THE.CONTENDER recently quit his job to be a proud stay-at-home father. This post is about the benefits of having dad at home, the financial adjustments we had to make in particular how we reduced our spending by £269 per month with a surprising end result!
Quitting work to look after the kids full time was quite a big step into the unknown for THE.CONTENDER . Work had dominated his life for the last 13 years. When the news leaked out that THE.CONTENDER was taking the new paternity leave for 6 months after Mrs C went back to work full time, it raised quite a few eyebrows, especially when THE.CONTENDER then quit his job at the end of his leave. Why was a top talent employee who works hard and has invested a significant amount of time in the company giving it all up?
Here THE.CONTENDER wants to share the reasoning (financial and family), the benefits - CGBB (Contender Great Big Benefits) and detailed analysis of the change to our finances (including our significant cost saving exercise).
The Reasoning
As the grandparents live in different countries the childcare is up to us. Options we considered after child number two arrived were:
- One of us had to stop working - would this be detrimental to that persons career - was it really important to us? The kids would benefit greatly from parental care.
- THE.CONTENDER gets a better job so his salary pays for the kids to go to nursery or nanny (current salary would NOT cover the child care costs (detailed analysis is in the second part of this post). The increase pay would probably mean increased work and travel - a worse situation for the family.
- We both go part time and take turns - this would have reduced our ability to save for financial freedom and hence delayed our move to the French countryside. Positives are that the children benefit from both parents being part of the upbringing and we would probably be less stressed for example we would not have to worry about the rush hour commute home each night to pick them up. Would we get paid less but still work more than the allotted part time hours - probably.
- We both stay in our current jobs and get a full time nanny / childminder or creche for five days - this would have reduced our saving rate as we would be subsidising THE.CONTENDER 's salary to the tune of around £500. Kids are brought up by someone else. THE.CONTENDER would have that cherished career though......
The Benefits - CTH (Contender Tribe Happiness...in October)
One parent at home has significant benefits in our opinion:
- The children have their fun loving daddy to look after them - no changes of child carer etc just consistency.
- As parents we have peace of mind no rushing home from work to pick the kids up. No problems of juggling work when they are ill.
- Click here for a list of benefits in having an actively involved father in the children's upbringing
- THE.CONTENDER not spending (and risking) his life on the motorway going to work - avoiding work stress, tiredness and the always on call culture.
- THE.CONTENDER has time to write this blog - cowabunga :)
- THE.CONTENDER 's wife likes her work as it is constructive to society and is well paid (more than THE.CONTENDER ). As THE.CONTENDER wasn't enjoying himself at work, so it was obvious THE.CONTENDER should stay at home!
- Our eldest child started nursery school which is mornings only - how do you juggle that with jobs and a one year old - lots do and hats off to them!
- Seeing the girls grow up is PRICELESS.
- THE.CONTENDER has time to invest wisely.....
- THE.CONTENDER learns new skills and has to step up to the plate quickly!
- THE.CONTENDER was up for the challenge
Nothing I've ever done has given me more joys and rewards than being a father to my children. - Bill CosbyPlease read on to find a detailed investigation into our financial considerations and impacts and how we reduced our spending by £269 per month. This leads to an interesting overall result.
The Finances - CFI (Contender Financial Impact - not a British furniture store)
Mrs C works full time as she earns more than THE.CONTENDER . THE.CONTENDER 's salary did not cover the astronomical child care costs for two children so THE.CONTENDER stopped work. Let's have a look at the total financial picture:
If we had both kids in nursery £2,500 per month (similar cost for a nanny \ carer). We had child care vouchers savings (pre tax benefit) of around £200 so cost was ~ £2,300 per month. THE.CONTENDER commuting 52 miles a day was costing around £45 per week ~ £200 per month. Business costs (clothes, food, coffee etc.) around £140
TOTAL OUT: £2,640
THE.CONTENDER 's post tax income was £2,100 + Child care voucher of £243 (other untouchable benefits were pension, 12% of pay, and £100 into a company share save).
TOTAL IN: 2,343
If we exclude the untouchable benefits the THE.CONTENDER tribe would be PAYING £300 each month for THE.CONTENDER to go to work, endure the commute and all the work stress.....
OK, THE.CONTENDER salary gone, we live on Mrs C's income. But with THE.CONTENDER at home surely we can reduce costs? THE.CONTENDER sensed an opportunity here!
- THE.CONTENDER needed a mobile phone - picked up a free old phone and the cheapest pay as you go tariff. THE.CONTENDER uses it to RECEIVE calls only - £5 saving per month
- Food and consumables shopping - deals deals deals
- Money off for 1st deliveries to home from all of the supermarkets
- Checking for all of the best deals - some super deals are out there at the moment when one comes along like buy toilet roll and get kitchen paper free we load up the car!
