The Real Cost of Being a Working Parent

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In the past, we covered the national average costs for different types of child care and how it may be directly related to the gender wage and wealth gap. But Eryn Schultz, a CFP known as Her Personal Finance online, reached out to say the data was vastly undershooting the realities of working parents she works with. She joins us today to share the real costs of childcare and what working parents in the US contend with.

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Mentioned in the Episode

• The Money with Katie Show episode on child care costs

• The Money with Katie Show on how kids impact FI

• Audio clips around birth rates: Vice President Vance, President Trump, Malcolm Collins, Alex Clark

• The Money with Katie Show episode on the “birth rate panic”

• “The Motherhood Penalty vs. the Fatherhood Bonus” (New York Times)

• “The Hummingbirds” from economist Kathryn Edwards

• Milton Friedman clip on family as the fundamental unit of society

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Transcript

Eryn:

Childcare is so expensive that it is very difficult to not have two working parents in order to afford having children, even at the public school level. We talked about this idea that a nanny is an easy button, but it’s not really. Because you have to register as a household employer. On the days that the nanny gets paid time off, like what are you doing for childcare? If you want socialization, you don’t want to pull your kid out of a social daycare setting. We talked about “mothers day outs” existed before there were two working parents, because it’s important for your 2-year-old to learn how to talk to other people. And so then you’re at a point where you’re paying for a nanny and a socialization program, and that’s very difficult to do without two incomes.

Katie:

Welcome back to The Money with Katie Show. I’m Katie Gatti Tassin, and today we’re talking about the biggest myths about being a working parent, because the childcare situation in the United States is in my mind, the lynchpin that explains the vast majority of the gender wage and wealth gap data. In the past, we’ve covered the national average costs for different types of childcare, the almost exclusively female childcare workforce and the general untenable of being a working parent. So we will link those in the show notes.

But one such instance of our previous coverage resulted in Eryn Schultz, a CFP known as Her Personal Finance online reaching out to me and basically saying, “Hey, those national averages, they are way undershooting the cost and the complexity if you ask me or my clients.” So I was like, cool, come on the show, let’s talk about it.

But before we do that, let’s get grounded in the cultural and the political macro that these micro financial decisions are playing out in. Because there’s one other listener question, one other little piece of listener feedback from one of those previous episodes that’s been hanging out in the back of my mind and inbox ever since, and today is going to be a perfect time to weave that in.

So Eryn and I are going to talk in more depth about those national averages where they might be understating reality shortly. But in the meantime, I was really curious about how parents are talking to one another about this. So as part of my digging for this episode, I went down a rabbit hole on the “Working Moms” subreddit, which is an active, vibrant, and from what I saw, a pretty supportive environment. It has around 117,000 members. They’re commiserating with one another. They’re asking for marriage advice, they’re swapping tips on how to navigate inflexible workplaces and crazy schedules. But despite all that mutual support, the experience left me feeling sort of distressed. There were posts from stay-at-home moms who wanted to reenter the workforce but just couldn’t see a way forward. And there were questions from people who were clearly at the end of their rope with a partner who just didn’t get it and was making their life feel disproportionately harder.

So after getting a solid sense for what the moms were talking about, I was like, you know what? Let’s go find the Working Dad subreddit and let’s see what they’re struggling with. I want to get the other side of the story. But there isn’t a “Working dads” subreddit. Now, don’t get me wrong, I found parenting subreddits where dads were posting, and it wasn’t like they’re trading tips about how to make their wives more obedient home chefs, but it was clear that this problem of balancing work and home life seems uniquely tricky for women…if the communities on Reddit are any indication.

And here’s one post that seemed to encapsulate the challenge well.

[Reddit post]:

In a couple months I’ll turn 38 years old. I have an incredible partner in my husband and a 17 month old little boy who is absolutely beautiful inside and out. We, and maybe especially me, are so torn about having more children. Having a child has been wonderful in so many ways, but it has also been difficult. I’ve struggled with how it’s changed my life much more than I thought I would. I’ve lost my identity more than I thought I would, and I know it will take time to reemerge as an even better version, and I know it will happen, but it’s hard.

I’ve been back at work for six months and needless to say, it has been difficult. I enjoy my work and I’m great at what I do, but I feel constantly split in two, trying to reconcile the ambitious professional I am during the day with the parent and partner I want to be the rest of the time. I returned to a company in the midst of astronomical growth and was caught up in the storm almost instantly. It’s not going to stop. The pace will continue for quite some time. I’m both hanging on for the ride and trying to find my footing.

Outwardly, I think I’m doing very well and I’m being given opportunities for advancement and greater responsibility without being asked or knowing if I want them inwardly, my job is one of the aspects of the old me that I really want to hang on to, and yet I have felt alone trying to do it while being a parent. I’m not sure when that part of things is going to feel better or if it ever will. Maybe the struggle is just part of the reality of wanting slash doing both.

When I look ahead into the future, I can’t really picture only having one child. My husband and I love our siblings beyond measure. Our child won’t have any cousins for a very long time, if ever. I always told myself that I’d never have another child for my first child. I always wanted it to be for us, but here we are. And giving our child a sibling is by far the biggest driver, practically speaking, if we’re going to do it, it will be soon. We don’t want a huge age gap and biologically, I don’t want to wait much longer.

But I don’t want to start over again. I don’t want to be pregnant or go through labor and delivery. I don’t want to have to tell my work in the middle of the storm that I’m leaving again. I don’t want to struggle with coming back. I don’t want to feel even more divided than I already do trying to find enough time and energy and patience to pour into our next child the way I was able to with our first. I don’t want to stress about finding daycare, dealing with sick days, and fighting for moments where it’s just me and my husband, or even just me. I’m worried that if I have to divide my attention another way that there will be nothing left for myself. It’s something that I’m already struggling with.

