28-year-old mom's teacher salary largely goes toward child care—the real costs of quitting to stay home with your kids

Like many families throughout the U.S., Amanda, 28, and Carlos, 36, are wrestling with the cost of child care.

Currently, they both work full-time jobs, but Amanda would like to stop working for a few years to spend time at home raising their daughters before they go to school. Carlos is supportive, but thinks her income is imperative to their overall financial picture.

The couple lives comfortably outside the New York metropolitan area with their two daughters. Together, they earn around $180,000 a year, they told self-made millionaire and money expert Ramit Sethi on a recent episode of his "I Will Teach You to be Rich" podcast. The couple's last names were not used.

Carlos has a government job and hopes to retire relatively soon when he hits the 20-year mark and gets his pension. Amanda is a teacher who only recently went back to work after taking a break to have their daughters.

They pay $1,881 a month for day care, and Amanda earns a net income of about $44,870 a year, or about $3,739 a month, meaning over half of her take-home pay goes toward child care. The couple keeps their finances separate, with Amanda covering child care while Carlos pays for other costs, like rent.

But after crunching the numbers with Sethi on the podcast, they realized they could reasonably afford for Amanda to leave her job.

In addition to reducing their child-care costs to $0, the couple estimates they could cut out an entire car payment, along with some fuel costs, if Amanda was able to stay home. Plus, they'd save on food because she would be able to cook rather than use the meal prep service they currently pay for.

But day-to-day costs aren't the only thing to consider when weighing whether a parent should take a break from the workforce to care for their children. Here's why.

The burden often falls on women

The cost of external child care has risen by roughly 263% from 1990 to 2024, according to a KPMG analysis. With that in mind, it may seem like the logical choice to have the lower-earning parent stay home if their salary is comparable to the annual cost of child care.

But in many opposite-sex couples that parent is the mother, since men earn more than women, both historically and statistically. And for some women, it's less of a choice and more of an expectation that, when applicable, the stay-at-home parent will be the mother.

While the share of stay-at-home parents who are fathers has been on the rise over the last few decades, mothers remain the majority (82%) of stay-at-home parents, according to Pew Research.

"I have seen many women leave their jobs because their salaries don't cover the cost of childcare," Emily Green, head of wealth management for Ellevest, told CNBC Make It in an email. "In some households, that math means a career break is inescapable."

But even when a family has the option to decide between paying for child care or having one parent stay home, there are more costs to consider.

"In households where there's a little more financial wiggle room, women often don't think about what they may give up in the long term — say in 5-10 years — by leaving their jobs now," Green said.

Costs of leaving the workforce

Green shared three examples of how taking a break from the workforce can have long-term effects on an individual's — and their family's — financial future.

1. Steady salary increases

Salaried workers can generally expect to see their income rise over time, even if it's a modest 2% to 3% each year. If you stop working, no matter the reason, you miss out on those annual raises, Green says.

"If they are out of the workforce for 5 or 10 years, then return to the job market, they don't get that benefit of steady salary increases," Green said. "It is likely women will start back up from where they stopped."

While a career break can impact any worker's salary trajectory, it's especially challenging for women who see the gender pay gap widen when they become parents. Mothers earned 31% less than fathers in 2023, according to a Bankrate analysis of the Census Bureau's Current Population Survey data.

2. Resume gaps

While career breaks may be becoming more acceptable, many companies still see gaps on your resume as a red flag when looking to hire someone, Green said.

"You may be highly educated with a large amount of experience in your field before you left to take care of your kids," she wrote. "The corporate world still sees gaps on a resume as a negative thing. It may be very hard to get the job you deserve."

Unfortunately, even mothers who don't take extended leave often have trouble getting promoted after they've had children. Childless women were eight times more likely to be promoted than mothers, a disparity that doesn't occur among men, one study found.

3. Trade-offs on long-term goals 

If you have the option of paying for child care or having one parent stay home, Green says it's important to think about what sacrifices you may have to make in order to go either route.

You might be sacrificing career growth by staying home, or you may be sacrificing some of your ability to build wealth by paying for child care.

"You need to really crunch some numbers to understand what sacrifices you may need to make in the short, medium, and long-term and the feasibility of doing that," she said. "What trade-offs may you have to make and how willing are you to do so?"

The right choice for your family

Beyond the financial, there are many other factors — including emotional and medical ones — that may play a role in your child-care decision.

Plenty of parents like Amanda simply want that time with their kids to watch their development. Alternately, many people don't want to scale back their careers and instead find a balance between raising their children and continuing to grind at work.

And of course, many people don't have the luxury of choice. A 2023 survey found 66% of U.S. consumers with children under 18 in their household are living paycheck to paycheck, and 23% of those consumers struggling to keep up with their bills.

You need to do what's best for your family, "no matter how different it may be from anyone else's schedule, priorities or routines," Green says.

You can hear how Amanda and Carlos feel about their options by checking out their full podcast episode here.

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