[quote=bearishgurl][quote=CA renter]BG, I’m putting this quote here (obtained from the “Are Men Success Objects” thread), because this is the thread where we were discussing the cost/benefit analysis of having a SAHP. We’ve all kind of wandered back and forth on these two threads. 🙂
Did you have a chance to run the numbers, yet?[/quote]CAR, I’ve been swamped but I haven’t forgotten about Joe and Jane Sixpack who have 3 kids under the age of 6 years old. I’ve wanted to run Turbo Tax on their “theoretical situation” to demonstrate the value of the “secondary wage-earner’s” take-home pay (after expenses). I’ll get to this task hopefully tomorrow.[/quote]
Sorry for the delay, CAR. I’ve been really busy and only got as far as inputting a theoretical mom and dad (living in SD County) with three kids into Turbo Tax with gross take-home pays of $45K and $80K respectively.
Before completing form 2441, however, I wanted to double check into the current DASH and 6-6 program costs for this family (even though all the kids are currently under the age of 6), for projection purposes. This is because the secondary wage-earner … in this case, we’ll say “mom,” is likely going to get raises every year (however small but let’s say 1-3%) while the family’s child care costs go down exponentially year by year.
I do plan on using the Y’s costs for local home daycare but this sample family will NOT be living in a “higher-cost” area of the county (for daycare exp) as shown on their report.
Not that it doesn’t all come out in the wash, but I’m also going to assume the dad is claiming M-4 on his W-4 form and mom is claiming M-1 on her W-4 at work (for a total of five dependents). In my mind, this practice would help a little with take home pay for both.
Also, you had posted earlier (on this thread, I think) that our sample family shouldn’t have been trying to borrow for a home priced out of their league. I wholeheartedly agree but in the case of Joe and Jane Sixpack and their 3 young kids (our sample here), they wouldn’t be able to buy a SFR at all in San Diego County without Jane’s pay being factored in their mortgage ratios and also a portion of Jane’s pay being saved over the years to help with a downpayment. I wanted to use a mortgage amount of ~$300K +/- with a purchase price of $350-360K for this family. If our sample family was unable to purchase a home in the past few years, they would have been surely locked out of SD County (SFR’s) and forced to pay $1600 – $2400 mo rent for a similarly-situated home in a much lesser (rental) condition.
IMHO, that would have been a both a huge trap and a travesty for our (locally-employed) sample family.
I wanted to run the front/back end RE borrowing ratios for our sample family to illustrate this point and also that a moderate/middle income family with kids will never be able to get ahead in a region such as SD County, CA without both spouses working (preferably both FT). Through their progressive tax codes over the past 25 years, Congress has supported working families in that they have made it entirely worthwhile to both joint filers and heads of households to work FT.
So, there is a bit more work to this than I originally envisioned. I really hope to have it all done by the TK holiday and at the very least a thread started with our sample family’s tax return figures for 2013 for the Piggs to munch on.