So many people seem to just know that they want another. They know it so deeply that the rest of it doesn’t matter. The challenges and the stresses are just accepted as part of the package and aren’t given too much headspace. I always thought I’d be that person too, but here we are.

Katie:

We’ll get right back to it after a quick break.

So when I decided to interview Eryn, she pointed me to that post in particular as endemic of the sorts of conflict that she hears about most often from the people she works with. And what jumped out at me about that story was the conspicuous lack of concern about the cost of care. Like the parents’ challenges seemed so much more esoteric, like splitting her own attention too many ways, feeling pulled in too many directions, long-term concern about whether her kid will be lonely if he remains an only child.

And it struck me while reading that, yes, obviously the expense of raising a child can be an extreme stressor. And yes, it might even be the make or break consideration when deciding whether to have more children, but in this context, it sort of felt like a tactical offshoot of a much larger question about time and attention and identity.

The person who wrote this mentioned wanting to continue working because it felt like a way to hang on to the old me, which is a sentiment that I’ve heard from other new mothers. And also a reality that’s often absent from political conversations about what moms want or the decision to return or not return to work after having children. Obviously the income generated is a huge component of that choice, and I don’t want to minimize that.

But at the risk of sounding trite, these types of decisions seem to be a lot bigger than just dollars and cents. The dollars and cents just represent ways that either exacerbate or ease these more inescapable challenges.

And of course, we are producing this episode in a sociopolitical context in the US that is weirdly obsessed with and committed to the idea that women need to buck up and do their part to circumvent the collapse of civilization.

VP Vance:

Our society has failed to recognize the obligation that one generation has to another is a core part of living in a society to begin with. So let me say very simply, I want more babies in the United States of America.

President Trump:

Because we want more babies. To put it very nicely.

Pronatalist Foundation:

The goal of our organization is not to convince people who have no kids to have two kids or one kid, it’s to convince people who have four kids and to make it easier for people to have four kids, to have nine kids.

So the Pronatalist Foundation, which we run says no matter what, we are going to have demographic collapse in the developed world and it will wreak havoc on the economy.

Alex Clark Podcast:

It could be seen as pretty radical to be telling women you need to be having more kids. The plummeting birth rate is starting to frighten people. Why is that a concern?

Alex Clark Podcast:

Because of the economic consequences of a plummeting birth rate. The reason policymakers are starting to ask the question is because we can’t pay for all of the social programs we’ve been used to paying for if the population is shrinking and if the working population is shrinking. And so that’s the situation that we’re in now.

Katie:

I did an episode last fall about how disingenuous and thinly veiled I find that birth rate panic. So we will also link that in the show notes.

But today we’re talking to Eryn about that tactical offshoot of being a working parent and maybe more candidly a working mom because women’s economic health is inextricably tied to this question in a way that men’s really isn’t, or maybe it’s fair to say is, but in the opposite way, since men usually earn more money after they become fathers.

Let’s spend a quick minute digging into this economic dynamic, before we zoom down into the level of the individual family, because as we know, these dynamics disproportionately impact women. The Reddit post reminded me of the work of the economist, Katherine Edwards, who recently wrote, “The US has never pursued an agenda to give women equal economic footing to men. And it shows. The labor market is an unregulated mess, no paid sick days, paid medical leave, paid family leave, scheduling notification requirements right to work part-time or request flexible arrangements. Keep in mind in the US you can still be fired for in sick. The price of childcare has risen more over the last 30 years and the price of food, energy, healthcare, and even prescription drugs, it is often more expensive than in-state tuition or typical mortgages. And that price is only ever going to keep going up. And while Congress will pour hundreds of billions into creating more manufacturing jobs, they’re seemingly unconcerned with stagnant pay among and shortages of teachers, nurses, and childcare workers, three of the most heavily female occupations. These aren’t hurdles, they’re barriers. There’s no jumping over them, no moving around them. They keep women in place,” which sets up her metaphor of modern women as hummingbirds working really, really hard, almost imperceptibly hard, just to stay floating in one place.

In another piece, she wrote about how often the advice for women in America amounts to little more than marry rich and stay home, best of luck to you. “They’re told the answer to their problems is to focus on the traditional female role of raising the kids. Yet for most mothers who do so, it’s not a choice they typically need and want a job, but report that they cannot find or maintain one in part because childcare is so scarce and costly, they’re more likely than their employed counterparts to lack a higher education and to be in poverty. Staying home is evidence of the economic insecurity associated with motherhood, not a solution to it.” So that was again, Katherine Edwards, she is an economist.

And too often I find that this conversation can lead to some misguided objections, which do feel worth addressing in an episode about care work and paid labor. For example, is it “bad” to commodify care work? So I received an email a while back that basically said, “Hey, I totally agree with you that the US is an abnormally and unnecessarily challenging environment in which to start a family when compared to all of our peer countries, and that we have been basically gaslit into believing that this is a reasonable way to structure society and our lives. But don’t you think the push to commodify the work of caring for others or outsource the raising of children to other people is a bad thing?”

And I’ll say, I have absolutely no doubt that this question was asked in good faith. And it’s something that I’ve wondered myself because it’s true that we should always be skeptical of capitalism creeping into every aspect of our lives, including our interpersonal relationships. That is a legitimate concern. But this also strikes me as frankly an old conservative talking point that’s often wielded to guilt women specifically into becoming stay at home parents. This line of questioning is almost never used to justify why, say, dads should spend more time in the home. It’s almost always a prescription for traditional gender norms dressed up as concern for the wellbeing of children. Or a vague objection to market capitalism

Because here’s the reality of the current dynamic: Care work is labor. That’s true whether the recipients of your care are animals or children or people with disabilities or people who otherwise just cannot care for themselves. And because it’s labor that has traditionally been performed exclusively by women, we are socialized to see it as a labor of love, work that should be performed out of the goodness of your heart, that lacks any economic value in the traditional sense. And you’ll notice this theme emerge anytime we talk about why people, mostly women, who end up working as early childhood educators or care workers in nursing homes or teachers don’t need to be paid more.

