The back-to-work financial dilemma for UAE mums

A mother with two young children at nursery needs to earn at least Dh122,400 a year when she returns to work if she wants to ensure the family is not left out of pocket, research for The National has revealed. According to analysis by financial advisory company Killik Offshore, women with two children in full-time […]

A mother with two young children at nursery needs to earn at least Dh122,400 a year when she returns to work if she wants to ensure the family is not left out of pocket, research for The National has revealed.

According to analysis by financial advisory company Killik Offshore, women with two children in full-time nursery care must earn at least Dh10,200 a month just to break even.

Julian Vydelingum, a senior wealth planner with Killik Offshore in Dubai, says this is the “tipping point” at which a mother’s salary would outweigh the money she must shell out to cover childcare costs, commuting and work-related expenses. The calculations do not factor in a husband’s income but illustrate the challenge women in the UAE face finding a job that makes financial sense after having children.

But even if you earn a little more than Dh10,200, it does not necessarily mean it is worthwhile, says Mr Vydelingum.

“Let’s say you are on Dh15,000 a month,” he says. “Let’s say your nursery related expenses are Dh10,000 to Dh11,000, so there is Dh4,000 disposable for you. There is that trade-off of Dh4,000 a month. Am I doing the right thing for my child? I am missing out on this period of their life. There is that as a consideration. It also plays a part.”

This was the very situation faced by Abu Dhabi resident Matilda when she returned to work after having her second child.

Ironically money was fairly low on her list of motivations for restarting her career.

It is, however, the sole reason the 33-year-old is now giving up her role.

Matilda, who is from the United Kingdom and asked for her name to be changed for the article, can no longer justify it as the childcare for her 22-month-old daughter costs Dh2,000 more a month than she earns – despite increasing her hours.

“I went back to work when she was about eight months old,” says Matilda, who was an accountant back home but decided to do something different out here, so signed up to run baby development classes.

And because she initially just worked one day a week, she hired a housemaid to look after her daughter. But when her daughter got older and needed more stimulation, she decided to send her to nursery instead. At the time there was also scope for her to increase her classes and make more money.

The problem was that the standard nursery day in the UAE runs until the early afternoon, and in her daughter’s case, until 1.30pm, and she was not able to pick her up in time. That meant she could not let the housemaid go, so she then had two costs – the housemaid’s salary and the nursery fees, which combined are around Dh2,000 more than she earns each month.

“That is having to come out of my husband’s salary,” says Matilda.

“My husband and I have been debating about [what to do about it] for a long time because I love having the ability to be around new mothers who need support. Being able to work and contribute to the house as well. And I just really thoroughly enjoy my job,” she says.

“My daughter won’t return to nursery after the summer, because that cost will 100 per cent come out of my husband’s salary,” she adds.

To arrive at the top-line figure of Dh122,400, Killik Offshore assumed weekly childcare costs of Dh2,000 for two children equivalent to Dh96,000 a year, transport at Dh175, plus lunches and work clothes costing Dh375 a week. The costs exclude rent, bills, food and casual clothing, expenses mums would otherwise have to pay.

Rasheda Kahtun Khan, a debt panellist for The National and an independent wealth and wellness planner who runs the Dubai-based company Design Your Life, says there is no set amount which says how much women need to be earning to make it worthwhile. But there is a simple calculation they should do.

“If I went for these number of hours, this is the salary I would get,” she says. “It would mean this is the help we would need which would cost us X amount and nursery or day care would be Y, coupled with the sacrifice of being with your children or not during those particular hours. So you would calculate that as a family and see whether that as a family makes financial sense.”

Killik’s Mr Vydelingum suggests professional women probably need to earn Dh15,000 or Dh20,000 plus to justify a return to the workplace. And part-time might not necessarily be the right solution either, he says.

“Working part-time can often lead to the worst of both worlds. Your costs do not reduce massively and your employer may expect you to do a full-time job in, say, four days.”

