The Decision to Return to the Workforce

A lot of new parents struggle with the decision to return to the workforce after having a baby. It can be an extremely emotional and difficult decision to make. Forever Freckled brings in an expert financial planner, Jamie Flesher, specializing in family budgeting, to help your family determine whether it is economically sensible to return to work and to give you tips to help you plan for the first year after having a child. While we understand that a mother’s decision whether or not to return to work is not strictly financial, Jamie’s article is an amazing and important article filled with great information and tips!

The Decision to Return to the Workforce

by Jamie Flesher

Parenthood is one of the hardest and most valued jobs in the world.  Nobody disagrees with this assessment.  Many parents, including me, have decided to put professional careers on pause to focus on the job of parenthood.  And as rewarding as the job of parent can be, there comes a day in every stay-at-home parent’s life where the mind wonders if now is the time to return to the workforce.  Even if it’s just a fleeting thought, the idea of working outside of the home is there.  The question of timing is always of utmost importance but coming in at a not too distant second would be the question of just how much this second income will improve quality of life.

We counsel families every day at Flesher Financial Services regarding this type of decision.  What potential second wage earners really need to determine is how much this new income will change a family’s financial position and how should this new income be managed once it arrives.  It’s not always straight-forward.  At Flesher Financial, we use a custom flow chart to help families work through this question with our guidance.  Below are the top 3 tips we have for families when a parent is considering returning to the professional workforce.

Tip #1 – Salary and childcare cost are not in the same currency.  We talk about and negotiate salary in pre-tax dollars but we talk about and negotiate childcare costs in after-tax dollars.  In order to make a smart financial decision, first convert the pre-tax salary into after-tax dollars.  To make a rough after-tax dollar estimate, simply reduce the salary amount by 40%.  So if the job pays a $50,000 salary, the take home amount is actually $30,000.  NOW the salary and childcare costs are in the same currency and comparable.  Making this simple conversion provides a much more accurate estimate of the amount of this new income that will be spent on the previously unneeded childcare. It’s very important to make a decision with the after-tax figure in mind.  There are of course all different types of childcare with all different costs, pros, and cons.  Flexible work schedules are also a great way to help with childcare costs.

Tip #2 – Don’t rearrange the family budget or plan for that mega vacation…yet. The idea of an additional paycheck in a single income household can be as tempting as ice cream on a hot summer day. There are probably a list of things the family can’t wait to do with that new money.  But the first year and especially those first few months back in the workforce come with a new set expenses that need to be included in the plan. Childcare is not the only expense involved when a parent rejoins the workforce.  There are new wardrobe costs, transportation costs, meal costs, dry cleaning costs, service costs for things that now need to be outsourced due to time constraints, etc. These things take time and a bit of experience to understand and estimate, but some amount of “working cost” is universal to anyone returning to the workforce.  The best practice is to sit down and figure out what these costs are going to be and what types of benefits a job might offer to reduce other costs (such as flex spending and transit assistance).  From there, a rough idea of a new family budget can be developed, and, if necessary, professional assistance can be obtained to help work through some of the questions and decisions that may arise.  Our experience is that it’s just as important to re-work the spending as it is to re-work the income.

Tip #3 – One of the most enticing reasons to return to the workforce is the potential for a 401K/retirement matching plan.  Retirement planning is a big component of all financial roadmaps and research suggests that it is a large factor in the “to work or not to work” decision making process.  If a potential new position offers a retirement savings plan of some sort, this should be factored into the overall financial plan.  Again, it’s not as easy as just checking the box that says you want to participate.  A budget and financial plan can provide a road-map to help anyone make critical investment decisions regarding necessary rainy day funds and potential tax consequences.   For example, at FFS we typically advise our clients to postpone any contributions until they have 6 to 12 month’s worth of living expenses saved up in an interest bearing account as a rainy day fund.  We then work with our clients to ensure a budgets allow for these savings.  It’s also important to consider that contributions are usually made pre-tax, offering a potential tax savings as well as the potential company matching plan.

These are just a few of the items that need to be appropriately considered in order to see the true benefit of a second income. To get started on your situation and see the complete list of tips, or to purchase the custom flow chart that includes a one hour consultation, contact Jamie Flesher at or (917) 647-8267.  Visit our under-construction web page soon at

Jamie is the principal owner of Flesher Financial Services LLC, a family budgeting and investment analytics practice.  She has over 15 years of experience helping families plan for the here and now, the future, and the next generation.  Ms. Flesher holds a BA in Economics from the University of Maryland and an MBA in Finance and Business Economics from Fordham University.  She has held positions at some of Wall Street’s top firms and was most recently serving as Senior Strategist at an independent Financial Planning practice when she left to focus on her family and the financial issues that affect young families today.  As part of her role at Flesher Financial Services, Jamie writes a monthly financial advice column on one of lower New York’s most read blogs,  It is from this blog that she has been dubbed the “Money Momma”!  


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