- Collecting points, yes they are there to drive consumption, if however essentials are bought to top up to the purchase amount that triggers the bonus points whee - free money !?
- Food shop per month before the birth of our second daughter £381 per month
- Now food shop averages £312 per month!!! We still eat very well and healthily.
- £69 saving per month
- Fuel is a fascinating one - we used to use the car to go on day trips each weekend easily costing £10 in additional petrol per week. With the baby around we have reduced the trips. We live in London - we pay for that privilege so we should use its amenities saving £22 a month
- Free loft insulation - the property is rented but we have received a grant guess impact on heating bill £5 per month
- Treats - we make ice cream cones and cakes at home - Mmmmmm lovely muffins- at £2 an ice cream over the summer in the park cafe and coffee easily saving £5 a month
- As THE.CONTENDER is doing the food shopping he caters for Mrs C packed lunches! Mrs THE.CONTENDER has stopped using the expensive coffee shops by her office and the canteen and actually takes a packed lunch - well done love! At £5 a day (£88 per month) at the canteen to probably only costing £1 for the packed lunch (£22 per month) with 5 weeks holiday deducted this works out a massive saving of 47/52*(88-22) = £59 per month
- Electric - as THE.CONTENDER is at home all day long - every wash goes on the washing line to dry - no more tumble drier (when possible). We have fitted energy efficient light bulbs and I wash dishes manually instead of using the dishwasher all the time. Say £4 a month saving.
- We employed a cleaner now THE.CONTENDER and Mrs C have invested in a brand new pair of Marigold gloves and do it ourselves- £100 per month
All things considered, loosing my salary has actually not been a big deal and actually a blessing.
When THE.CONTENDER was working, he was saving £1,000 per month whilst contributing £900 to household and child care costs the difference was business spend to make up my £2,100 pay per month.
This has been offset by the fact we no longer have to pay the £1,300 in child care (this was just for our eldest, both would cost £2,500). We have made an additional savings of £269 per month. Have more income from dividend paying stocks - £500 per month. We still manage to save at the same rate if not more than before!!!! THE.CONTENDER (and Mrs C!) were really surprised that we managed to do this. Additionally we have the extra benefits to the family - PRICELESS.
We all take the comforts of modern life for granted but do not always consider the cost. Looking at the list of savings above, THE.CONTENDER even astounded himself about how wasteful we were. Considering how much additional income for life is possible (£20 per month) from eliminating wasteful spending (£269 per month) after only one year, really takes me aback. Most of our wastefulness was not beneficial spending for society, it was generally bad for the environment. In our opinion the "frugality" discussed here has been hugely positive for the THE.CONTENDER Tribe. Can frugality be beneficial for you as well?
Why not
open a spread sheet and toy with some numbers. Collect all of your receipts for
a couple of months – what are you spending your hard earned cash on? Write down
your budget and look for opportunities. All said and done how much will it
really cost you for a once in a life time opportunity with the children?
As you can hopefully see from our actions it is possible to make significant savings, that can, quickly through investing provide an additional income for life. Have a go at scrutinising your spending today, maybe you will find some little gems of saving that can be invested for that
golden nugget of financial freedom and early retirement.
THE.CONTENDER
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MUFF here. A note on Child Care Vouchers and Paternity Leave for UK fathers.
ReplyDeleteIn the UK check with your employer if they offer child care vouchers (if they don't chase up human resources:). The vouchers are taken out of your PRE-TAX income saving the NIC's and Income tax this is a possible saving of up to £1000 per year. Child care vouchers can be electronic so payments can be made to an OFSTEAD registered carer through most child care voucher providers websites.
You can accumulate these vouchers even before the child is borne. So if you are thinking of starting a family or have a baby on the way it is a good idea to get these setup as quickly as possible.
MUFF was fortunate to even receive the vouchers in full while he was on paternity leave. In the UK MUFF could take over the "left over" maternity leave if your wife goes back to work. The calculations are a bit complex but basically
1. MRS MUFF went back after 6 months as she was entitled to full pay over this period.
2. MUFF took over had government pay for 3 months and then 3 months unpaid. All through this time all entitlements from the employer must be paid (pension and child care vouchers) - RESULT!
3. We had NO child care costs over MUFF's paternity leave hence we were considerably better off than MUFF working.
The extra child care voucher "bonus" is being used for a bit of baby sitting so MR and MRS MUFF get some quality time together which, as parents, is a heaven send.
MUFF