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What’s the Real Hourly Wage of Your Second Income Job?

/17 Comments/in , , , /by Mary Hunt

Here’s a sentence I hear all the time: “We need my paycheck just to survive.” Maybe you’ve said it yourself, usually while writing a check to daycare that feels bigger than your mortgage. But here’s a question almost nobody asks before saying it. What does that paycheck actually cost you to earn? Not the number on the pay stub. The real number. The one left over after you subtract everything that job requires you to spend, and divide what’s left by every hour it eats out of your day. That number is usually a lot smaller than you think. Sometimes it’s embarrassingly small.

real hourly wage for a second income

A reader named Bethany wrote to me about exactly this.

Dear Mary: “With two toddlers, my husband and I are paying through the roof for daycare. It feels like almost all the money I earn goes straight to childcare, so I’ve been thinking about quitting my job to stay home with the kids. I’m excited about being home with our boys, but I also want to know my family will be okay financially. Is there an easy way to make sure this decision is the right one?

โ€” Bethany

 

Dear Bethany: You’re already asking the right question, which puts you ahead of most people who make this decision on a gut feeling alone. Good news or bad news, a decision this big deserves actual math, not a hunch at 11 p.m. after a rough day.

So let’s do the math. Grab a notebook, or open a blank spreadsheet, whichever feels less intimidating. This takes about twenty minutes and it will tell you more than any pro-and-con list ever could.

Step one: find your real take-home pay

Write down your monthly net pay. Not your salary. Not the number in your offer letter from three years ago. The actual dollar figure that lands in your bank account after taxes and deductions.

That’s your starting number. It’s about to shrink.

Step two: subtract everything that job costs you

Now list every dollar you spend because you work, and take it off the top. Daycare, obviously. For a lot of families that’s the whole ballgame. But don’t stop there. Add up:

  • Commuting costs: gas, tolls, parking, transit passes, or the extra wear on your car
  • Work clothes, dry cleaning, and the “I need something for this meeting” purchases
  • Coffee, lunches out, and vending machine snacks you’d skip if you were home
  • Gifts, office pools, and the birthday cake fund that somehow always needs five dollars
  • Any professional dues, subscriptions, or continuing education you pay for out of pocket

For a lot of two-income households, this list alone chips away 15 to 25% of that paycheck before you’ve even gotten to childcare.

Step three: subtract childcare, in full

This is where it gets real. Daycare costs have climbed hard the last few years, and if it feels like you’re paying more than you used to, you’re not imagining it. Nationally, full-time infant care in a center now runs somewhere around $1,200 a month, and in plenty of states, especially on the coasts, it’s closer to double that. Costs for two kids under five can easily clear $24,000 a year in a lot of metro areas.

Put your actual number here. Both kids, full weeks, no rounding down.

Step four: divide by your real hours

Add up every hour that job takes from your life… not just the time you’re clocked in, but the commute both ways, the fifteen minutes you spend getting ready specifically for work, all of it. Multiply by the weeks you actually work in a month, minus vacation.

Now take what’s left of your paycheck after steps two and three, and divide it by that hour total.

That’s your real hourly wage. Write it down and sit with it for a second.

I’ve talked to women who thought they were earning $28 an hour and discovered, once they did this math honestly, they were closer to $4. Some land at zero. A few land in the negative, which means they were quite literally paying to go to work.

Let’s run the numbers

Numbers are always easier to trust when you can see them laid out. So let’s walk through a made-up family that probably looks a little familiar.

Say your monthly take-home pay is $3,600. Two kids in daycare runs $2,000 a month combined, which is right in line with what plenty of families are paying right now. Add another $300 for gas, tolls, and parking. Add $150 for the lunches, coffee, and “I forgot to pack anything” drive-through stops that happen on long work weeks. Throw in $75 for work clothes and the odd gift or office collection.

That’s $2,525 gone before you’ve even gotten to taxes pushing you into a higher bracket. What’s left is $1,075.

Now the hours. Say you work 40 hours a week, plus five hours a week commuting, plus another two and a half hours getting ready and packing lunches specifically because you’re headed to work. That’s 47.5 hours a week, times roughly 4.3 weeks a month, which comes out to about 204 hours.

$1,075 divided by 204 hours is $5.27 an hour.

Run your own numbers through this same exercise. I’d put money on the result surprising you, one way or the other.

But wait, there’s more

Here’s the part people forget: the hidden costs don’t stop once you’ve paid for daycare. Think about what your work schedule does to the rest of your budget.

Are you hitting the drive-through more because nobody has energy to cook after a ten-hour day? That adds up fast. A family that eats out three extra nights a week because of exhaustion can easily burn $150 to $200 a month that a slower pace at home would avoid.

Do you pay someone to mow the lawn, shovel snow, or clean the house because there’s no time left for it? Those are all real dollars that a stay-at-home season could put back in your pocket, because now you’re the one doing the yard work and the vacuuming, and that labor is worth something too.

And don’t forget what a second income does to your tax bracket. That extra paycheck might be pushing your household into a higher bracket, which means the government is taking a bigger bite of every dollar you earn on top of everything else already coming off the top.

