Can I afford to be a stay-at-home mom?
You may dream of becoming a stay-at-home parent (SAHP), but can you afford it? This question may seem complicated, but it is simple math. Can your family survive on one income? Consider this scenario:
The Jones family currently pays $1000/month for two children to attend daycare. Mrs. Jones’ take home pay is $1800/month. If she were to quit her job and become a stay-at-home mom, the family would be short $800 month. However, she spends approximately $200/month on gas to get to and from her job, as well an estimated $200/month on work-related expenses (clothing, lunches out, etc). That brings the shortfall to $400/month. If the Jones family can find some other savings in their budget, it just might make sense for Mrs. Jones to quit her job.
Before making the decision to go from a two-income household to a one-income household, consider the following issues:
- Health insurance and other benefits: While one income may be lower, the benefits associated with it could be of significantly higher dollar value. Make sure that you will have adequate coverage before making the change.
- Job security: Living off one income is riskier than living off two, especially in times of economic uncertainty and high lay-offs. Make reasonably sure that the spouse who plans on retaining his or her job has strong job security and that the company is in good shape.
- Job Satisfaction: If you enjoy a high level of job satisfaction, you may regret quitting your job to stay at home. Being a stay-at-home parent is tremendously rewarding, but it is not for everyone. If you desire more time with your children, but are unsure of whether or not you want to be a fulltime stay-at-home parent, consider exploring part time options. This may be ideal if your children are already in school.
- Strength of Your Marriage: If your marriage is “on the rocks,” jeopardizing your future earning power by quitting your job may not be wise.
- Retirement: Consider retirement vehicles available at your spouse’s work and whether or not these are enough for comfortable retirement down the road. If not, you may consider being a stay-at-home parent in the short term, and return to work when the children are older.
- Network with other SAHP: Community and online groups for stay-at-home moms and dads are teeming with play date schedules, coupon clipping tutorials and frugal-living advice. Check out resources in your area.
- Less Money = More Time: The trade-off to reducing your household income is of course all of the priceless time you will now have to spend with your children. This is a great motivator to stay on budget and find savings wherever possible.
- Set Ground Rules with Your Spouse: Make sure your spouse understands that being a stay-at-home parent does not give them an excuse to slack off on helping out at home. Stay at home parenting is hard work too.
- Get Help from the Kids: Since the kids will be spending more time at home and less time in daycare, you can count on them to start helping you by assigning chores.
- Career Re-Entry Strategy: Unthinkable as it may be, consider mapping out a career re-entry strategy for yourself in the event that your spouse loses his or her job. This may be a long term plan that involves additional coursework or licensing but that paves the way for the kind of flexibility you may want down the road.