Are You Rich?

11 comments

Everyday when I turn on my computer I’m inundated with articles related to the economy, to housing prices, to unemployment, to new investment strategies. The plethora of financial and economic information floating around the internet is exhausting. I recently came across an article focusing on how women need to fight to advance themselves in the workplace, which led me to another article about how making a $100,000 income is no longer a big deal.  I found this article very interesting. Do you know that fewer than twenty percent of American households make more than $100,000 annually? The article detailed how increasing costs, such as health insurance, inflation, housing expenses, food costs, and geography erode the value of a $100,000 income.

The $100,000 income article led me to yet another financial article that focused on the various ways to screw up your retirement plan, which finally lead me to “The Rich-O-Meter.” The Rich-O-Meter is a tool on the Wall Street Journal that includes interesting statistics on various income percentiles, as well as a calculator that tells you how rich you are, both by household income as well as by net worth. Please keep in mind that when using this tool touchy-feely goodness is not factored in, which I understand provides many people with happiness and allows them to feel “rich” in many ways.

As a working mother are you aware of your net worth or how well off your household is? Do you have a retirement or investment plan? How are you saving for your children’s college education? Do you truly have a sense of how valuable your job is to your household? If you don’t you should.

When my second daughter was born my husband asked me if I wanted to return to work. As a financial analyst I cost out the financial implications of not returning to work. The equation is much more complicated than simply taking your salary and netting out daycare expenses. When making this decision I took into consideration: future earnings, pension, health care costs, investment income, the cost of re-entering the workforce at a later date, and additional expenses that I would incur from being home all day. It’s a complicated and complex equation, and unless you have taken the time to delve into its components, you are probably not fully aware of how valuable your job is. I do understand that there are other non-financial considerations to take into account, and that there really is no dollar value you can assign to spending time with your children…or is there?

In case you haven’t noticed our country is in a major financial and economic crisis. Bankruptcy and foreclosure rates are at all time highs, unemployment is a concern for many families, and the job market is tough!

Why then, I continue to ask myself, are working mothers criticized, questioned, and judged in an accusatory manner? I’m befuddled! Don’t people get it?! My job is valuable. I don’t work because I have to, and I’m seriously offended when stay at home mothers simplify my situation as such. I don’t approach stay at home mothers and question them about lost wages, conservative investment strategies, or sacrificing financial planning, because of their choice to stay home, spend more time with their children, have a flexible schedule, and make life easier for their husband.

I work because I enjoy my career, I want my daughters to understand how a mother can play a multifaceted role in the home, and I work because I like the money that I make. By working I am able to provide my family with a lifestyle that is significantly different than staying home. I have not over simplified my decision to continue working by placing a dollar value on extra time with my children, but what I have done, from an economics perspective, is to weigh the utils (a frilly economics term used to represent preferences over some set of goods or services) assigned to my children’s experience in daycare and preschool, the utils I derive from my work experience, the utils that my family derives from my income, and offset that against the lost time that I have with my daughters. For every single member of my family, it makes sense for me to work.

Readers, I ask you, are economic and financial issues on your mind? Have you used the Rich-O-Meter? Have you delved into the difficult equation of choosing between your job and staying home with your family? How do you address rude comments made from stay at home parents?

In this tough economy I hope that all working mothers who are providing for their families realize how valuable they are, not just to their family, but to the greater economy.

 

11 comments on “Are You Rich?”

  1. Yeah, I know our net worth and I try to manage my 401(k) (my husband makes his own investment choices for his). I pay all of our bills because it works out better for us that way, but we both know the basics of where we stand at any given time.

    We fall into that top quintile for household income in the US, but sometimes it really doesn’t feel like it. My husband’s career was hit hard by the recession and he basically started over at entry level when our daughter was 6 weeks old, so I’m the bigger breadwinner and probably will be for a while. Sure, we could have made it work on his income alone – if we somehow managed to sell our house, sold our newer car, rented a 1 bedroom apartment in a bad part of town, and got food stamps. We would literally have no money at all to save for emergencies, much less our retirement and our daughter’s future. That’s not a lifestyle we want for our kids; we want them to have access to swimming at the Y, music and dance lessons, summer camp, sports teams, and help in paying for college. In order to give our child(ren) and ourselves the best future we can, we need two incomes.

    So often I see a woman saying that it didn’t make sense to work because HER take home pay would have largely been consumed by child care costs – why on earth should child care expenses be counted against only the mom’s paycheck? Barring a single parent situation, parents are in it together when it comes to supporting a family. We looked at our combined income and combined expenses as well as the very real short and long term risks that would be associated with one of us leaving our career behind to be at home with the kid(s) and the choice was that we’d both keep working. It was an easy decision to make!

    1. Katie,
      Two excellent points: (1) why is daycare only counted against a mother’s salary, this makes zero sense financially and (2) daycare is SHORT TERM! Thanks for commenting!

  2. Thanks for posting this! This is a question I dwell on a lot, but never manage to answer. I’m awful with money management and financial planning – not because I waste money, but because it scares me and I have a tendency to sick my head in the sand when it comes to personal finance. I don’t know why I have such a hard time with it. I am always reading Suze Orman and other pundits, trying to find the magic bullet, when what I really need to do is just sit down and crunch the numbers for my own household, instead of reading other people’s solutions for hypothetical situations.

  3. I am right with you on seeting an example for your girls and also doing what you love.
    I returned to work after having my daughter and didn’t think twice about it, and was lucky enough work with a group of people who understood working moms lives and many were working moms themselves. Sortly after returning to work I was let go and though, well this is my time to see what a stay at home mom is like and decided what I really want to do. Well, after a short time I knew I wanted to go back to work. Don’t get me wrong, I loved every min I got to spend with my daughter, but something was missing in my life and I knew it was the working part of me. It took me 7 months to find another full time job and am so happy for it. I love going to work every day and know when my daughter gets older she will see she can live the life she wants as well and no one can stop her.

  4. I just found this website and I’ll tell you that when I read this article I almost started to cry. I often feel guilty for having to work to help support my family and having my kids in daycare. But this really made me look at it in a different light. When you said the comment about showing your daughter that you can do both, that really hit me. I never thought of it that way. Thank you for writing this.

    1. Stefanie,
      I’m so happy that you found this website. I hope that it provides you with lots of support. Please, don’t feel guilty about working and supporting your family, it’s such an accomplishment that you are able to do both. Use all of the resources that this website has to offer, it will make you happier!
      Thank you for reaching out and commenting! 🙂

  5. I think it’s great advice…to please yourself and your family, because at the end of the day those are the most important things. However, in my experience the comments seem to be one sided, which makes it more difficult for me to ignore. Of all the working moms I know, friend, family, co-workers, I’ve never once heard of a working mom leisurely asking a stay at home mom why they don’t make any money, or contribute to family expeneses? I feel like it is socially more acceptable to judge and question women who choose to leave their children to persue a career, and that is the double standard that really gets me everytime! Thanks for your advice!

  6. I think the only worthwile response to the comments is ignoring them. They come from all sides, directed at all sides. I was a student-mommy until May, and I’m now returning to work, and I’ve heard many comments of “Well I take care of MYSELF…I don’t rely on my husband” and “Your obviously contributing less to society since you are not working” from some working mommies when I was in school (and not in the workforce), and “How could you even CONSIDER leaving your children for such selfish reasons?!” from stay at home parents. You can’t please all the people all of the time…so I’m just handling it by pleasing myself and my family 🙂

  7. You are such a great role model to those precious little girls! Another great article for ladies of all walks of life, moms or aunties alike! ……rushing over to the WSJ to check out the Rich-O-Meter right now!

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