You are probably wondering how does one afford to be a stay at home parent? Or you’re thinking of becoming one, you’re in good company.
According to Pew Research, 1 in 5 Americans stay home with their children. This means there are about 11 million stay at home moms and dads in the United States.
Although plenty of families make stay at home parenting work for them, supporting a family on one income can be a challenge.
Here’s a comprehensive guide to making sure you can afford to stay home with your children without struggling financially or lowering your standard of living.
For the majority of families, one spouse staying home means making significant adjustments to the household budget. One way to ensure a smooth transition is to spend plenty of time preparing in advance. Here are four things to consider.
It probably goes without saying that money is the top concern when couples begin thinking about having one parent stay home with the kids. If you’ve tossed around the idea of staying home, chances are you’ve asked yourself, Can I really afford this?
This is a question you want to answer well before you quit your job or commit to staying home. To get a firm answer, you need to sit down and really crunch the numbers in your budget.
You can find many different budgeting calculators online. The stay at home financial planner at Parents.com is an excellent tool for helping you do a deep dive into your finances.
Once you know exactly how much you’re bringing in versus what you’re paying out, you can see if your current lifestyle and budget will allow you or your partner to stay home.
If both you and your spouse worked prior to your decision to stay home, you’ll need to trim your budget to account for one salary instead of two.
When you do this, make sure you calculate your new budget based on the wage-earner’s take-home pay. This means taking out things like healthcare costs, taxes, and any other deductions.
Keep in mind that some costs may shift with only one person earning a salary. For example, your taxes may decrease, but health insurance costs could go up.
How can stay at home parents budget?
There’s no getting around the fact that one partner staying home will lead to financial pinches here and there.
However, going from two incomes to one can also force you to get a firm handle on your finances.
As a two-income household, you might have spent money and paid bills without any real plan in place. When you’re supporting a family on one income, however, you can’t afford any amount of frivolous spending.
As you make the transition to the stay-at-home lifestyle, here are five budgeting tips to help you save money and maintain the same standard of living you enjoyed as a two-income family.
It sounds obvious, but having a budget is the best way to ensure you control your finances — not the other way around.
Many people are intimidated by budgeting, but it’s actually quite straightforward. Furthermore, seeing exactly what you have coming in versus what you pay out can be empowering.
To make a budget, start by writing down all your monthly expenses. You’ll need to account for everything, including small purchases like your daily cup of coffee or a fast food run. Then, make a list of all your bills for the month.
If writing everything out seems tedious or too time-consuming, you can find dozens of free budgeting apps for your smartphone.
You can also find websites with budgeting tools, templates, and calculators that make it easy (and fun) to keep track of your finances.
On average, Americans spend more in restaurants ($54 billion) than they do on groceries ($52 billion). With drinks, food and tips the money quickly adds up when you eat out many times a month.
Invest in an Instant Pot, it will save you a lot of time and money. Write down a weekly menu every Sunday evening. Include the children in menu planning. Incorporate theme nights like soup nights and left-over food days.
Warm all the left-over food from the previous days, let everyone eat what they want that selection.
You’ll save your budget and your waistline by buying healthy groceries and preparing the majority of your meals at home.
Do you really save money by cord cutting?
For many families, cable television is a big monthly expense. If you can save a couple hundred dollars a month, consider eliminating cable. In fact, cutting the cable cord is a growing trend.
Pew Research reports that a whopping 61 percent of Americans between the ages of 18 and 29 have already ditched cable in favor of streaming services.
Streaming services offer a wide range of programming, and you can usually sign up for around $15 a month. Even better, apps like PBS Kids let you watch children’s programming for free.
The good news is that staying home will most likely help you save in certain areas. For many stay at home parents, eliminating the costs associated with commuting can be a big money-saver.
Factor in the cost of gas, parking, and even vehicle maintenance — then adjust your income and budget accordingly.
You might also be able to save on things like work clothing and lunches — and your child care savings might even make it more affordable to stay home rather than work outside the home.
