I was making $110k as a software engineer before my first child was born, and my husband's salary was about the same. I'm one of the lucky few who had a real choice -- we could live on my husband's salary and benefits alone, or we could afford high quality daycare or a nanny share if I wanted to work. If you only looked at the financial aspect we would have come out ahead by my continuing to work, even after subtracting all the expenses and taxes.
I chose to stay home for the first two years because I wanted to enjoy that time to its fullest -- no stress of having to juggle work commitments, no pain of being separated from my baby. I think kids do fine in daycare, but mom misses out on a very special time by having so much on her plate. My project was looking like it would require 45-50 hours a week, and the director of software was unwilling to allow me to work part time as a team leader. It could be done, but just seemed like it would not be a very enjoyable time.
I thoroughly enjoyed being home with my son, going to playgroups, and hiking with other moms. When my son got to be about 20 months, I started feeling a little antsy, especially in the late afternoon. I needed to take a class or find an intellectual outlet, and decided that if I were going to do that, I might as well see if I could do something that would be good for my resume at the same time. Finding part-time contracting work was easier than I expected, and I now work 20 hours a week from home. I hired a college student to feed my son lunch, play with him for an hour or so, then put him down for a nap.
We're planning to have another child, and I think I will again stop working for 1-2 years, then resume part-time work. Maybe go up to 30 hr/wk when both kids are in elementary school. This balance between doing something with my skills and also being with my kid(s) suits me.
As a side note, the other team leader at my small company became pregnant a few months after I left, and chose to continue working. She was promoted to director of software after the previous one left, so there's a reasonable chance that I could've had that job if I'd stayed. There are always tradeoffs no matter what choice you make -- something is gained (time and sanity in my case) and something is lost (money and career advancement).
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financial checklist:
[x] emergency fund fully funded [x] no cc debt [x] >10% to 401k
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