Author Topic: How to calculate Child Care expense in Savings Rate  (Read 1465 times)

Clinical

  • 5 O'Clock Shadow
  • *
  • Posts: 1
How to calculate Child Care expense in Savings Rate
« on: May 14, 2018, 08:20:18 PM »
Just a quick question, I'm trying to rap my head around this savings rate calculation.  In order for my wife to work, we need to pay for child care.  Her hourly wage, $50/hr for 8 hours a day more than covers the cost of child care ($60/day).  Child care is obviously an expense and I'm guessing it should be added as an expense when calculating savings rate, correct?  But then how should I think about it when it comes to how long it will take to retire... my point being that we won't need the expense of child care once we retire.

ixtap

  • Magnum Stache
  • ******
  • Posts: 4583
  • Age: 51
  • Location: SoCal
    • Our Sea Story
Re: How to calculate Child Care expense in Savings Rate
« Reply #1 on: May 14, 2018, 08:36:55 PM »
Your savings rate and your projected budget in retirement are two separate things.

Your savings rate is not actually very useful. Your projected budget is essential for planning.

A lot of things will change for most people in retirement. Health insurance, commuting costs, travel expenses, for many even housing will change.

MDM

  • Senior Mustachian
  • ********
  • Posts: 11493
Re: How to calculate Child Care expense in Savings Rate
« Reply #2 on: May 14, 2018, 09:15:20 PM »
Go easy on your head: ignore "savings rate".

E.g., see Calculating 25X Expenses - Bogleheads.org for related discussion.

Grogounet

  • Bristles
  • ***
  • Posts: 264
  • Location: Australia
    • http://www.quest2independence.com
Re: How to calculate Child Care expense in Savings Rate
« Reply #3 on: May 14, 2018, 11:50:21 PM »
Do you have government subsidies? If you do, you need to take them into account in your calculation.

 

Wow, a phone plan for fifteen bucks!