Before you transition to a stay at home parent lifestyle, make sure you and your partner have a thorough and detailed discussion about expectations around the house.
Just because one parent stays home doesn’t mean they should get stuck with the lion’s share of home maintenance.
The key is to plan everything in advance, including things like who empties the dishwasher and which spouse is responsible for cooking dinner. That way, you reduce the risk of misunderstandings and hurt feelings.
The gig economy isn’t limited to Uber and Lyft. As of 2018, there were 56.7 million freelance workers in the United States.
Advances in technology mean employees and freelancers can work from home just as easily as the office.
In addition to the obvious benefit of spending more time with your children, staying at home can also benefit your bank account.
While many people assume that leaving the workforce means sacrificing income, statistics reveal this may not actually be the case.
For example, childcare costs have risen exponentially in recent years. According to a U.S. News report, the cost of daycare has jumped 70 percent since 1985, rising from $84 to $143 a week.
For some families, it makes better sense financially for one parent to stay home. Rather than shelling out thousands each year on daycare, work clothes, commuting, and daily lunches, stay at home parents pocket these costs.
In other words, there’s never been a better time to balance a career with spending time with your children. Here are four jobs to consider if you’re looking for ways to earn extra income while caring for your family.
If you left the teaching profession to raise a family, you might be surprised to learn you can still spend time interacting with students without setting foot in a classroom. Online public schools like K12 hire experienced teachers to work with students from home.
Even if you don’t have certified teaching credentials in your state, you may be able to qualify as a tutor or English as a Second Language (ESL) teacher, as long as you have a bachelor’s degree.
Have you created websites for friends or as a hobby? Do you have experience with Adobe, Photoshop or Lightroom software. Why not put your design skills to work and earn money?
If you enjoy writing, or you’re particularly skilled at turning a phrase, a freelance writing career could be a perfect way to earn extra cash for your family.
You can find a list of digital content writing jobs on the ProBlogger job board, which is updated with new jobs daily.
Don’t be afraid to shop thrift stores, garage sales, and discount retail stores for everything from clothes and toys to household items.
Buying clothes at the thrift store is a great way to get brand clothes at a bargain.
Depending on where you live, some thrift stores have brand new brand name unworn clothes that do not make the cut in large clothing stores due to small probably unnoticeable faults.
Beware though, some worn clothes from thrift stores can contain nasty stains and probably germs.
If you’ve spent time in the workplace, you probably have some sort of retirement plan through your employer. When you decide to stay home, your employer will most likely stop contributing to your retirement account.
Fortunately, stay at home parents have options when it comes to saving for retirement. One of the most common options for retirement saving for stay at home moms is the spousal IRA.
Federal law requires an individual to be employed to contribute to an IRA. However, stay at home parents are permitted to contribute to a “spousal IRA” as long as they have a spouse in the workforce.
There are specific contribution requirements and rules for spousal IRAs, so it’s important to check with your accountant or financial advisor before you open one or roll your 401(k) into an IRA.
What options do stay at home parents have for disability and social security?
While many stay at home parents assume they’re automatically disqualified from receiving Social Security or disability benefits, this isn’t necessarily the case.
Social Security Benefits for Stay at Home Parents – If you’re married and stay home, you’re typically allowed a “spousal Social Security benefit” that is equal to half your working spouse’s benefit.
Social Security Disability Insurance (SSDI) for Stay at Home Parents – There are several ways stay at home parents might qualify for SSDI benefits, even if they have little or no work history.
Widowed, disabled spouses can receive benefits if their disability occurred between the ages of 50 and 60.
A stay at home parent who has a deceased or disabled spouse, and who also cares for a disabled child or a child under age 16, may also qualify for SSDI benefits.
Staying home with your family is a big decision that requires careful planning and financial adjustments. If you’re committed to making it work, however, you can reap the rewards of watching your children grow while keeping your family financially stable.