You’ll hear someone say, well, you don’t want someone doing such an important job for the money. Remember, we don’t say this—we don’t have this hangup about surgeons, pilots, people who build bridges. Then we are more than happy to compensate highly for such important and valuable work. And sure, it certainly requires more work to train as a surgeon or a pilot than as an early childhood caretaker. So I’m not trying to be glib. Just that the “important jobs should be done out of genuine desire rather than exchange for money” principle is not applied evenly and in fact is almost always split down gendered lines.

And so the notion that being compensated for this labor somehow cheapens or devalues it ignores the fundamental economic logic of the rest of our labor force and conveniently locates us back at square one, where the assumption is that it should be done for free and provided privately within the confines of your own home, because it’s that important.

And finally, on the note of commodification, everyone from Friedrich Engels to Milton Friedman has described the nuclear family as the core unit of a capitalist economy as absolutely integral to the functioning of a capitalist marketplace.

Milton Friedman:

The fundamental unit of our society is a family. It is the interest in the family that gives people an incentive to work, to save, to slave, to make sacrifices. It’s the interest in the family that gives parents the incentive to provide their children with better opportunities than they themselves have, so that I believe that primary responsibility in the parent is essential if we’re going to maintain a decent society.

Katie:

And a key piece of that assumption of nuclear familyhood is a full-time unpaid worker in the home who effectively both raises the next generation of laborers and cooks launders and cleans for the (male) laborer in the home, things that said laborer would need to do for himself where he not in such an arrangement, which now provides the time and energy that can be devoted to paid work or leisure. And we know that the data bears out that theoretical relationship.

In this sense, Engels wrote about how the traditional nuclear family was the bedrock of profit because what could be more valuable to a capitalist than a laborer who brings along with him another worker who does not require any payment?

So all that to say, I think the commodification of care work argument coopts a language of anti-capitalism by doubling down on some of the most capitalist ideas, which is just worth keeping in mind in the political climate that we are in right now, where there is much hand wringing about women’s roles, a recommitment to gender norms and a panic about falling birth rates.

I talked about this more on my other podcast, Diabolical Lies, which deals more explicitly with feminist issues, in an episode called “How Reactionary Feminism Infiltrated the Mainstream.” But basically a lot of this not-so-subtly ladders up to the fantasy of the family wage returning that if all the women can be convinced to leave the workforce as Adam and Eve intended, you’ll be left with more money to pay the men, and bada bing, bada boom, baby, we are magically back to a situation where power and capital is even more concentrated in a few hands than it already is.

But that said, the framing in the original question, commodification, is still important to parse because I agree it should not be a commodity that is something bought, sold, traded on the market for profit. I think it’s pretty clear where I stand on this issue at this point, so I won’t belabor it. Care work is vital to the functioning of society and should be treated like infrastructure as it’s as essential to the economy as roads and clean water. It is a public good, not a commodity. And reframing the idea in this way should care work be considered and treated like a public good gets us somewhere a little bit closer to the truth.

We’ll get to that conversation with Eryn after a quick break.

Alright, bearing all that macro environment stuff in mind, I wanted to talk to Eryn about the micro, how individual families are managing these trade-offs and challenges and how they’re paying for it.

So Eryn, this conversation came about because you had reached out to me last year after we had done a Rich Girl Roundup where we basically tried to review all of the various ways that people pay for childcare and in order to do this, we were just using the national figures that are often stated in reports and in the news. And you told me that based on your experience, a lot of these figures are actually vastly understating the average costs of care. And so I was hoping that today you could shed some light on that for us. Who are you generally working with and what do they generally experience?

Eryn:

Yes, thank you so much for the opportunity to talk about this topic. I reached out as I was pregnant with my second child, so it’s something very dear to my heart, but also something that is relevant to a lot of my audience. So I am a financial educator and a certified financial planner, and I tend to work with hiring women in tech and in medicine. And so folks who are often in higher cost of living areas and also are experiencing as a result higher than average childcare costs. And a lot of the data that we have nationally on this topic comes from the women’s division and the Department of Labor. And I laugh that, I hope that doesn’t get deleted as a DEI initiative

Katie:

For sure, it will be.

Eryn:

Also, why does the women’s division have to track childcare costs? It’s not like men don’t need that too. But the median childcare prices that they have shown on average are $5,357 per year to $17,171 per year. Those are 2022 dollars, and that’s obviously a huge range. So less than $500 a month to over $1,400 per month. And so if you’re trying to fit yourself within that range, it’s really difficult, especially if you aren’t a parent yet and trying to decide, oh, where am I going to fall?

And I think a couple of things to note are that infant care is always the most expensive. So when you first start, you’re going to be hit generally with the highest cost that you’re going to pay. Homebased centers tend to be the cheapest option, but that might not be available to you or you might not know of a good one. And then I think some of the other pieces that are less controllable are where you live and how many kids you have. Good luck finding anything that’s even close to $500 to $1,400 in Boston, New York, Seattle. And I’ll say anecdotally, I work a lot with women at Mass General Hospital and the Mass General Charlestown infant room starts at close to $4,000 a month.

Katie:

Holy shit.

Eryn:

Yeah. So I think it just shows you it’s a good example where the average of the median is not going to be representative of anyone’s actual costs in a lot of cases.

