way to think about it. And yet, I have a feeling that a lot of people without children seem to think that this is the way to think about daycare. In reality, though, it’s about much more than that. Sure, it’s about money. But it’s about much more than that too.
How Much Does Daycare Cost Us?
First, the money. Let’s look at the numbers for my current daycare situation. My wife and I send our son to a Montessori daycare located within walking distance of our house. Since we’re a one-car family, our daycare must be close enough that we don’t have to drive to it. My wife heads off to work early in the morning, so I’m the one that handles drop-off and pick-up, and without a car, it means I have to walk my son over to daycare, rain or shine. When there isn’t snow or ice on the ground, I bike him over to daycare. (On another note, I can’t even imagine how we would handle the daycare schedule if I was still working a regular 9-5 job where I had to be at the office at a specific time).
We have our son enrolled in the infant program, which is a full-day program for kids up to 16 months. Our daycare offers a 5-days per week option or a 3-days per week option. Infant programs are notoriously difficult to get your kid into due to lack of space, so when we signed up, our only option was the 3-day option. So, on Tuesday, Wednesday, and Friday, my son spends the entire day at daycare until I pick him up in the late afternoon. On Monday and Thursday, he’s at home with me.
And our daycare isn’t cheap. We pay $1,404 per month or a total of $16,848 per year. No matter what your situation is, spending almost $17,000 per year on childcare is a lot of money. The crazy thing is that daycare is currently our family’s largest monthly expense – larger even than our housing expenses. We live in a modest house right now, so our mortgage is only $882 per month. Even after paying property taxes and insurance, we still spend more on childcare than we do on our housing.
We’re spending a lot of money on child care – no doubt about that. Luckily, child care does get a bit more affordable as your children get older. My son is progressing pretty quickly and will be moving into the toddler room pretty soon. That’ll change his schedule to a 5-day per week schedule with regular school hours (8:30 to 3:30). I’ll end up gaining two days back, so that’ll remove a bit more pressure from my schedule.
The 5-day per week schedule currently costs $1,148 per month, saving us $300 per month in childcare expenses (total cost for the year will be $13,776 per year). If we want, we can add the extended day option, which will then make the 5-day per week schedule cost $1,390 per month. At the moment, we plan to transition him over to the 5-days per week. I’ll get us much work as I can during the day, then pick up my son at 3:30.
Does Daycare Make Sense For Me?
From a purely monetary standpoint, I still make more from my self-employment income compared to the cost of daycare. I’m not making huge amounts or anything from my writing and side hustles, but it’s enough that my income is still equal to what it was when I was working at my last job. And unlike my last job, there’s a lot more room for my income to grow and scale.
So from a purely monetary standpoint, daycare does make sense for me. It’s difficult to write without uninterrupted stretches of time and as long as I continue to write, I can continue to grow my business and hopefully continue to generate more income.
There are other reasons why we like daycare. My son was born during the pandemic, so he hasn’t been able to get much interaction with others. Just the mere fact that he’s been able to grow around other kids, even if just for a few days a week, I think is beneficial for his growth.
But even if I was barely breaking even, daycare would still make sense to me for one primary reason. I didn’t appreciate this before I became a parent, but I definitely appreciate it now. Being a parent is hard!
I used to think that parenting was something that people should want to do. But the reality is very different – at least for me. As much as I love my son and love spending time with him, it’s really difficult to interact, entertain, and importantly, foster a growing child for 8 or more hours per day, every single day of the week. Sometimes, I need a break. That’s worth paying for, especially since I’m fortunate enough to be in a position where I can pay for it.
It’s About More Than Money
Not too long ago, I watched a YouTube video from CNBC that looked at a family barely making ends meet to pay for childcare. In fact, the family was going into debt each month, as their income wasn’t enough to cover their expenses and their daycare costs.
