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In helping young families win at the financial game, childcare is an ever-present and often sticky issue in my mind.
Paying for childcare either costs almost as much as a mortgage payment, or it costs the equivalent of $200,000+ in lost earning potential (to say nothing of retirement savings and social security credits) over the first ten years of raising kids (see the math on that here).
Whether you’re outsourcing it to stay at work, or doing the job yourself, childcare is expensive.
I’ve been there, maybe you’ve been there; about half the parents on this email list are in this season now.
The common sentiment on paying for childcare is that it’s too expensive. But I always bristle when I hear this, because it always felt like the most important money I spent.
Plus, we can’t say that teachers are underpaid and simultaneously hold that childcare is too expensive, unless we believe somehow the early childhood education teachers caring for toddlers and preschoolers deserve less.
And I’m sure we all don’t think that!
The problem is that young parents are in the early (aka, low pay) stages of their working life, might be paying for their first mortgage or trying to save up for home ownership, and many are also paying off student loans. All at the same time they need to add another non-negotiable, high-cost bill to their list, one their career and their child both depend on.
To adjust, families must shift any and all expenses that can be trimmed to funnel towards high quality childcare. There’s usually more fluff than we realize when we make it a priority to minimize everything we can and maximize childcare spending. Ultimately salaries catch up, debts get paid off, and childcare costs abate.
The situation is temporary. Like anything worth paying for, an investment no less, you do what it takes to figure it out.
But this overarching, long-view still doesn’t change the cashflow reality for families in the trenches.
Given the unique timing of childcare costs, as compared to other family expenses (and in the spirit of coming off a presidential debate earlier this week), I wanted to share a policy proposal that I believe could help. That would temporarily eliminate one particular cost for young families with the help of modified legislation.
The federal government could add to the (short) list of qualifications for student loan deferment: paying for full time childcare.
This way, parents starting out could temporarily defer paying off their education (which was an investment in working/earning) so they can afford full-time, high-quality childcare (another investment in working/earning) and stay on track in their jobs.
This would increase families’ income to ensure student loans are ultimately paid back. And it would give financial relief exactly when families need it most. Sounds pretty bipartisan to me.
Yes? No?
Let me know what you think. I’ve never proposed a policy idea to my state representatives, but I’m planning to on this one. Reply if you want to be in the loop and do the same in your state.
Remember, there are really expensive things in life that are more than worth paying for. We just need to create solutions, whether individually or collectively, to make the puzzle pieces all fit for long-term success.
I hope you enjoyed this edition of Under 2, an email series designed to share quick bites of wisdom to empower your financial journey (while keeping it short). Be sure to sign-up below to get these messages in your inbox.
All for now,
Lindsey