Katie:

Yeah. Do you think that the better way to do that, just if you are someone that’s saying, man, these national figures A, they vary, and B, I don’t live in some fake national average version of reality. I live in Atlanta, Georgia. Do you think that there is value then in looking up specific averages and medians for your town? I know that data does exist or I’ve seen versions of that data for specific regions or specific cities, but what do you make of that? Do you find that that still tends to undershoot it?

Eryn:

That still gives you a really big range, and it’s also what kind of care is important to you? So I know I was really nervous as a mom to send my kid to have anyone else take care of them. And so I knew if they were going to go to daycare, I wanted them to go to the gold standard of accreditation, which is an N-A-E-Y-C accredited daycare. Those are going to be the higher end of a lot of those ranges.

So I would say asking people in your network if you’re comfortable, like, hey, what do you pay for childcare? If you’re not comfortable having that conversation because it can “out” you as thinking about kids—sometimes people don’t want to do that. Then I think looking at, hey, what are things in my specific zip code? Because even within a city there can be a very wide range of what people pay.

Katie:

Oh my gosh. In preparation for this conversation, I had asked you like, hey, send me some of your favorite pieces on this, your favorite research. I’m sure there’s a lot of reporting on this topic that maybe you’re aware of that we can talk about. And you were like, you know what? There’s actually not a whole lot out there.

And that surprised me, particularly you are a financial professional, you do this for a living, you are very plugged in and why isn’t there? What do you make of this? Why don’t you think that there’s much going on here?

Eryn:

Well, I think one thing that you and I have talked a little bit about, I know I think you’ve at least looked through all the CFP curriculum, is that it doesn’t really talk about childcare costs. It also doesn’t talk about fertility planning. And IVF egg freezing, [which] are also things that I talk a lot about with my clients.

But I think that a lot of it is because if you think about the traditional Certified Financial Planner or financial planner client, it’s somebody who has assets to manage and who is that? Not the person spending $40,000 a year on childcare. It’s the person in their sixties in or nearing retirement who has spent their entire career building a nest egg. And so those individuals aren’t worried about childcare costs.

And I also kind of laughed as I was going through the CFP curriculum because there’s very little on childcare, very little infertility as I said, but then there’s a whole chapter on trust and basically eight permutations of succession era planning to make sure that your second wife, who’s more than less than half of your age, how to make sure there’s an equitable distribution between them and your children from your first…

Katie:

Good. Yes, very important.

Eryn:

And while I’m poking fun at that, I think those are real planning concerns for a lot of individuals and probably more relevant to a lot of planners who are working with retirees who are in retirement thinking about legacy a gifting to the next generation.

Katie:

I hear you. I will say that it is kind of, I don’t know, funny that we do devote that level of detail and scrutiny to certain elements of planning, but then there’s this whole other thing that is going to impact pretty much every person that has children for roughly, I don’t know, five to 10 years of their accumulation period that we’re not really talking about. And so it doesn’t really surprise me that people feel totally, even people who are working with a financial professional, might feel totally ill-equipped—not just to manage those costs when they’re happening, but to plan for them to try to assess whether or not this is something that they can really feasibly afford to do in the first place.

Eryn:

Yes. I think that’s a very fair point. And there’s a lot of books that have been coming out recently about how do I decide if I want to have a kid? And I think part of the child-free movement is because childcare is just so cost-prohibitive.

And I think that there’s a recognition too that the financial planning industry is not serving a lot of people who are in their twenties to forties, the accumulators that well, because the industry has traditionally had this assets under management model, and I am an hourly fee planner, and I think it is because I want to be able to serve a different type of client who maybe is not in a position where they have tons of assets for me to manage, but they need help planning around, “Hey, I want to grow my family to a third kid. Can we make that work if we do, how much house should we afford to buy, given that, et cetera, et cetera.”

Katie:

One other kind of large myth that you pointed to in our original conversation about this was sort of a lie of omission, and it was the fact that most discussions that are happening about the costs of childcare sort of focus specifically on those early years of infant care or daycare, which implies that the burden ends when your children age out of daycare. And obviously if you have multiple children, you might have many years in a row of daycare because when one’s out the other’s in.

But you mentioned this is actually where we might really start to see that gendered care gap pick up because women are the ones that are more likely to take on the flexible jobs or split their time and focus between the paid and unpaid work to handle those odd hours after school. Your second grader gets home at 2:30, someone’s got to be taking care of that child during the day. There is that kind of a window of time after daycare, but before a kid is old enough to occupy themselves after school.

So curious what you make of that and how you think about planning around that period of time that’s not quite daycare. There might be a public school day happening, but that doesn’t match up with the workday.

Eryn:

Right. And I think that you actually pointed it out to be that Claudia Goldin, a lot of her Nobel Prize-winning research has been about if we could have the workday match the school day, that would make a lot more sense for today’s working parents.

Katie:

Yeah. She actually says that the policy that would have the single largest impact on the gender wage gap would be extending the public school day to match the workday.

Eryn:

Right? Because it’s a weird perversity of daycare that daycare will go until 5:30-6PM versus you don’t really have that as an option with public school, although there are afterschool programs which I’ll talk about.

So I think that there’s three ways that people are dealing with this, and I just want to be really cognizant of all of the working parents right now who are having to deal with return to office mandates that’s making this a lot harder. I think that this probably was a lot easier and a work from home world for a lot of people.

But one: After-care options exist. So most public schools have some kind of an extended day, and this can be anywhere from $180 a month I’ve seen to $850 a month. And it’s interesting because that $180 was actually in a high cost of living area in San Diego. So I think some of it depends on to what extent your state subsidizes these options as well. But I often have heard people paying about $400 a month.

People also use nannies for this. And what’s interesting about that is that people don’t want to work an a one-hour or two-hour shift. Generally, you’re going to have to give people at least a three-hour shift in the afternoons. And I have heard it’s hard to hire for this because a lot of nannies want a full-time role. They don’t just want to help out for three hours in the afternoon, but maybe a college student or a mother’s helper is more open to that, but that can be $1,200 to $1,500 a month just for that after school period.