Of course, as with any YouTube video, there were a lot of comments. Some of the comments pointed out that the mother wasn’t making much with the business she was doing and that she could simply quit doing that, stay at home, and be a full-time parent, saving themselves the childcare expenses in the process. It’s not quite that simple though and I’m willing to bet that the commenters that wrote these types of comments aren’t full-time parents themselves and don’t appreciate what having that break from full-time parenting does for you.
Paying for childcare works out for us because our family makes enough that this is a luxury we can afford. But even if it was a close call for us, we’d still probably opt for daycare, even if it meant hurting us financially in the short run. That’s how important the daycare decision is for us.
More Recommended Ebike/Scooters
Check out these other ebikes/scooters I've had the chance to do a review for:
- GEN3 Outcross Bike – The GEN3 Outcross is a solid, affordable fat tire ebike that does a good job of doing what I need it to do. It works great for city riding, giving me a smooth ride in all conditions. It’s works really well as a winter ebike since the fat tires give it good traction over snow and ice. Check out my GEN3 Outcross Review.
- Himiway Escape Bike – The Himiway Escape is an interesting bike for anyone looking for a moped-style ebike. If you’re a gig economy worker, the Himiway Escape is particularly interesting and it’s possible to think of it as an investment, especially if you can opt to do deliveries with the Himiway versus using a car. It’s not cheap, but you can definitely make your money back when you compare the mileage you’ll put on your car versus using an ebike. Check out my Himiway Escape Bike Review.
- Espin Sport Bike – The Espin Sport is a good ebike for someone who is looking for an ebike that feels and rides more like a regular bike. There are many ebikes that are really only bikes in name. In reality, they’re basically electric mopeds. The Espin Sport, by contrast, is a bike you could probably ride without the battery and you’d feel like you’re just riding a regular bike. Check out my Espin Sport Review.
- Varla Eagle One Scooter – The Varla Eagle One is an excellent scooter that can make sense for a lot of people. It can work as a primary mode of transportation. You can use it to work on gig economy apps like DoorDash, Uber Eats, and Grubhub. And it can also be a recreational vehicle if you’d prefer to use it for that. Check out my Varla Eagle One Review.
- Fucare H3 Scooter – The Fucare H3 is a fun scooter and I’ve enjoyed testing it out. For a daily commuter or quick trips or errands, the Fucare H3 is probably the scooter I’ll use. It’s portable and easy to maneuver, so it’s just easier to take on the road when I need it. Check out my Fucare H3 Scooter Review.
More Recommended Investing App Bonuses
For additional investing app bonuses, be sure to check out the ones below:
- M1 Finance ($10) – This is a great robo-advisor that has no fees and allows you to create a customized portfolio based on your risk tolerance. You also get $10 for opening an account. Check out my M1 Finance Referral Bonus – Step-By-Step Guide.
- SoFi Invest ($25) – SoFi Invest is an easy brokerage account bonus that you can earn with just a few minutes of work. Use my SoFi Invest referral link, fund your SoFi Invest brokerage account with $100 and you’ll get $25 of free stock. I also have a step-by-step guide for the SoFi Invest referral bonus.
- Moomoo (5 free stocks) – Moomoo is a free investing app currently offering 5 free stocks (usually worth around $75-$100) if you open an account using a referral link and deposit $2,000. Read my Moomoo referral bonus guide for more information.
- Webull (5 free stocks) – Webull also gives you 5 free stock valued between $3-$3,000 each if you open an account using my referral link. Here’s a guide I wrote about how to earn your free stocks using Webull.
- Robinhood (1 free stock) – Robinhood gives you a free stock valued between $2.50-$225 if you open an account using my referral link.
- Public (1 free stock) - Public gives you a free stock valued between $3-$70 if you open an account using my referral link.
More Recommended Bank Account Bonuses
If you’re looking for more easy bank bonuses, check out the below options. These bonuses are all easy to earn and have no fees or minimum balance requirements to worry about.
- Chime ($100) - Chime is a free bank account that offers a referral bonus if you use a referral link and complete a direct deposit of $200 or more. In practice, any ACH transfer into this account triggers the bonus. This bonus is easy to earn and posts instantly, so you’ll know if you met the requirements as soon as you move money into the account. I wrote a step-by-step guide on how to earn your Chime referral bonus that I recommend you check out.
