Motherhood Monthly: The Hidden Costs of Having a Child When You're Self-Employed

This past weekend, Ben and I finally pulled together all of our tax documents to send to our accountant (Tax Preparer = best investment EVER). As we were looking back at our finances for 2017--and comparing them to our 2016 and 2015 finances--I was once again reminded that having a baby has affected our finances in a BIG way.

Before you have kids, people you that "kids are expensive" and that your financial situation will change once you're parents; but just like everything else when it comes it parenting, it's really hard to truly understand what this means until you're experiencing it firsthand.

It's like the sleep deprivation that comes along with parenting: it sounds doable and exaggerated before you've ever dealt with it ("How could it possibly be that bad?") and then you realize that everyone was right and it is HELL ON EARTH AND NO HUMAN BEING SHOULD EVER HAVE TO DEAL WITH THAT KIND OF TORTURE ON A NIGHTLY BASIS.

But I digress. My point is that it doesn't seem like your finances should change that drastically when you have just one little baby (or toddler) but for us, they really have. And one of the main reasons for this is because I work for myself. 

As I've explained here many times before, when you work for yourself in the way that I do (in a primarily service-based area of business), for the most part, you only make money if you're working. Meaning, if I'm not able to sit down at my desk and "clock-in", or go into a studio and teach a yoga class or workshop, I don't get paid.

My income is variable and is mostly based on how much I can get done in a day, a week, or a month. My schedule is also variable which allows me to work when it's most convenient and scale back when needed. 

Because of this, our current financial situation is VERY different than it was at this time two years ago; we have to pay much more attention to when and how we're spending our money now, we're not putting as much away into savings each month, and things just feel much "tighter" now than they ever did before we were parents.

But this change in our finances is so much bigger than the statement "kids are expensive" would have you believe. It's not just about the child care costs or the cost of diapers and clothes--although sure, those things play into the total cost of having a child--but more about the hidden costs of having a baby and especially the hidden costs associated with being self-employed and having a flexible work schedule (blessing and a curse).  

Here's how some of these hidden costs have affected us over the past 18 months: 

When you have a child and work for yourself, you immediately experience a huge decrease in the amount of time you are able to work (even if you have child care!) and thus, your income decreases accordingly.

I know this sound obvious but here's the reason it's a "hidden" cost: I knew I wouldn't be able to work as much as I used to. I knew I would be scaling back. I planned for part-time childcare (vs. full-time) because I wanted to be home with my child some of the time, and I knew that would result in lost income.

But what I didn't understand about being self-employed? Whenever things fall through, you're the one who is "available" to pick up the slack. So when Charlie Mae is sick, I'm the one who is home with her. When day care is closed because the owner's child is sick or because her power is out (which has happened twice in the past few weeks!), I'm the one who "takes the day off" to be with Charlie Mae because I'm the one who has the flexibility to make super last-minute changes to my day. 

Similarly, in addition to these uncontrollable lost work days that all parents deal with (but that those on salary still get paid for), I didn't expect that there would also be additional "controllable" but still desired lost work time.

You all know that I love what I do and that I adore working, but I also adore spending time with my child and it's really important to me to be sure I do so every day. On some days--even if I'm slammed with work and could use every second of childcare possible--I pick her up early from daycare so that I can spend some quality time with her before I have to go teach in the evening.

And despite the fact that my business (and stress levels) could definitely benefit from adding a fourth day of daycare each week (we currently only do 3), I won't do it because I want two days at home with my child. I couldn't have anticipated how my strong desire to spend time with Charlie Mae would result in a decrease in even more lost work time.

Lastly, I've lost a lot of the time that I used to spend working in my mind, if not at my desk. For instance, I used to take Sayde on hour-long walks every day during which I would listen to podcasts and get business ideas, learn about current trends in my field, and get inspired. I also used to spend more time reading about business, doing continuing education, and taking e-courses. All of that is gone. I don't have the time to do any extras right now. When I walk Sayde, I'm also pushing a stroller and entertaining a toddler and my mind is full. This also results in lost income. 

When you don't have as much time to work, you have to start outsourcing tasks that you used to do yourself, and thus, have more business [and household] expenses. 

Although this is related to the above points, it's also slightly different. When I thought about the expenses related to having a child, I didn't think about that fact that I would have so much less time to devote to both business and household tasks and therefore, would have to pay someone to do the things that I used to do.