And then I think that the third option is some combination of you, your partner, and maybe you have family in the area. And this is where I like to say with kids, you can either live near help or you can pay for help. And not everyone has the option of grandparents who are living, who are capable of helping, who aren’t working or who want to help. But if you can have grandma and grandpa help out two, three days a week, that really reduces the load on working parents.

Katie:

Wow, okay. So it sounds like $400 bucks a month is kind of that “middle of the road extended day” during the public school years, we’ll say, where maybe, I mean we won’t get into private school costs. I know those can be crazy. So I assume people that are paying for private school have thought this one through.

But I wanted to address that because I personally feel like we have often failed to address that elephant in the room of like, yeah, and your 6-year-old still will need somebody to take care of them when the school day ends. And if you are returning to office, who is going to do that? This is not something where you got to grin and bear it for five years with the daycare and then suddenly all of this goes away.

Eryn:

And what’s interesting is if you talk to parents, I think after school people don’t seem to sweat as much and remember that that $400 is per kid. So if you have two, [it] doubles.

Summer camp is also just exorbitantly expensive.

Katie:

I literally didn’t even think about summer. Oh god, what are people doing. What are you all doing?

Eryn:

So there’s day camps, there’s also summer camps. I think it’s really interesting too because if you have your kids in daycare, they can be set up differently. It’s pretty clear that some daycares were really originally set up as mother’s day outs. So you are a stay at home mom and you wanted to get your kids some socialization and so you’re sending them for a part day and then maybe they’ve added appendages to try to be workable for two working parents.

But so some daycares actually don’t have summer coverage and you either have to opt in for summer camp, which is separate than the regular program, or you have to find a summer camp outside of that. And so again, public school kids, that’s not baked in. So at least $200, $300 a week on the low end for a summer camp program.

Katie:

Oh my gosh. So again, we’re talking give or take $800 to $1,200 a month.

Eryn:

And again, that is not going to be all the bells and whistles sleepaway camp, but that might be like your YMCA day camp.

Katie:

Got it. Well, I’m curious then. It feels like we’ve painted a pretty complex picture. And I do have a few other questions for you about the different types of care, because child care is not a monolith. There are a lot of different options that people have.

But for the clients that you are working with and you kind of intimated, they’re typically women, they’re typically high earners or they’re typically ambitious in some capacity, how often do you see, and maybe what would be the circumstances in which you would see somebody just saying, “You know what, I got to throw in the towel. This is just too damn much. One of us is going to have to take a few years off to deal with this because it’s just too much.”

Eryn:

So interesting to frame it like that because I think the stay-at-home mom conversation is so loaded on either side and I think it depends. I think that some people proactively set up their lives to where by the time they are at an age to have kids that they can down-ramp in their careers for some period of time. And very famously, I’m a Harvard MBA, a lot has been talked about societally about Harvard MBA women dropping out of the workforce. And there were some stat—actually, the reason Sheryl Sandberg wrote Lean In was because she saw that so many of her female classmates were more likely to be stay at-home moms than they were to be in the workforce.

Katie:

And these are Harvard MBAs?

Eryn:

Yes. Society does not make it easy to have two adults working with really intense jobs. Right.

Katie:

The greedy job as Claudia Goldin calls it.

Eryn:

Yes. And if you can afford to live off of one income comfortably, then…

I’m sure you’ve seen the graphs of time spent with children. It’s short, it’s fleeting past 45, 50. It’s not that much. So if you can make that choice, it’s hard to say, oh, I, I’m going to put my career first.

Katie:

I think part of the reason this becomes tricky is because often that what you just described, “the time with the children is fleeting, it’s hard to say I’m going to put my career first,” but it feels a lot harder for one gender than the other. And I think that is why this conversation becomes loaded in a little chicken or egg. Rhetorical question, who gets to have both and who is forced to choose? I think that’s the question we should be asking as a society to get to the bottom and maybe why is this a choice that people are being forced to make?

Because this is not unique to the United States, but it sure is pretty egregious in the United States. There are many other countries that we’ve talked about on this show before where they have set up society differently and now the people that live in those places have different options. So clearly we have to operate within the world that we live in, we have to function within the society that we live in, which is your profession really is helping people do that. But I always want to hammer that home of like these are our choices because that is how this was set up. These are not immutable facts of nature.

Eryn:

Yes, a thousand percent. Although I do think getting out of the trap is hard. I think about South Korea as an example, which is a place that has really worked hard to try to boost their birth rate because it’s fallen below one at this point. I think it’s the lowest in the world. And they have paid leave as a mother, and yet still the societal expectations around work, there’s no work from home. The hours once you are back in the office are intense. And so it’s very, very difficult. There’s no half day you can’t leave at three to pick up your kid. That’s a full day out of the office is my understanding.

And so yes, I guess it’s another argument for why that environment pushes women out of the workforce or towards not having children. But I do think it’s interesting because they’ve done a lot to try to make that choice easier, and yet there’s still so many intractable pieces that push back on it.

Katie:

What I’m hearing you say is it’s not merely policy being friendly to the act of having children and what happens in the 12 to 18 months after you do, but it’s work culture too. What are the expectations at work? And I would add, and this is the part that gets a little bit tricky of is it chicken or egg, but what are the gender norms

 I remember reading Germany, which does have stricter or more rigid ideas about gender norms to a place like Denmark, which is a more egalitarian culture. They have remarkably similar paid family leave policies, but Germany’s gender wage gap is larger than Denmark’s by quite a wide margin. But that to me, and I think the argument that the researcher was making is like the attitudes culturally toward gender are just as important if not more so than the policies themselves.