- Upgrade ($100) – Upgrade is a free checking account that’s currently offering a $100 referral bonus if you open an account and complete three debit card transactions. These bonus terms are easy to meet, so it’s well worth doing this bonus as soon as you can. Importantly, this bonus says that it’s now scheduled to end on October 31, 2022. As long as you get your account opened before October 31st, you should be eligible. Here’s a post I wrote with more details: Upgrade $100 Referral Bonus – Step By Step Directions.
- SoFi Money ($350) – SoFi Money is a free checking account from SoFi. They’re currently offering a $25 referral bonus if you open a SoFi account with a referral link and deposit $10. You can also make an additional $300 as well if you complete a direct deposit. This is a good bank that is also 100% free, so you won’t have to worry about managing this account. Here’s a post I wrote with instructions on how to earn your SoFi Money bonus: SoFi Money Referral Bonus: Step By Step Guide.
- Fifth Third Bank ($250) – This offer is limited to customers in the following states: Florida, Georgia, Illinois, Indiana, Kentucky, Michigan, North Carolina, Ohio, Tennessee, West Virginia, and South Carolina. If you don’t live in one of those states, you won’t be able to open an account online but you can still open an account in-branch if you happen to be visiting a city that has a branch. This is a fairly easy bank bonus to earn, especially since there are plenty of data points showing what will trigger the direct deposit requirement. In addition, you can open the Fifth Third Momentum Checking bank account, which comes with no monthly fees or minimum balance requirements. Read my guide on this bonus here.
- Current ($50) – Current is a free fintech bank that’s offering new users a $50 referral bonus after signing up for an account using a referral link.Current is an easy bonus to earn and also gives you access to three savings accounts that pay you 4% interest on up to $2,000. That means you can put away up to $6,000 earning 4% interest. That’s very good and makes Current an account I recommend to everyone. Check out my step-by-step guide on how to earn your Current Bank bonus.
- OnJuno ($100) – OnJuno is a fintech/neobank that is currently offering a $100 referral bonus if you open an account using a referral link and complete a direct deposit of $250 or more. The account has no fees or minimum balance requirements. Even better, the bonus posts immediately after you meet the requirements. If you can meet the direct deposit requirements, OnJuno is an easy bank bonus that’s worth snagging. Check out my OnJuno referral bonus guide here.
- Varo ($50) – Varo is a free fintech banking app similar to Chime or Current. It’s currently offering a $50 bonus to new users that open a new Varo account with a referral link. The bonus for this bank is very easy to meet, all you need to do is spend $20 within 30 days of opening your Varo account. Check out my step-by-step guide to learn how to earn this bonus.
- Fairwinds Credit Union ($100) – Fairwinds Credit Union is offering a referral bonus for users that sign up using a referral link. Fairwinds has no fees or minimum balance, so this is a particularly easy bonus to earn. Since this is a smaller credit union, my gut instinct tells me this offer won’t be around long, so if you’re in a position to meet the bonus requirements, grab this bonus before it’s gone. Here is my step-by-step guide on how to earn your Fairwinds Credit Union bonus.
- Novo Bank ($40) - Novo bank is a free business checking account that’s currently offering a $40 bonus if you open a Novo business checking account using a referral link. In addition to being a good bank bonus, Novo is also a good business checking account. It has no monthly fees or minimum balance requirements and operates a good app and website. Indeed, it’s the business checking account I currently use for this blog. Check out my post on how to easily open a Novo account.
- Spiral ($50) – Spiral is a fintech bank that's currently offering new customers a $50 signup bonus after opening a free checking account with them. The Spiral referral bonus is especially good because it's a free checking account and doesn't require a direct deposit to earn the bonus. Here is my step-by-step guide on how to earn your Spiral Bank bonus.
