The REAL Costs of a Second Income

Despite how crappy the economy is for middle class and lower middle class families, there are still jobs out there calling for qualified men and women to come fill the openings. If you’re a stay at home mom with marketable work skills, you’ve probably been hearing the call for a while (probably since you discovered that your partner’s income no longer covers all our needs). If you’ve heard the call of the work force and are looking to go back to work, you should probably hear me out first. I have a caveat for you.

Before you start putting your resume on HotJobs you should probably answer this question: “Will the money you make from the second income actually be worth it?” Do you know the real costs of a second income? Chances are that you haven’t really thought about them so let’s take some time to go over them.

In order to make working work you need to take the following costs into consideration.

Career Essentials

If you plan to work outside of the home you will need a wardrobe that is appropriate for your position. If you work at a fast food place, you need clean, presentable pants. If you work in a corporate setting, you will need a wardrobe consisting of professional attire including blouses, slacks, skirts, blazers, stockings, and other accoutrements that will allow you to meet the dress requirements.

Not only will you need a new wardrobe, which can cost you hundreds of dollars, you will also need to pay money for your smartphone and cell service, iPad, briefcase (if working in a professional capacity), shoes, office supplies not provided by your employer, and other items that are required to do your job. In the end, you could end up paying $1000 or more out of pocket. While this is mostly initial cost, you will have to update your wardrobe occasionally, and cell phone service is a once per month expense.

Transportation Costs

You can’t work if you can’t get there. If you are working to make a second income, chances are that you’ll need a second car. If you already own your second car outright, you don’t have to worry about car payments, but for most Americans there is the monthly car payment, which can be anywhere from $100 to $450. Then you have to add in the monthly costs of car insurance for this second vehicle, which can cost you an additional $30 to $100 per month depending on if your insurance provider offers a discount on multiple cars. You also have to consider the cost of fuel to get you from point A to point B. Yes, gas prices are currently falling, but by the time this post even hits the blog, the prices may be on the rise again. No matter where you work you are guaranteed a fuel cost of at least $100 per week.


Childcare Costs

After the initial career essentials cost and then the transportation costs, there are the costs involved in providing childcare for your children. If you have children at home you’ll need to hire someone to care for them, or enroll them in a daycare center. Either way, you’re looking at a daily childcare cost of $80 to $90 (this may be different depending of if the caregiver charges per child as well).

An Example


This is a lot of information to process so here is an example of what the costs look like for a mom returning to work.
Reba is offered a great job at a company paying $55,000 per year. She is excited about the prospect of getting back into the workforce after having four kids. Before she accepts the position, she and her husband sit down and go over the costs involved in her returning to work – they want to make sure that her working outside of the home is worth it.

So, here is what they came up with:

$55,000 = $2291 of income per bi-monthly pay period (before taxes). Her husband makes $50,000 per year so her income will bump them into the 25% tax bracket. $2291 – 25% ($572.92) = $1718.75 of net income per pay period.
Now, here come all of the cost deductions: $1718.75 (net income) – $900 (childcare) = $818.75 – $100 (gas) = $718.75 – $160 (lunch and coffee) = $558.75 of left over income per pay period. That means that after all of your hard work to make extra money, you are only bringing home $1117.50 per month. Could you pay a few extra bills with that? Sure, but does that amount really make the stress and time away from your family worth it? Don’t forget the other additional costs of work essentials and insurance on your second vehicle.

Personally, I would turn the job down because I make more than that per month now because I don’t have the added expenses of gas or childcare costs. If you’ve looked over the numbers and still think that a second income is worth the costs, then by all means, go out there and take that job by the throat.
Were you in a similar situation as Reba? What did you decide to do? Share your questions and comments. I’d love to hear them.

Comments

  1. Great post–I think too many people just look at the salary on the surface and don’t take the necessary time to really evaluate the job based on ALL contributing factors.

    • I know! I was offered a WONDERFUL job in a town about 2 hours from where I lived. I was willing to make the trip to work IF the pay was worth it. Once my husband and I sat down and crunched the numbers, it just didn’t make financial sense to take a job that only added $250 per month to our income. I could make that sitting at my computer in a day (if I really tried). While the prospect of getting to work outside of my house was attractive, the cost of gas, day care, and a whole new work wardrobe turned the prospect ugly real quick.

    • Oh my gosh… I’m not even looking to have my husband have a second job and I’m already considering he shouldn’t. LOL! That was a great breakdown and a big reality hitter. Thanks for the deep analysis that apparently neither I or my husband have ever done. Wow!

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