A report out this week found the short-term financial gain in returning to work after having kids can be negligible for some parents.
The latest AMP.NATSEM report, Childcare affordability in Australia, found some parents stand to lose about 60% of their gross income when returning to work full-time after having children.
That’s after factoring in the cost of child care, loss of Government benefits and increase in tax.
But the report concluded that in spite of the high costs most women (and it is women who tend to take time off work) will ultimately be financially better off in the long-term by staying in the labour market.
When you consider what time out of the workforce can do to your career, your earning-capacity over time and your superannuation, it’s not hard to understand why.
It pays to think beyond the short-term when you decide whether or not to return to work after having kids. There is no right or wrong in whatever decision is right for you and your family, but keeping up your work skills and your ability to earn money can place you in a less financially vulnerable position down the track.
If you decide you want to get back into work after having children, here are some tips on how to go about it.
Start planning
Start by finding out exactly what you’re entitled to from the Government. Consider the number of hours you want to do when you return to work, both from an emotional and financial-necessity perspective. One of the findings from the report was that some people may be financially better off working part-time – in the short-term at least. Also, consider whether you’re keen to return to the same line of work or try your hand at something new. It can be a great time to change direction, return to study, enter a new industry or start your own business.
Seek family or friend support
If you’re lucky enough to have family or friends whom you could trust with the care of your kids, there is no harm in asking if they would be prepared to pitch in and help with child care when you return to work. If you want to make it fair and can afford to do so, offer to pay them or do something for them in return. If you want to work part-time and don’t have family to ask, consider buddying up with other trustworthy mums in your neighbourhood who may also want to return to work and may also be stuck for quality child care. 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. If they can afford it, some parents opt for a nanny – or an au pair – to provide child care for their children in the comfort of home.
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 study courses now available and then when you are ready to return to work you’ll have improved your chances of being hired when and if you do return to work.
Start networking
Networking allows you to meet with people working in your field and could result in you in finding a new opening that may not have been advertised. Attending networking events that are related to your industry can also benefit you greatly and 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 and 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.
Finally, returning to work isn’t only important for your long-term financial security, it is very often equally important for emotional well-being and sense of fulfilment too. Make sure you consider the bigger picture and seek advice if you are unsure.
*Claire Esmond 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.