And so I find that somewhat encouraging, because to me, it sort of indicates that we keep trying to chip away at the gender element of this and maybe that will lead us to a place where the policy will change as opposed to assuming if we change the policy, the culture will follow.

Eryn:

I think that’s exactly right on. And as we are in a trad wife resurgence moment in the United States, it’s interesting to think about what is that going to do for women in work and especially as the right becomes very closely aligned with this pronatalist movement, how do those things get worked out? Because childcare is so expensive that it is very difficult to not have two working parents in order to afford having children even at the public school level.

I think one of the things we’ll talk about, we talked about this idea that a nanny is an easy button, but it’s not really because you have to register as a household employer on the days that the nanny gets paid time off. What are you doing for childcare if you want socialization, which a lot of people I see, you don’t want to pull your kid out of a social daycare setting. We talked about “mother’s day outs” existed before there were two working parents because it’s important for your 2-year-old to learn how to talk to other people. And so then you’re at a point where you’re paying for a nanny and a socialization program and that’s very difficult to do without two incomes.

Katie:

Yeah. Tell me more about having a nanny, by the book, registering as a household employer. Are you telling me now that in order to employ a nanny, you almost have to create a sort of quasi-business to do this in a legitimate way?

Eryn:

Effectively, if you are paying someone more than $2,800 a year to work at your home—this could be a house cleaner in addition to a nanny. There’s lots of different ways this could look. You are expected to withhold social security and Medicare taxes for them, and that is 15.3%. So it’s not cheap. And I think that a lot of under-reporting happens here.

But there’s a lot of companies that exist out there to help you with it so you don’t have to do this on your own because I think it is a little bit intimidating for most people. So I see people use Home Pay as an example, not an endorsement. There’s lots of companies out there that do this.

But I think that yes, the “by the books” way, and this is frankly to ensure that they receive social security. Social security is a system. You get what you pay into it. So if you have no work history, A, you might not qualify for social security, but B, your payment will be much lower in the future.

Katie:

Wow.

Eryn:

It’s interesting to think about this because a lot of nannies actually don’t necessarily want to be paid on the books. So one, they receive less when you’re paying them or when you’re taking out their portion of the social security and Medicare tax. And two, I’ve also seen that having that reportable income might disqualify them from some government programs.

So often if you are paying someone “by the books”, the correct way, which is what we should be doing, there’s risk to you that they could sue you or your estate. This also happens with home health aides. So if you have a senior or someone in your life who needs someone to come into their home, you also should be paying taxes for them. And I’ve heard examples of people who the home health aide sued the estate and said, “Hey, these taxes should have been paid on my behalf.” It also can affect someone’s ability to claim unemployment benefits.

Katie:

Oh, okay. Illuminate that a little bit more for me. So you’re saying that if you are paying somebody under the table, and you’ve mentioned somebody might actually on one hand prefer that, because then they’re taking home more because there is no tax being taken out. But that it does open you as the employer up to a legal liability that they could then later on potentially sue you for paying taxes on their behalf, because this has now it sounds like inhibited their ability to get something like unemployment benefits later.

Eryn:

Yes, that is exactly right. Not a lawyer.

Katie:

But there’s this other piece that you just mentioned, which is that the other side of that, we’ll say, is that if you have a nanny who is maybe on Medicaid or is receiving WIC benefits or has some other sort of government benefit, that if their income looks higher, that might disqualify them from these benefits and therefore it ends up being a net loss for them.

Eryn:

Yes, exactly.

Katie:

I love the way our government works, don’t you? It makes so much sense. The benefits cliff is great. That’s wonderful. I love that for us.

Eryn:

It’s all very complicated and lots of different things to navigate.

I have two children in daycare.

Katie:

Okay, two children in daycare. Well, okay, let’s talk about that, because another popular myth that you pointed to is this idea that when people end up with two kids instead of one, that would be the inflection point when they would move from daycare for one child to a nanny for two.

I think in that original Rich Girl Roundup we talked about, hey, maybe it’s more cost effective once you have two kids to pay one person to come to your home than to pay the daycare rate for two. But you were like, that’s actually not really what I see. So why is that not the case? What do you see people doing instead or how would you correct for that generalization?

Eryn:

Yes, I think it’s a very common misconception, but first of all, daycare costs are still generally a lot more cost effective than having a nanny even for two kids. And so I’ll just give my own numbers as an example. We started my older son at about 15 months in a daycare program. It was about $1,650 a month, not the cheapest option, but I referenced before that having him in an NAEYC certified center was important to me.

Katie:

I get that you want to feel comfortable that your child is safe in the care that you are putting them in.

Eryn:

Exactly. And that the school has some sort of learning objectives. It’s not just daycare, it’s truly more education focused.

But if you think about the cost: Second kid, the costs bump up in daycare to something like $3,300 a month. If we were to have a nanny, and again, you have to pay the nanny generally more if they have two kids to watch instead of one. And if you’re going to pay the 15.3% household employment tax: $30 an hour, eight hours a day of care, which mind you is one hour less than what you might get in daycare five days a week, that might be $5,500 a month for the nanny.

So it’s still over $2K more a month. And the other piece of this that I think for me was really the deal breaker too is unless you’re going to pull your older child out of the childcare program, which is giving them that socialization—my brother says my son really came out of his shell once he was around other kids—in a kind of group care setting that, unless you’re going to do that, then you’re going to have nanny costs plus some kind of childcare expense for a half day program or some kind of program for the older kid. And I really felt strongly that I wasn’t going to pull my older kid out of school. He was thriving and doing so well, and at that point it’s $5,500 a month for a nanny plus whatever you’re paying for that program, which is even part-time probably at least going to be a thousand dollars a month.