For instance, in the past 18 months I've had to rely much more on Sara, who works for me at Starr Struck Design Studio, than in years past. She is a Godsend and has SAVED me in so many ways since having Charlie Mae, but it's also much more expensive to pay an employee for more hours of work. 

Similarly, because my precious "free time" needs to be spent working, we've had to pay to outsource more of our household tasks: we sent Sayde away to a very expensive doggy training bootcamp because we didn't have the time to go to weekly trainings ourselves and knew we had to train her. We upped our house cleanings to 2x per month because we simply couldn't stay on top of the cleaning ourselves. We've hired someone to do a bunch of home improvement projects that we might have attempted on our own in the past but knew we would NEVER get to now. We've had to get a lot more takeout in the past 18 months because there have been many nights when neither of us were home to cook. 

As you can imagine, all of this really adds up.

The right part-time child care situation is harder to find than expected, and you can spend tons of money figuring out the best situation for your family. 

When I was pregnant, I thought I had the child care thing figured out. I had hired someone to come to our house and watch Charlie Mae at home while I worked and I knew it was going to be perfect. Spoiler alert: it was not.

As I've mentioned many times before here on the blog, I spent the first 6 months of Charlie Mae's life paying people to watch my child as I sat in my office, paralyzed, and listened to her cry. Then when working from home didn't work, I spent precious child care hours driving back and forth from the local library--working in 1 hour increments--so that I wasn't in the house and she wouldn't smell me, but so that I could still rush home and breastfeed her when needed (she would never take a bottle).

In the beginning we bled money as I paid people for hours and hours of child care during which I got little-to-no work done, hoping that one day my child would get used to that person and the lost money would be worth it. 

Eventually, we found an in-home daycare that worked much better for Charlie Mae (and got her out of the house and away from me, which is what we needed), but even that took a while to adjust to and meant many, many months of short, half-days of daycare (even though I was paying for full-days).

The hours of unused childcare that we have paid for in Charlie Mae's 18 months on this Earth is kind of horrifying. I had no idea that this could possibly happen before I was a parent. 

Sleep deprivation affects your productivity and when your productivity affects your bottom line, you feel your child's Sleep Regressions in your bank account.

While every parents' productivity is affected by sleep deprivation, this doesn't matter as much when you work for a big company with tons of employees.

When you work for yourself, if you're sleep deprived, your business becomes sleep deprived, too. You're not as motivated. You're not as inspired. You have less energy to do the things that keep you healthy and clear-headed, like working out and eating healthy.

All of this affects your ability to work efficiently with minimal errors. If you're lucky (like I am), you have an amazing employee or assistant who can ease some of this burden, pick up the slack when-needed, and catch your mistakes, but it's still a big [internal] business issue.

But wait--there's more! Here are a few of the un-hidden, out-in-the-open costs of having a child when you're self-employed that I think are worth mentioning in a brief roll-call:

You don't have paid maternity leave, you don't have personal sick days (but are sick ALL of the time now that your child is bringing home all of the germs), you don't get paid vacation days, and you don't have any of the employer perks that some parents get, like discounts on specific daycares or products or travel.

And don't forget about the cost of health insurance, which many self-employed people have to buy themselves!

While this issue didn't affect me personally because Ben works for the state, I should also mention that many self-employed parents have to buy their own health insurance. And often this health insurance isn't as good as an employer-provided policy would be or has a higher deductible, which means that in these cases medical costs (like birth, pediatrician's appointments, follow-up OB-GYN visits, etc) can be way more expensive. I know some self-employed people who had to pay upwards of 10k out of pocket for their hospital births [with insurance]. Unacceptable!

So yeah, the struggle is real.

I'd obviously do it again in a heartbeat and any financial hardship is totally worth it in my book, but as you know, I think it's important to talk about these things.

And I also think it's important to remind all of my fellow parents that there isn't an easy or right answer when it comes to working (or not working) and parenting. My flexible, work-from-home, part-time stay-at-home-parent situation might sound like the ideal, but I'm here to assure you that while I'm very grateful for this life situation, it is not without it's own set of challenges + drawbacks, and it has definitely resulted in a loss of income for our household. 

Parenting, huh? Such a wonderful challenge.