Baby coming? What to consider before you quit

Dear Liz: My husband and I have decided that next year we want to have a baby. So we have at minimum a year and nine months to make sure we’re financially prepared. I did some cursory Googling and I’m already a bit overwhelmed. I’m not sure where to start.

I know I should figure out how much the medical costs will be, but how do I figure out how much everything else costs? Do you have a checklist of things we should be aware of and consider? One thing I could use some guidance on is whether I should stay home or put our baby in daycare so I don’t miss out on work benefits like healthcare and 401(k) matching. I like my job and bosses, and if I leave I will have to find a new job that may not be as good when I decide to reenter the workforce. But if we decide to have a second child, I’m worried that childcare costs will be too much for two young children. Know of any good books on this subject?

Answer: By leaving work you wouldn’t be missing out only on benefits. Research by economist Stephen J. Rose and Heidi I. Hartmann, president of the Institute for Women’s Policy Research, found that women’s average annual earnings decline 20% if they stay out of the workforce for one year and 30% if the absence stretches to two or three years. Many find it tough to rejoin the workforce after extended absences.

Quitting work is the right choice for some parents, but you shouldn’t do so simply because you fear childcare costs. For a few years, those costs might eat up most or all of your paycheck, but such expenses decline over time. If you continue to work, your earning power and retirement contributions will continue to grow.

Meanwhile, some parents find they can reduce childcare costs by staggering their work schedules, tapping family members or sharing a nanny. Research the childcare options in your area so you have an idea of what’s available and the costs.

You can continue your research into budgeting for a child with the excellent, constantly updated book “Baby Bargains” by Denise and Alan Fields. This field guide offers product reviews and realistic assessments of what you actually need to buy for your child and what you don’t.

Another good resource is financial writer Kimberly Palmer’s “Baby Planner,” available on Etsy.

With all your planning, keep in mind that parenting always presents surprises. You may decide to stop after one child or keep going until you have a houseful. The important thing is to remain flexible and don’t assume you know how your future self will choose to live.

One of the best pieces of advice in Facebook Chief Operating Officer Sheryl Sandberg’s bestselling book, “Lean In,” is that women not cut themselves off from career opportunities because of how hard they think combining work and child-rearing will be. “What I am arguing is that the time to scale back is when a break is needed or when a child arrives — not before, and certainly not years in advance,” she writes.


  1. The first thing the couple should do it decide who will be staying home. Second you start halving your take home pay, spend half and save half. This will do a few things, one it will test to see if you can live on a smaller income and second it will give the same amount of time to stay home removing money each week from bank like a paycheck when you are not working any longer. The other choice is you should find out what the average daycare cost in your area and start saving that amount or at least half and you will be able to have a couch to pay with. You will also find that once your money runs out in the bank you can decided if you can live on just one person income.

    • Liz Weston says

      Again, I think couples need to think longer term about whether quitting is the right option, given all the costs involved.

  2. One other thing to keep in mind is that having kids isn’t about the money, it’s about the kids. If you want to have kids then have kids. I don’t even advocate waiting. My experience and my philosophy is that if you wait until you’re “ready” to have kids, you’ll never have kids. Of course, it’s good to go in with your eyes wide open, and understand that there will be costs and sacrifices, and anticipate what you can. But you’re never going to be able to prepare for everything. Liz’s last two paragraphs here say it great.

    Also, staying at home vs. going back to work right away is often more of a lifestyle choice than an economic one. If you want to stay home, you’ll figure out how to make it work if you’re willing to make the sacrifices. If you want to go back to work, you’ll figure out how to make that work as well. And what you think you want now might be completely different after you’ve been home with a new baby for a few weeks. As Liz said “The important thing is to remain flexible and don’t assume you know how your future self will choose to live.”

    My wife and I got married right out of college and “planned” to wait to have kids until after she finished grad school. Instead she got pregnant on our honeymoon. OK, she still got her PhD in less than 5 years, and her career has gone very well. One of the key things that made it work was that as a husband-wife team, we agreed on our goals (she would continue with her career rather than staying home) and that made it easier for us to agree on how we would make those goals work and agree on how to sacrifice for those goals. Now our first child is learning how to drive, and our third child is learning how to crawl. Our middle child was the only one we “planned” for, but things have worked out well with all three of them because we were always on the same page. Good luck!

    • Thanks so much for sharing your perspective, Derek. Sandberg’s book also mentions the importance of having a partner who’s really a partner, both in planning and in making the day-to-day work. It makes a huge difference.

  3. “if you wait until you’re “ready” to have kids, you’ll never have kids.”

    Well, but some people find that that’s a risk worth taking. Throughout my 20s and early 30s, my philosophy was “Maybe I’ll want kids someday, but I know I don’t want them anytime soon, and if that means I won’t have them ever, I’m fine with that.” I’m fast approaching the point where “won’t have them ever” is looking more and more likely. I have no regrets.

  4. Sure, Johanna. That notion is more for people who want to have kids “someday when we’re ready”, not for people who don’t want to have kids (or who don’t think they want to have kids).

    Although personally I think married couples that avoid having kids are missing out, but that’s a different discussion for a different blog. 😉

  5. I agree with Liz about thinking about the long term. I am a home childcare provider and had left a management job to watch my children for a few years and make a income at home and when I was ready to leave the home I had lost a lot of group in my field in both skills, money but also others thinking that while I was gone I did not thing but be home. If I could do it over I would of found someone like me and stayed working