Katie:

I see. So I think the thing that you had raised to me that as a child-free person I had never considered because when I’m thinking about having kids, I’m like, I would like a fleet of nannies. We always joke about this. I’m like, I want a small staff living in my home that’s helping me with this if I have kids. But it had never occurred to me like, oh, maybe just being with an adult all day is actually not what’s best for that kid’s development. There could be benefits to a daycare setting and being around other children that is actually preferable for development.

So that was definitely, I think you kind of threw my understanding of the spectrum of care of like, “Well, daycare is cheaper, but if you really want the gold standard, you go nanny, and that’s going to be more [expensive] unless you have two.” You kind of threw my entire understanding of this stuff into whack, which is why I wanted you to come and talk to me about it on air.

Eryn:

I appreciate you saying that. I will say I also had some similar misconceptions. I thought I would definitely prefer nanny. I’ll also say something that I found really uncomfortable about trying to hire and identify a good nanny is it is a little bit inherently adversarial. If they are sick or they want to take vacation, you are reliant on one person for care and that is very uncomfortable. And especially as someone who wants to try to do the right thing and be a good person, it is difficult.

Katie:

And be a good employer.

Eryn:

Yes, be a good employer. It is difficult to figure out all of those thorny situations. It is a best practice if you are going to do it to have a written contract, but it’s still uncomfortable.

Katie:

Yeah, I can see that. I think you mentioned to me that there is some good Dr. Becky content on hard conversations with nannies. Am I remembering this correctly?

Eryn:

Yes, you are remembering correctly. Yes. And again, it’s a household employee, so there might be instances where you feel like the nanny is giving you feedback as a parent or criticizing you for the way you’re handling things. And I think that that can be very challenging to navigate, especially because I think often people who have nannies, you have to be able to afford it, which means you’re a higher earner, which maybe means you have a more demanding job.

Katie:

You have established that a lot of the clients that you work with again, and I think there is even within your particular client set, I think in general there is a selection bias, if you ask any CFP, “Hey, what happens to your client’s money when they have children?” Because obviously someone who has either the wherewithal, the means, the general capacity, the assets, what have you, to be working with a financial professional with the way that the industry works now, generally you are self-selecting, or you are selecting for a subset of society already that is not reflective of the average.

But that caveat said, I’m curious, with the folks that you work with who are working parents with, give or take two kids, plus/minus one, are people’s savings just sort of disappearing during this time? Is that how people are generally making this work within financial plans? Is it kind of like a, hey, we know that we’re not going to manage to save a lot? Does it really depend?

I’m just curious because thinking about the people that I know and I’m thinking about myself and I’m like, I mean these are substantial costs even if you can afford them. I would think that it’s going to be wiping out the majority of the money that you’re able to save. Do you have any tips on that?

Eryn:

It’s a really good question. I would say most people that I work with are able to cover the cost of childcare from their income. It might be tight. And I’ll say, the people who are feeling the most comfortable are the people who were able to invest for retirement and potentially as well in a taxable brokerage account before they had kids, because it takes so much of the pressure off.

Katie:

So you’re saying they’re covering it with their income. I guess when I said draining savings, that was a bad way to phrase it, because I was less so referencing using accumulated money from the past to pay for it and more so trying to suggest if I’m normally someone that saves $2,000 a month, that’s amazing, but that $2,000 a month that I typically would be saving pre-kids might now be going to the kids for this period of time.

Eryn:

I think that that’s a very fair statement, that a lot of people do see their savings rate or their investment rate considerably decline during this period of time. What is really interesting, so again, women in tech is one of the audiences that I work with. If you have restricted stock units from your employer because you work for Google, Amazon, any of the big companies that pay restricted stock units, maybe before you had kids, you were able to save some of those dollars for the future, but now maybe that’s become some of your expected cashflow. And that can put people in a tough spot because generally when you first start an employer, you get a big grant that vests over four years, and once that big grant goes away, the additional grants aren’t as big. So people used to job-hop a lot. That is not as easy in today’s environment. So I do think that it can put people into a tough spot sometimes.

Katie:

And we’re talking about, again, selection bias, and we’re talking about people that are working for companies that historically have paid really high compensation packages. So I mean, I don’t mean to sound doomer, but it does kind of amaze me that your average person is making this work.

Eryn:

I mean, this is why all the mom magazines all have “how to make dinner for a family of five on $3 per person” because how are you making it work? You have to really be tight with all of your disposable spending. There’s not a lot of vacation and dining out or shopping that’s not, hey, I outgrew my shoes, mom. I need a new pair for second grade, in these peak childcare costs years.

Katie:

We had Farnoosh Torabi on the show a couple of years ago, and she had basically said, look, it’s a big sacrifice. It costs a lot of money. It is a huge logistical and mental bandwidth drain. It’s also wonderful in many ways. If you want it badly enough and you go into it eyes wide open about what it’s really going to take, yeah, you’re going to get through it, but it is going to take sacrifice.

And I think to your point about the interesting political climate we’re in and the pronatalism that has become so popular, I think that the pronatalism paired with the sort of pop cultural moment or version of it, which is like the trad wife thing and the kind of romanticization of parenting, it’s like, I wonder to what extent that sort of messaging might set people up to be disappointed when the reality of being a parent in the United States swiftly comes crashing down. And there is a reason why people are entering this decision so thoughtfully and really trying to think ahead about whether or not this is the right move for them because it is a huge, huge commitment. And not that it hasn’t always been a huge commitment to have children, but the money’s got to come from somewhere, right?

Eryn:

For sure. And I think being a stay at home mom, if you do not have a village around you could be so isolated. A lot of women work, I think, because it gives you outlets outside of just your children. And I love being a mom. It’s something I always knew I wanted to be. But it is interesting because I’m from Houston, Texas. My family’s been for over a hundred years or fourth generation from Houston, Galveston area, and I see because my sister and my family is also there, we’re in Austin not too far, that my great aunt, my aunt, my cousin, stop by. There’s so many people to help as part of the village that parenting in that context is not lonely, and there’s lots of support and lots of ways to do date night that don’t involve hiring a babysitter.

