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I'm just curious if anyone has thought of all the ways in which they are saving money being a home based daycare provider versus working out of the home? The things I'm saving money on are:
- childcare (for my own kids)
- gas
- business clothes
- lunches out
- groceries (yes, technically one buys more groceries, but my own family's grocery bill is less because I'm now buying more in bulk and am better at meal planning so there is less food going to waste).
Any others that people have noticed?
For some provinces, Childcare is more expensive actually. If I had children in my daycare, I'd have to include them in my numbers, essentially paying myself (loosing that money) and I charge more than what I'd pay, if I used a centre. Just something I've thought about in regard to having children of my own lol.
Good point. I guess I'm technically not saving money on childcare. :( That being said, it's sure nice not to have half of my paycheck go to another daycare each month! :)Quote:
Originally Posted by 5 Little Monkeys
What about all the tax write offs ...that's the biggest for me
I don't you profit from a tax write off though. I think it is similar to the 'saving childcare fees' If you can't fill a space with a paying child because your child is there you are not saving childcare fees. I would think most, if not all, tax write offs are only there on items you pay more for by working at home so saving on them is not putting you ahead. You can claim food costs...but you wouldn't be feeding those kids if you worked outside the home.Quote:
Originally Posted by Crayola kiddies
I agree. Most provinces own children count in ratios, some until long after own child is 12, so child care saving cost inaccurate since losing income for each household child = paying for childcare costs.Quote:
Originally Posted by 5 Little Monkeys
I also disagree with food saving in original post. Can buy in bulk regardless but still feeding 4-6 children and there is large cost to 2 snack and lunch each day. Food is this household biggest expense, and there only my husband and I now plus daycare children.
Also cost more in CPP and health insurance. Private health insurance for self-employed has not employer contribution or group plan perks so much dearer (although 100% tax deductible) and lower cover than many employment plans. CPP for self-employed mean paying whole contribution too vs part with employer contribution.
Real saving is hard to measure.
Yes, no business clothes to pay for but still wearing clothes. When work outside home, might need different clothes but there still cost for them, still need certain amount of clothes, still need laundering.
Tax deductible expenses like heat, maintenance, property tax, we still pay 100% of cost it just that self-employment mean they come off profit line before we pay tax so we not saving those deductible costs but just saving paying the tax on them. When consider water bill higher due to volume of toilet flushing and extra laundry from bedding, heat cost higher from being home all day, power cost higher from all day use, increased maintenance cost from higher volume of people and so more wear and tear on home, I pretty sure that the costs which do come out of pocket are dearer than the taxable part of the increased costs which we save by them coming off our top line.
When look at reality that empty spaces/spaces occupied by own minor children/extra cost for CPP or pension, or health insurance, often after expenses we making under min wage. I not believe with all these aspect really considered we saving money by running daycare at all.
When look at figures honestly, it come down to preference to work from home and contribute without having to travel to external employment, without having deal with workplace politics. But if someone looking at this industry to save money, they be sadly disappointed when they really look at "savings".
Well fortunately for me My own kids don't count in my numbers and I can write off a portion of my property taxes, mortgage interest , utilities, maintenance fees around this house , cell phone bills , and about 6k in food and I don't even have to leave my home .... I don't have to pay gas or extra wear and tear on my car , work place clothes, the odd lunch out .... Daycare fees/ camp fees for the summer/ Christmas/ March break because while my three kids don't count in my numbers they are not old enough to stay at home alone .... The list goes on .... I feel the pros of working from home far outweigh the cons plus my boss rocks!Quote:
Originally Posted by Lee-Bee
Yes but you not actually get that money you write off. You paid it out but you not getting it back. All you getting from the "write off" is the amount you would have be taxed.Quote:
Originally Posted by Crayola kiddies
i.e. Earn $10k. Property tax = $2k. Write off $500. Not get $500 back, just get $500 taken off profit and not included in personal taxes so actual write off is only the tax you would have paid on the $500 not the actual $500.
