Life Lesson #17: Balancing economic and qualitative options (a childcare case study)
I’ve seen several articles crop up recently about the cost of having children. The recurring message: it costs on average over $250,000 to raise a child to the age of 18. As a father who is exceptionally sensitive to expenses (e.g., FlowBee), one thing that resonates from my experience is the cost of childcare.
The Story: As clueless first-time parents, my wife and I joined a local group for new parents: PEPS (Program for Early Parent Support). We were paired up with several families who were similarly ill prepared for the evolving adventure. At the beginning of every meeting, the facilitator would have each person discuss their week’s highs and lows. It was cathartic to unload the suffering that such a little person could generate through sleep deprivation, diaper blowouts, etc.
Not more than six weeks into our sessions, while recounting the week’s lows, yet another parent, let’s call her Jane, voiced her frustration with childcare. My wife and I were the only couple who chose to use a daycare provider; all the other families employed nannies.
There was a consistent theme with the nanny option: Headaches! Nannies got sick, requested vacation, quit, etc.
As Jane delved into the details of the exhausting search to find yet another new nanny for her son, Jack, she declared it was time for her to regroup. She suggested her husband take over the task of nanny screening. In return, Jane would give her husband some “Jack-free time” so he could put energy into finding a replacement.
Jackpot! The clouds parted and a once-in-a-lifetime joke-telling opportunity presented itself.
I could hardly contain myself. At just the right moment, I interjected with flawless comedic timing: “You mean, Jack-OFF time.”
The room went quiet for what felt like minutes. I glanced at my wife, whose face was buried in her hands in either embarrassment or disappointment. Had I gone too far? Did I really just say that out loud?
Suddenly the group erupted in laughter. Success!
The Breakdown: From a purely financial perspective, we found first-rate nannies charged about $15/hour in our area. While daycare was offered at a flat rate; based on our schedule needs, it averaged 40% less at $9/hour.
Richonomics, however, is more than looking at the financial components of a decision. For argument sake, let’s assume a high-quality daycare and highly-regarded nanny charge the same basic rate. In order to select the best option for your family’s childcare needs, there are a multitude of factors that need to be considered.
Continuing the childcare example, in the pro-nanny camp, there is the convenience of not having to transport your child to an off-site facility. Additionally, if your child were to fall ill, a daycare would require you to leave work early and pick up your kid. Moreover, because the child is exposed to fewer germs, he or she should get sick less often.
Many nannies prepare food and take care of light housework, which would certainly help relieve some daily stress. And there is also the intangible benefit of one-on-one attention that only a nanny can provide.
The pro-daycare camp will tout the benefits of a built-in backup system. You don’t need to worry about a single point of failure; like when a nanny falls ill, takes a vacation, or has an emergency. While your child will be exposed to more germs, this will also help build up their immune library, which optimistically means less illness in elementary school. In addition to pathogens, they are also being exposed to peers, which has a socialization benefit.
As you can see, there is no one right answer. The decisions we often need to make have many more “costs” to evaluate than just financial costs. These choices can’t always be distilled down to the decision between one of two numbers.
We are presented with competing options in all facets of our lives. Some choices will be more difficult and require more research. Other decisions will be easy, like when you see your old friend Jack at the airport – don’t yell, “Hi Jack,” across the terminal to greet him.