When you are far from your family, which is something that I think that the US economy really supported, I think baby boomers were the first generation to move away from home for jobs. Millennials certainly have done that. So now you’re living in a city maybe without family, you’re a stay-at-home mom, maybe you don’t have a ton of friends in that city as well. That’s where I think parenting in that context is very hard. It’s expensive because you’re paying for any help that you get and it’s isolating if you’re choosing to be a stay at home mom.

Katie:

Yeah, we’ve definitely enumerated the challenges, and I think you’ve done such a good job today of giving us a sense for what are the numbers and what are the tactical considerations. So I really appreciate that.

I’m curious, and I kind of feel like I know the answer based on what you just said, but to double down of the families that you have seen who are having the best or maybe comparatively the easiest times, navigating this period of life with young or youngish children, what’s their setup? Are they just near family? Is that the secret?

Eryn:

I knew you were going to say that. Interestingly, I don’t see that very often, A) probably because not that many Americans have the village anymore, but B) even if you have it, sometimes there’s pros and cons to that.

But I would say three things and family can definitely, if you have reliable, helpful family can be so huge. But I would say one is you don’t have a long commute to your care. As you know, we live in this car-centric society. If you’re driving 30 minutes to work and then 20 minutes in the other direction to childcare, that is very challenging. We have built our lives where we can walk to our children’s daycare, which is a big shout out to my husband who pushes back against all my more suburban qualities.

I would say too, the care you have, it also has to fit your job and your lifestyle. So if you work at the hospital and you’re a physician and it’s difficult to leave before 6:00 PM, daycare is probably not the right option for you. And we didn’t talk a lot about au pairs today. That can be very affordable, although you have to have a space in your home for them, which in 2025 is maybe the ultimate flex to afford an extra bedroom. But if you can’t actually pick up during daycare hours, we have very few daycares that have really good evening hours in this country, than having a partner or family who can help with pickup or nanny/au pair is going to be the right choice.

And then I think similarly picking a daycare that has availability that corresponds to what you need. There are daycares that are always open. Ours is not one of them. They have lots of time off or teacher development days. I’m my own boss so we can make that work, but I know people that are like, absolutely not. I need the daycare that’s open all the time.

And I think the third piece is picking something that you can’t afford. If it’s at the tippy top of your budget and it’s making you go into debt, then that’s not the right long-term option.

Katie:

What we had talked about a little while ago, which is that it’s not just about the childcare or the daycare itself, it’s also about the work culture. It’s about your job. And I’m frankly kind of struck by you mentioned like, well, I’m my own boss so we can make that work. How in that respect, self-employment where it makes sense, does in some ways—it’s like either being self-employed so that you are setting your own hours or having a job that has very flexible hours or allows you to work from home or allows you to take days off or just a job that pays you a lot of money so you can throw the money at the problem and pray that it makes it a little bit easier to deal with that. That is a huge piece of this. It indicates to me that the decision to have children or the decision to have more children is often not just about who is going to watch them while you are working, but how are you working and where are you working and what does that work demand of you that is going to be just as impactful in this end outcome.

Eryn:

Yes, very well said. We didn’t talk about the phenomena of the weekend nanny, but that also comes into all of this as well.

Katie:

Wait, tell me about the weekend nanny. What’s going on with the weekend nanny?

Eryn:

It’s exactly what it sounds like. Every family has different ways of working, but you both have really intense jobs and you want to be able to have some time together as a couple, which lots of research shows that’s really good for children. You want to be able to get chores done on the weekends. There are people, this is selection bias, the 1%, but have help on the weekends as well.

Katie:

It’s funny, my friend Kate Kennedy, she’s a podcaster as well, and she talks about how when she had a child, it was like her perception of the week and the weekend flipped where when she was childless, she would think about the weekend as her time off and the week is when she was working and now she’s like, no, the week is when I have childcare and I get to do my job, which is fun. And then the weekend is when I’m like, okay, got to roll up my sleeves. I got to entertain this kid for 48 hours now. And I just thought that was such an interesting way to put it. I’m probably paraphrasing incorrectly, but I mean the sentiment of just your own relationship to your free time really changes and that if you like your work that during the week the work itself can feel like a respite.

And that’s not really a part of this conversation that I think gets much airtime when we talk about the decision to work or be a stay-at-home mom is like, yeah, but if you like your job, that can feel like an escape. I think I’ve heard that sentiment more than once from women that have children and also work is like, no, I love going to my job during the day.

Eryn:

Yes, in the mom Instagram of the world, this is a very commonly talked about idea. And I mean, I thought this week—I actually really love the weekend time with my kids, but I got the flu this week. You could hear it in my voice and I was like, thank God I got the flu during the week because that would’ve been way harder on the weekend. That’s not something that I ever would’ve felt in my pre parenthood time.

Katie:

Yeah. Well, thank you for joining us. We won’t take any more of your time. I hope you feel better.

Eryn:

Thank you, Katie.

Katie:

Sorry that I put you on the mic today while you have the flu, but I really appreciate you being here and helping us make sense of what it takes to be a working parent in the United States.

Eryn:

Well, thank you Katie. It was a real honor to get to be here. Long time listener.

Katie:

That is all for this week. We will see you next week, same time, same place right here on The Money with Katie Show.

Our show is a production of Morning Brew and is produced by Henah Velez and me, Katie Gatti Tassin with our audio engineering and sound design from Nick Torres. Devin Emery is our Chief Content Officer and additional fact checking comes from Scott Wilson.