Once you add all of that up, plenty of families discover the math tips in a direction they never expected. It’s entirely possible you’re currently paying to hold down a job.

What the math doesn’t measure

I want to be fair here, because the math isn’t the whole story, and I’d be doing you a disservice if I pretended it was.

A paycheck isn’t only about the hourly wage. It’s also retirement contributions building over decades, a foothold in your career so you’re not starting from scratch in five years, health insurance if that’s coming through your job, and for a lot of women, a sense of identity and adult conversation that matters more than the number on the check. None of that shows up in a spreadsheet, and none of it should be waived away because the hourly math looks bad.

So don’t treat this exercise as the whole decision. Treat it as the missing piece you didn’t have before. Now you can weigh the real dollars-and-cents cost against everything else that matters to you, instead of guessing at both.

Turn it into a plan, not a leap

Before you hand in any notice, write out what your household spending plan looks like on one income. Every bill, every category, written down in black and white… not estimated, not “we’ll figure it out.” If you don’t already have a system for this, start with a simple monthly plan on paper where every dollar coming in has a job to do before the month begins. It sounds old-fashioned. It works.

Build in a cushion, too. Even a modest cash reserve set aside before you make the switch gives you room to breathe if the first few months are tighter than expected, or if an unexpected expense shows up right when you’re adjusting to one income. That cushion is what turns “I hope this works” into “I know this works, even if something goes sideways.”

If the math from Bethany’s exercise says you’d only be netting a few dollars an hour after all the true costs, and your gut has been quietly begging you to be home with your kids, you may have your answer already. The spreadsheet just gave you permission to trust it.

The bottom line

You’re not choosing between “responsible” and “irresponsible” here, Bethany. You’re choosing between two different ways to be responsible, and the honest math is what tells you which one actually fits your family right now. Run the numbers, look at what’s left standing after you strip away the noise, and trust what you find.

Whatever you and your husband decide, you’re clearly the kind of parent who thinks it through instead of winging it. Your boys are lucky either way.

 

Question: So tell me… did doing this math surprise you or confirm what you already suspected? Join the conversation below.

Ever wonder what your paycheck is really costing you? I dig into questions like this one in the Everyday Cheapskate newsletter, delivered free to your inbox every day. Subscribe here and let’s make everyday life a little cheaper, easier and smarter.
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17 replies
  1. Don says:

    Goodness! I don’t mean to be unkind, but I can’t believe the comments from women who say they are destitute in retirement because they stayed home to raise their kids. Why didn’t you go back to work after the kids started school, or became old enough to stay home after school by themselves?

    And here’s another reality — men can stay home with the kids, if that works out better financially. My son is a stay-at-home dad, and his wife with the degree is the wage earner.

    Reply
  2. Pat Goff says:

    I was a single mother and I worked one full time job, one part time job and then 2-3 under the table part time jobs. Other than my full time job I always took my daughter to work with me. I wouldn’t have survived without state aid if I hadn’t worked and I wouldn’t have raised my daughter middle class like I was raised. I only work one job now and do surveys earning about $30 a month but it is a tank of gas or some money to buy food for the grandkids. LOL

    Reply
  3. Birgit M Nicolaisen says:

    I make more than my husband, so we both kept working. Our daughter was raised by some amazing caregivers. Because we are both state employees and in a union, we are able to retire in our 50s with full retirement benefits. I know that not everyone has that luxury and we are truly blessed. Also, due to our two incomes we have been able to travel with our daughter over the years and so she has seen and experienced so many different things. She is now 19 and headed to community college, which we have saved for and will be covered in full for her. I think I was a better mom because I was able to work during the day and be with my child evenings and weekends. This is what worked for us, but it’s not to solution for everyone. I think we aren’t supportive enough of each other and the choices we make.

    Reply
  4. Robin says:

    When I was working (at a job I disliked) I figured out it cost about $200 a month for me to work. So, I stayed home for a while and ran an in home day care while my children were babies. Later, after we moved and the day care was no longer fesable, I returned to school while my children attended an in home day care part time. I now have a career I love (in child development) and yet I never missed a school activity and I never felt indebted to my husband (now ex). I can collect on his Social Security if mine is too low! Child care is a fine option if that works best for you. Staying home is a fine option, if that works best for you. Doing what doesn’t work best is not a great option (although sometimes required). I am not a great stay-at-home mom but did not want to miss my kids activities so I found a balance. I do well as long as I have some income or outside interests (like school).

    Reply
  5. L. Palmer says:

    I enjoy your column and this is the first time I have felt compelled to respond to a post. I had a bachelor’s degree and a career, but chose to stay home with our five children. I hope this quick summary will encourage others to consider their options. Yes, we made tremendous sacrifices, but I used the last two decades to prepare for my future as well. During my time home with our children, I homeschooled each one, received an additional early childhood education degree, ran a home daycare, furthered my education by taking online classes, worked part-time at a post office (the required test was good for 7 years, ensuring I could work for a post office after my youngest graduated), and became an ordained minister. Our youngest graduated this year. All children have attended and paid for their own college and my husband and I are pastors. During my time home, I was blessed to care for our special needs child who passed away at the age of two. I am thankful for every moment we had with her. Every family must do what is right for them, but there are ways to stay home AND protect one’s future. As a pastor I have sat with many on their deathbeds and have yet to hear anyone say, “I wish I hadn’t spent so much time with my children.” I am thankful to live in a country where women are free to do what they feel is best for their families. If you choose to work outside the home, do it with joy. If you desire to stay home with your children, know that you have freedom to do that as well. Be blessed!

