If you work in a professional job, the hidden costs of staying in your career after having children may make you reconsider, writes Brenda Ward.
The real costs of working are so high, it may not be worth working at all, for some mothers in two-income households, especially if they’re doing part-time hours.
After all their expenses are taken into account, women’s in-the-hand wages are eroded by three big expenses – childcare costs, transport and personal grooming.
Tauranga marketing manager Julie Cannon says she’s had a debate with her non-working friends, who envy her monthly salary.
“I tell them that if they add in all the costs I have, there’s not as much left as they’d think.
“For many years, I paid $200 a week in childcare. I have to buy petrol to get to work and pay for my car park. I also need a professional wardrobe for meeting clients, a regular appointment for a cut and hair colour. I’m in the kind of job [finance] where grooming is important.”
There are other expenses that people overlook, says Cannon, such as buying makeup and paying for some lunches, although she tries to bring leftovers to work when she can.
“I also think it’s important to socialise with my colleagues, so sometimes there’s coffees and food to pay for.”
School holidays were another big expense: “I have four weeks’ leave, but you have to cover the other six weeks. My wages were going straight out to pay for the school holiday programme.”
Childcare takes a big chunk of a working mother’s salary. Early childhood education organisation Te Rito Maioha Early Childhood NZ says Auckland fees for fulltime care of children under three range from $220 to $408 a week.
In comparison, Cannon points out that her non-working friends usually don’t pay for childcare, can wear casual clothing when they’re at home, spend a fraction of the fuel and parking costs, and most of their food comes out of the family’s supermarket budget.
The New Zealand Income Survey’s June 2015 figures show the median weekly income from salaries and wages was $882 as at June last year. However, the Ministry for Women says that women on average earn $300 a week less than their male counterparts.
So, let’s take a typical woman working full-time and earning the same as a man – the New Zealand median of $882, which is $746.50 after-tax. She would have as little as $306.50 left from her salary, after work-related expenses. If she were working part-time, the expenses would be almost the same, but her income would be even less.
She also recommends income protection insurance, another cost. “If our working mum’s salary is needed by the family, then they should also have some insurances in place that non-working mums wouldn’t.”
In her practice, she analyses the spending of many working mothers. “I tend to see that even if Mum and Dad have their own personal spending allowance, Mum tends to spend a chunk of it on the children – buying bits and pieces out of her own money, rather than the joint pool.”
Despite all this, she recommends women do return to work if they can. “In the short term, it isn’t as lucrative as we think being a working mum, but in the long term they’re probably setting themselves up better for their future.
“It costs more during our lifetime to be a woman than it does a man. The main reason for this is that women live longer, so we need to be able to provide for our living costs, and possibly aged care for longer than our male counterparts.”
Typically, a stay-at-home mum won’t be contributing to KiwiSaver (or any other type of retirement fund), so she doesn’t have the savings capacity that the working mum has. This gap has a huge impact in retirement, says Moore.
“And if her relationship does fall apart, our working mum at least has income to support herself during the trauma of a relationship breakup. Not having income is the biggest fear I see in non-working mums when their relationships fail.”
Kirsty Hunt of thedetail.co.nz, says one way to have it all – both an income and remaining at home – is contracting, even if you hate paperwork.
“When they’re contracting, mums can work the hours they choose around the kids, get paid excellent hourly rates and we offer a service that means what’s paid into their bank account is theirs to spend,” she says.
The Detail is a support service making it easy for professional mums to set up and operate on their own from home. “We take care of all their invoicing, GST, Tax, ACC and KiwiSaver.”
What it Costs
This is a rough guide to how a typical professional working mum’s expenses could look per week (yearly expenses, divided by 52):
· Childcare, one child $220
· Car WoF, rego, car insurance and fuel $100
· Parking $25 *(more in central Auckland)
· Basic work wardrobe $25 *($1700 per year, based on one suit, one jacket, two tops, one pair of heels and a handbag each year)
· Six-weekly haircut and colour $25 (annualised, divided weekly)
· Makeup, skincare, reading glasses $25
· Coffees, lunches, after-work drinks $20
TOTAL: $440 a week.
Subtract $440 from an in-the-hand salary of $746.50 and that leaves her just $306.50 a week to contribute to household expenses.
First published 22 May, 2017
By Brenda Ward
JUNO does not contain financial advice as defined by the Financial Advisers Act 2008. Consult a suitably qualified financial adviser before making investment decisions. This story reflects the views of the contributor only. Content comes from sources that JUNO considers accurate, but we do not guarantee that the content is accurate. Charts are visually indicative only.