Back to work after bub: The financial challenges and 5 tips for dealing with them
Emma Walsh, founder of mums@work and parents@work, providers of return-to-work guidance for parents and businesses, looks at the money-related challenges new parents face when they return to the workforce.
The prospect of ‘returning to earning’ after an unpaid break from the workforce is often welcomed by a household, but have you ever heard a mum protest: “I can’t afford to go back to work”? The reality for parents is that there are often financial ‘penalties’ to overcome before you’ve even set foot back in the office. So what are these, and how can we lessen the burden?
Challenge #1 – Childcare costs
The biggest financial challenge you’re likely to face is the cost of childcare.
It’s quite likely you’ll be spending a fair percentage of your weekly earnings on childcare. Even if you qualify for the maximum rate of government assistance (Child Care Benefit, Child Care Rebate and Family Tax Benefit A & B), it may not sufficiently offset what you’re paying for childcare. If this is the case, consider how your current role truly benefits you and your family.
Some inner-city childcare centres around Australia charge upwards of $150 per day. Add a few waitlist fees, and for some families it becomes a question of whether someone can afford to return to full time work at all.
If you work in a family-friendly and flexible workplace, or if your employer sees you as a valuable asset to the business, then it’s easier to arrange childcare options that are more affordable and work for your specific situation. For example, you could work from home some days; go in late, finish late (while your partner or others do the opposite, so each does a pick-up or drop-off); share a nanny; or alternate drop-offs/pick-ups with another working parent.
What’s the trick to making your childcare arrangements financially viable and manageable on a day-to-day basis? Very simply, you need to find and reach out for the support necessary to make it happen.
Challenge #2 – The pay gap and discrimination issues
The other major financial challenge mothers face is finding themselves trading off senior roles or getting deliberately (or otherwise) stuck in low- to mid-level roles because of a real and/or perceived lack of support, encouragement or motivation to progress their career while managing caring responsibilities.
Women who take a break from work during a pay review cycle can find themselves worse off than their peers when they return to their roles. This has a flow-on effect of reduced superannuation, too. A recent report titled Gender Equity Insights 2016: Inside Australia’s Gender Pay Gap found there is a $100,000 gender pay gap for top-tier managers. This provides working mothers with little incentive to ‘juggle it all’.
Challenge # 3 – Paid part-time but working full-time
Be mindful of the part-time paying job that really has you working full-time. In a bid to thank employers for the flexible work conditions they offer, or simply as a way to keep up with the load, parents can end up working full-time on an agreed part-time salary.
So what’s the solution?
Here are five key tips to help you navigate the financial hurdles as you balance the books at home and at work:
- Check out what financial assistance you might be eligible for when returning to work, whether it’s government childcare or similar job assistance.
- Create a budget. How much will you need to earn to cover what it costs for you to work? If starting afresh, what’s an amount you’re comfortable earning and the minimum you’re prepared to work for? What impact will your income have on your family household in the short-term versus the next two to five years? Don’t forget to consider superannuation. It may be worth discussing your needs with a financial advisor or accountant to help you work through the after-tax benefits.
- Know your rights around flexibility, parental leave and caring responsibilities, and exercise them. Ask for flexibility if you need it. Create Plan A and Plan B for how you’ll deliver at work, how you can do it (or parts of it) flexibly, and what childcare you’ll need to have in place to achieve this. All of this will hold you in good stead for point 4.
- Ask for a pay review. If you missed a pay review cycle while you were off work, ask your employer to consider re-evaluating your role, position and experience, and apply for an increase if applicable – if you don’t ask, you don’t get.
- Ask for support when you need it, be that government fee assistance, extended family helping out with childcare arrangements (even if this is just short term until you find an affordable solution), or reaching out to your community of colleagues. Working women’s networks and career-and-parenting support advocates like mums@work are also there to help you plan your return to work.
If you action these five points you’re part way to achieving the financial security you desire in those early years of parenthood.