Keeping your hand in the game after kids

Young family with toddler and baby walking on gravel path.

By Greg Major*, BA (AsSt) BE (Hons) MBA, GAICD FFIN FAIM, Director, Blueprint Wealth

A new report has found the short-term financial gain in returning to work after having kids can be negligible for some women, when factoring in the cost of child care, loss of Government benefits and potential increase in tax.

The latest AMP.NATSEM report, Childcare affordability in Australia, found a mother in a middle-income family will lose about 60 per cent of her gross income when returning to work after having children – that’s when factoring in the cost of child care, loss Government benefits and income tax.

The report finds middle-income mothers who work part-time fare a little better, losing about 45 per cent of their pay; but mums already working part-time, who decide to increase their hours to full-time, will lose a massive 75 per cent of their pay for these extra hours of work.

Mothers from low income families will lose about 69 per cent of their pay if they work part time, keeping $5.10 of their $16.37 hourly wage, and if working full-time will keep just $4.55 per hour.

But the report concluded in spite of the high costs, most women will ultimately be financially better off in the long-term by staying in the labour market.  So what can women can do to keep their hand in the game after having kids?

Start planning

Start by finding out exactly what you’re entitled to with regard to Government benefits.  Consider the number of hours you want to work, and think about whether you’re going to return to the same line of work or try your hand at something new.

Seek family support

Almost 60 per cent of children being looked after by grandparents, relatives or friends, so don’t be afraid to enlist the help of your extended family or friends and ask if they would be prepared to help with child care when you return to work.  If you want to make it fair and can afford to do so, offer to compensate them.

Consider other mums

If you want to work part-time and you don’t have family to ask, consider buddying up with friends in your neighbourhood who are also looking to return to work and may be stuck for quality child care just like you. Negotiate a share-care arrangement where you look after their kids a couple of days a week and they do the same for you on alternate days.

Research high-quality child care providers

There are many benefits to children attending child care from a socialisation perspective. Research all options in your area, then visit and observe the staff and facilities before you make a decision.

Improve your skills

If you are not ready to return to work, it pays to be actively improving your skills while you’re at home. There are lots of online courses available and by enhancing your skills while at home, you’ll improve your chances of being hired when you do decide to return to the workforce.

Start networking

Attending networking events related to your industry allows you to meet with people working in your field and could result in finding a new opening that may not have been advertised. This can help you take the first step in going back to work.

Work from home

In some professions, it’s possible to work from home.  For example, if you have skills such as graphic design or writing, you can register an ABN as a sole trader and market your services as a freelancer. Just make sure if you go down this track not to neglect your superannuation – while it’s not compulsory, it is smart financially.

Can both parents afford to work?

If the finances don’t add up in the short term, there are reasons to consider a return to work when looking long term. A financial planner can help you work through the return to work question.

At Blueprint Wealth we offer financial advice that is right for you, no matter what stage of life you’re at. Please contact us if you have any questions.

*Greg Major is an Authorised Representative of AMP Financial Planning Pty Ltd, ABN 89 051 208 327, AFS Licence No. 232706.

Any advice given is general only and has not taken into account your objectives, financial situation or needs.  Because of this, before acting on any advice, you should consult a financial planner to consider how appropriate the advice is to your objectives, financial situation and needs.