Staying Home With Baby

The decision to stay home with your new family member or return to work can really tear at some parents' hearts. There are lots of unknowns, but guessing at the financial costs and expenses should not be one of them. What it will cost you to stay at home, or choose to return to work, is one aspect of the decision that you can get down in black (or red).

Taxes are one of those things that change when you have a child, with that now deductible family member. You also receive child tax credits. Be sure to make the calculations to figure out two things: how much (less) you'll have to pay, and who should be claiming the baby costs on their tax return.

Childcare is a big question that carries plenty of worry for new parents. If you return to work, will you use childcare at all, or try to get family members to cover those early mornings and late nights? Either way, this is probably going to be the biggest cost for you to think about with the new baby. Oh-and don't forget to consider who will stay at home when the baby's sick-day care outlets will not generally allow a sick child to come to the daycare, or stay in daycare once they become ill.

Clothing that you once wore to work isn't likely going to be needed if you stay at home. That also likely means lower dry cleaning bills. Be sure to work out what you spend on work clothing when you do this calculation. Hair and beauty treatment costs, magazines, and other personal services can also likely be cut back.

Another consideration is time going to and from work as well as the cost of travel. Even if you ride share, or take the bus, these costs will drop tremendously if you stay at home with your newborn.

Food costs, gift costs and charitable giving are all parts of the working world. Even though you are on a budget, once in a while, you'll likely want to eat out, participate in the office pool, and support someone's charitable venture. These costs drop off if you stay at home.

When you consider whether or not to return to work, don't forget the non-monetary aspects. Do you love your job? That might be enough to get you back in the office even if you don't make a cent after all the costs. Whatever you decide, take the time to work out the finances so that your decision is the best one for your family and future.