However, Ms Khatun Kahn urges her clients to forget money altogether and ask themselves what the ideal scenario is. Some women want to go back, she adds, it is not a case of them having to.

Rebecca Montagu-Williams is one of them. She returned to work when her son Henry, now two-and-a-half, was one, although she was ready sooner. And her youngest, Alice, now six months, was four months when she returned to work for a second time in mid-April.

“I could theoretically not work. It was something we discussed but for me it’s more about doing something for myself, keeping my career going. It’s predominantly personal but the financial is obviously a bonus because we have ambitions as to how much we want to save while we are here and if I am working we potentially can go home quicker,” she says.

With two children in nursery, Mrs Montagu-Williams’ associated costs are almost eye watering. She has just paid a Dh25,000 bill for the term for her two children to attend nursery and estimates that it will cost Dh100,000 for them both to attend nursery full-time year-round. Plus she also has a driver to ferry her back and forth to her job in Dubai so she can work in the car and have more time with her children, which costs her Dh4,200 a month. She also has a nanny, paid Dh2,500 every month, to look after the children on the days she finishes late at work. Despite all that, it is still financially worthwhile for her to work. Her costs are roughly less than a third of what she earns each month but she works in a professional role, running a department for a multinational company.

Women like her make up the bulk of those seeking work through Hopscotch, a recruitment company that matches professional women seeking flexible working options with companies looking for short-term hires.

“To be honest [money] hasn’t come up among the women we have placed. There hasn’t been a specific case where we have had any issues. I think because we are dealing more on the professional side of things, so it is the slightly higher paid roles that we would be working on and women with experience etc,” says Helen McGuire, from the UK, who cofounded Hopscotch.

“Also quite a lot of the women who come to us – some of them don’t have kids anyway – but the ones who do have kids, a number of them are already in school and you can’t avoid schooling costs here anyway.”

The mums who have been placed in roles by Hopscotch have been out of work for anything from months to 12 years. However, initial research revealed the majority had been stay-at-home mums for around two years.

Although money has yet to come up as an issue among the women the company places, Ms McGuire says she would never discourage a woman wanting to return to work, even if they are only hundreds as opposed to thousands of dirhams better off after covering childcare costs.

“A lot of the feedback we are getting is confidence is one of the major things, so it’s not just about money particularly for people in this region who have moved for their husband’s careers and their husband is earning a pretty decent amount. It’s more that women are sitting at home with the kids and used to have a really good career and actually I just want to be doing something. There is that balance,” adds Ms McGuire.

Flexible roles like the ones Hopscotch offers are a good option for mums who want to return to work, according to Ms Kahtun Khan.

But if after doing their sums they find flexible working is still not financially worthwhile, she encourages her clients to create their own income.

“If I ask them if you could start your own business, it became profitable and you could spend your time with your children, is that an option you would take? And often they say yes,” says Ms Kahtun Khan. “But it’s not something they often would know about and it’s not because they don’t want that. It is usually because they don’t know how.”

Erin Thomas Wong is looking to change that. She set up Making Mumpreneurs, a resource website which helps women build digital businesses, in April. Many women who have got in touch so far had professional careers before having children and like the idea of continuing that, but the cost of childcare is prohibitive.

“So that is where Making Mumpreneurs comes in because I try to give mums ideas about what they could do as a digital business and training that could help them re-skill to do that,” she says.

She says setting up an online business could be as cheap as Dh700 (without factoring in business licensing costs) if you make your own for free you only pay to host the site. Ms Thomas Wong says you could then use the site to sell other companies’ products through affiliate marketing to earn commission, or sell services you offer, such as life coaching or accountancy.

Matilda meanwhile does not know what she wants to do in the future, but she wants to return to work if she can make it financially worthwhile.

“It’s a man’s world, so when you are a woman bringing children into the world I think it’s really good for them to see that women can have children, they can work and they can make it,” she says.

pf@thenational.ae

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Source: Business

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