- One Finance ($50) – One Finance is a fintech bank that’s currently offering a $50 signup bonus if you open an account using a One Finance referral link and have a direct deposit of $250 or more. This is a completely free bank account with no minimum balance requirement, so if you can meet the requirements, it’s worth doing. Check out my One Finance referral bonus guide here.
- Albert ($150) – If you can manage to do a real direct deposit, Albert is an easy account you can use to earn a referral bonus. Here’s a review about Albert I wrote. And here’s a step-by-step guide on how to earn your Albert referral bonus.
- Netspend ($20 + 5% Interest Savings Account) – Netspend is a company that provides 5% interest savings accounts. If you sign up using my referral link, you’ll get a $20 signup bonus once you make your first deposit into your Netspend account of $40 or more. That means you get a 5% interest savings account and a free $20 to start! Make sure to check out my in-depth guide on how to set up these accounts.
Kevin is an attorney and the blogger behind Financial Panther, a blog about personal finance, travel hacking, and side hustling using the gig economy. He paid off $87,000 worth of student loans in just 2.5 years by choosing not to live like a big shot lawyer.
Kevin is passionate about earning money using the gig economy and you can see all the ways he makes extra income every month in his side hustle reports.
Kevin is also big on using the latest fintech apps to improve his finances. Some of Kevin's favorite fintech apps include:
- SoFi Money. A really good checking account with absolutely no fees. You'll get a $25 referral bonus if you open a SoFi Money account with a referral link, and an additional $300 if you complete a direct deposit.
- Upgrade Bank. Upgrade is a free checking account that’s currently offering a $100 referral bonus if you open an account and complete three debit card transactions. These bonus terms are easy to meet, so it’s well worth doing this bonus as soon as you can. Note that it’s now scheduled to end on October 31, 2022.
- Novo Bank. Novo bank is a free business checking account that’s currently offering a $40 bonus if you open a Novo business checking account using a referral link. It’s the business checking account I currently use for this blog.
- M1 Finance. This is a great robo-advisor that has no fees and allows you to create a customized portfolio based on your risk tolerance. You also get $10 for opening an account.
- Personal Capital. One of best free apps you can use to monitor your portfolio and track your net worth. This is one of the apps I use to track my financial accounts.
Feel free to send Kevin a message here.
Yes, Kevin daycare is expensive. Maybe you can get a part time job there that might cover some of the daycare costs.
Here are some of the job openings at a Montessori school…Yes I realize you are in The Land of 10,000 Lakes.
> Technology Education Coordinator
> On Call Substitute
> Classroom Assistant
Just a suggestion…
Not something I’d want to do. I have more fun and can make more writing and doing other things.
ya, day care’s our largest expense as well. But it’s still cheaper than hiring a nanny. Ours is $384 a week – 3 days. That’s about $12.8/hr. This savings aside, I also wasn’t sure how dependable a nanny would be. So we went the day care route.
Hmm, when you break it down by hour, it doesn’t seem that crazy.
FP, you live in the Midwest, correct? We are in a HCOL area on the East Cost where a reputable daycare costs $2,700-$2,900 a month (full-time). A Montessori school is even more.
Yes, I live in the midwest. Definitely imagine it’s even more expensive in the HCOL places like NYC, LA, SF, DC, etc.
What’s your thoughts on Montessori schools? Do you think it’s worth it? Would love to see more parenting posts.
To be honest, I really don’t know what the Montessori is all about. We just went with this daycare because its the closest one to our house and has good reviews.
I’m not sure what your household income situation is, but we have two kids in daycare in the midwest, paying about $34,000 total this year. However, with the latest stimulus bill we should get about $7500 from the Childcare Tax Credit.
Otherwise, do you have access to a dependent care FSA? They have increased the contribution limit to about $10,000 for those.
Agree! Also, staying at home would incur the opportunity cost of a career break or add to the one already incurred depending upon the length of the maternity leave.
Totally agree. It’s also a very, very temporary cost, at least assuming you don’t then do private school. And it’s often worth it, even if it is a loss for those years, just to stay in the work force and keep building your career or business. It’s definitely not just about the numbers.