Well the way I see it is if I worked out of the home grossing what I grossed this year I wouldn't have had all the write offs and thus lowering my gross to what my net was this year and therefore paying way more taxes then I did .... And I don't have to leave my home or work for someone else
So essentially I saved money in income tax
I agree with Suzie 100%!! A tax write off does not create an equal amount of cash in my pocket. It gives me a lower tax bill but i still had to spend all of that money in the first place. If I worked outside of the home I wouldn't have spent that money. I wouldn't have spent that $8000 in groceries, the heat/power bills would have been lower etc. Although I love my job, I do it because it is comfortable and convenient for my family and I. Pretty sure most of us would agree that the pay is pretty s%&tty and a out of home job that paid the same would be very sh$t to ha ha! I am positive I would be in the same financial situation either way. I can not imagine getting up everyday for a job outside of my home that paid this low....the rewards of working at home for me are worth it for me.
I agree with Suzie too! the tax writes off nice, but its does not give me more money. My biggest reason for continuing to do daycare is for my kids. My kids are older now, but just not old enough to be on their own. Also, being my own boss, I take my days off when I need to, and I dont ask for them. I actually find that I spend more money on clothes, I wont wear nice clothes while working, so I wear casual, but they get stained and worn out rather quickly, plus I have what I will wear when Im not working. Also, home repairs and cleaning , yes I can claim some of the expenses, but I can not claim my time, and I have to spend a lot of time cleaning and fixing things around the house that I would not have to do if I diod not do day care.
Hmmm... this thread isn't turning into what I expected. I know that what I'm "saving" by working at home is just going towards something else (CPP, insurance, etc.) And I also know that what people are saving on will be dependent on what their job was or would have been if they weren't doing daycare, what type of lifestyle they led while working outside of the home, their family size and children's age.
My point of the thread what just sharing what some of have noticed that we save on by doing daycare. Again, it might go towards something else. And perhaps we (I) could have been better at saving before. But it's still interesting to see the differences.
For me personally, I used to work at a job where I had to dress up in dress pants, blouses, skirts and dresses, and fancy shoes. The cost for those items are way more than the jeans and t-shirts I'm wearing now. Yes, they go through wear tear, but that's why I don't buy/wear expensive items while working. When I had to drive to and from work each day, I was filling up the gas tank approx every 5 days. I can now go two weeks without filling it. I went out for lunch at least once a week. We bought take-out for dinner at least once a week because we didn't have time to cook before our evening activities began. Other things I noticed is that I'm no longer spending money on co-worker gifts or giving money for various fundraisers that my co-workers or their children are involved in.
I guess I'm just finding that in the grand scheme of things, even though I'm earning less than what I did working outside of the home. I'm finding that the amount of money I have left over at the end of the month ends up being about the same.
For me I just took my pay for one full-time child and threw it into my savings account. It took a little bit of getting use to but after creating a budget and just setting one childs income aside it really helped me :)
I'm only just starting out, but I'm saving money in many areas by working from home. I resigned my full time position (as a RN) because I would be spending over $2200 a month on childcare and gas/parking. It means that to break even on take home pay, I only need 2 full time DCKs. Hubby is encouraging me by pointing out the other benefits:
-I'm able to bake/cook all our food from scratch. Even with feeding 2 meals and 2 snacks for daycare, our grocery bill has been lower because nothing is processed (I'm even making my own bread) and with advance meal planning, there's no waste. Working fulltime we often grabbed take out because we both did shiftwork and usually got home after bedtime, so evenings were a mad dash.
-I'm still saving $600 in childcare per month, because the evening/weekend shifts I needed care for needed hourly babysitters, now I'm just taking up 2 M-F spots of my own (they fill 2 of my 6 spots).
-Clothing is no change, as my work uniforms were provided, and now I wear old jeans/hoodies.
-Heat is cheaper as I can keep the fire going in our wood furnace, no need to turn on the oil. We have a well, so no water charge.
I save a little bit of money by price matching and couponing.
I'm saving daycare .... My own kids don't count in my numbers but if I worked out of the home I would have to pay for daycare as only one of them is old enough to stay home alone but uncomfortable doing so ... Plus I never had a career just a job and at minimum wage I would only gross $440 and after taxes, daycare, and gas would be much less .... I gross $220/day in my daycare (full of course )
Having a huge playroom and napping rooms means I can deduct a large portion of our housing costs. I find saving money there to be the most noticeable. We've got to live somewhere and it's great to save a chunk (living in Calgary which is quite expensive if you want a large yard etc).
The biggest saving to me is being with my kids - a savings of stress and emotional energy. While running a Dayhome is not without its stressful moments, most of the stressors can be eliminated by me.
I still love shopping, so I don't save as much on clothing as I should.... ;)