Taking a huge paycut to work at home and STILL having more in your pocket than your office-based counterparts.

How can a $20K/yr work at home mom have $633 per month more to spend than a $32K/yr office mom?

By Mary Ayala, Ph.D., a Mom and Professional Economist

According to the U.S. Census Bureau , the median income for a female who was employed away from her home in 2005 was $32,000 (76% of a male’s median income of $41,900). But after knocking off federal, state and local taxes, and after subtracting the withholding for social security and Medicare, the median annual ‘take-home pay’ for 50% of women who work outside of their homes drops to roughly 76%-80% of their gross salary, or no more than $24,000 per year. Then there are the expenses associated with working outside the home. If she’s the mom of young children, a competent part-time housekeeper easily costs at least $50 per week for performing light chores; and an experienced child-care provider for a pre-school child will easily cost between $50-$100 or more per week per child. Transportation costs to and from an office can also be as much as $50- $100 per week. Her total expenses can add up $10,000 to $15,600 per year or more, and that doesn’t even include parking, auto maintenance, dry cleaning expenses, outside lunches, etc.

That mom who works outside the home with salary of $32,000 actually has an after-tax income of $24,000 but, after paying work-related expenses, ends up with a actual disposable income of only $8,400 to $14,000 per year. Even less if you add up the other expenses.

Now, let’s consider the work-at-home-mom. Let’s even say that in order to work at home she took a $12,000 a year pay cut. For this example let’s say that the work at home mom earns only $20,000 a year working from home, $12,000 a year less than the office mom.

Let’s assume that the work at home mom also pays taxes at the same percentage of 20%. This leaves her with after tax income of $16,000.

But this $16,000 is also her disposable income if she performs the housekeeping, child-care services and does not have the other work-related expenses.

While the office mom has only $8400-$14,000 per year in actual disposable income, the work at home mom has more: $16,000.

Therefore, the work at home mom -- who even took a huge pay cut to be able to stay home with her kids -- is decidedly better off financially than 50% of the females who are working away from their homes and end up with only $8,400-$14,000 per year!

Basically, these facts indicate that a work-at-home mom today who is not the sole support of her family and who has about $16,000 per year in disposable income has between $2,000-$7,600 more cash available – that’s up to $633 every month -- to spend or save than 50% of the women in the workforce today!

In these examples this work at home mom is not only able to enjoy the luxury of being able to stay at home with her kids if she wants, but she can also contribute between $8,400-$14,000 extra to her family’s total financial budget every year; and save the rest for investing or for a rainy day (i.e. her family’s financial future)!

Think about that if you’re an office mom thinking you can’t afford to become a stay at home mom.

If you're interested in evaluating your own situation there is an interactive Free Tool at JobsForMoms.com that will analyze your own personal expenses, income and situation and let you print out or see exactly how much you're ACTUALLY earning per hour that you're working outside the home. Most people are shocked at the results. You can also visit Mary at her financial blog at Mary4Money.com.

Mary Ayala, Ph.D., is an Economist. Professionally, she is an economic and financial analyst for a Legislative entity and also manages a real estate investment trust and invests in stocks. Mary is a Specialist in international trade and macroeconomics. Mary has also been a very happy, but certainly not affluent, single mother who raised two wonderful boys. Today they are two extraordinary adults. You can visit Mary at her website, www.mary4money.com.