    Reply
  6. Sue Guderjohn says:

    Truer words were never spoken: “… that the days are long, but the years are short.” and both my daughters –now in their thirties– are college educated, one is a “new” mother, becoming great cooks, and integrate with their friends and communities. They learned that during a time-out I had when they were in grade school. We would go volunteer, do projects together around home, visit older neighbors, and various other activities that we would have missed had I kept working FT during those years. Yes, I did go back and forth into FT work, but we always needed me or Dad to be around during those gone-before-you-know-it times. Being a Mom is a job unto itself: One of my best “job” gigs!

    Reply
  8. Robin Wagar says:

    I believe the comment about the days are long and the years are short was right on the money. No one will love your little one as much as their Mother or Father. I made the choice to have our children and knew then that I could not work full time or part time during their little years and be able to enjoy their milestones. I volunteered at the school doing nurse type things and also was a room mother as many people have been. I am a nurse and when they were older I worked 3-11 PRN. I did a 6 week Refresher Course to go back to work and felt ready to work again. The course also met all of my CEU requirements for the next renewal. Depending on what was going on with their life, I could commit to days that did not conflict with the kids special events. I realize that it is not an option for all parents and am grateful for that time with the children. I would not give up the time I was home with out children for the biggest pension in the world.

    Reply
  9. Mrs. Potts says:

    I gave up a career to raise a family. At the time, I was grateful my husband’s income was sufficient to allow me to be home with the children. Disability happened for him. The small job that gave him supplemental income is ending. Now, at the age of 61, when I should be smiling at the future like a Proverbs 31 woman, there are no smiles. There is only regret that I didn’t look out for my own future financial security.

    Reply
  10. lisette says:

    The choice need not be between working and staying home, and really should not be. If you choose to be at home you certainly can generate income by telecommuting, running your own “mompreneur” business or freelance work in many fields. I would urge any woman never to be totally without a source of income of her own. Your own and your children’s security depends on it. Husbands can get laid off,be disabled, leave or die. Many people now make an income as freelancers.

    Reply
  11. lisette says:

    Not working at all means you have much less leverage in the marriage. Are you okay with being obedient and submissive to your husband? If you want to be treated as an equal, staying ho.e and being an “employee” of your husband may not work for you. If you get divorced or widowed you are going to be in bad shape. You cannot expect to waltz back into the workforce at the same level you left. You will be doing well to get back in at entry level. You will not have a retirement and if your husband dumps you when you are fifty or sixty you may find yourself quite impoverished. And lastly, if you took up space in a college classroom and got financial aid to get a degree, why? Someone else who was going to use those resources may not have been able to get them. And being a housewife is absolutely a good and honorable vocation but it does not require education.

    Reply
  12. Tawn B. says:

    I see three comments recommending working rather than staying home with the kids. I would like to share another opinion. My husband and I chose to have me stay home with our kids. These years were unbelievably precious! I was there to see their firsts, to influence them, to help guide them. I was able to do some things to earn money (play the organ for church, substitute teach, write, etc.), but my family always came first. With more margin in my life, I was able to save money in various ways. Our kids now? One went to four years of graduate school and is now a pastor. Another graduated debt-free from Harvard. One is studying to be an accountant and the other is choosing a college. Sure, we could have more money in savings. But we’ve had time together and healthy “margin” in our lives. If I had to do it all over again, I’d do it the same! Children are precious gifts and I consider it a blessing to have had this time with them!

    Reply
    • Jennifer Beikes says:

      Agreed. Being home with my kids had some financial drawbacks, but none come close to the unparalleled experience, for the kids and myself (and, of course, my husband). If my daughters-in-law choose to return to work when they have kids, I’ll be first in line to be the nanny ๐Ÿ™‚

      Reply
  13. Sharon Campbell says:

    You have to consider your retirement income as well. And the ability to get a high-paying (i.e., something over minimum wage) in the future. At the very least, work part-time to keep yourself in the job market.

    Reply
  14. Cindy Hurlbutt says:

    I also had the problem of staying home with children or working. We live in a small town of 1500 population. I had a good office job with good hours. As you can imagine, there are not several of these type jobs available. We made the decision for me to keep working although my income was going to child care. I was working toward the future when my income would count in our household budget. Just another point to consider.

    Reply
  15. BZ says:

    I agreed with the second-income logic when I was a young mom, and now I earnestly wish I had not. The reason? Social Security. I did work part time during those years, and until my youngest was in middle school. I am now much older, and looking at Social Security statements (with horror). I have been fortunate and not been penalized for my years of working part time. But I am past 50, and many of my peers cannot find work at all. I think what I did when younger was extremely shortsighted. If I could undo it, I absolutely would.

    Reply

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