Being a stay-at-home mom has intangible rewards that
defy measurement. It has some real costs, too.
Moms who choose to stay home will take a hit
for the time spent away from work. They won’t make contributions towards savings,
will miss out on career growth for time spent away and may have trouble
restarting careers. Being smart in how you approach life as a
stay-at-home parent can mitigate
some of these costs and help you avoid pitfalls.
Here's how to get started:
1. Tough Conversations
Before deciding to become a stay at home, discuss your
financial outlook with your spouse or partner. Will you be able to cover expenses
on one income? Can you eliminate or diminish some expenses? Do you have an
emergency fund? If you can build up your savings prior to leaving work, you’re
ahead of the curve. If you don’t have much in terms of savings, some of these other tips become
When you lose one income, everyone in the family will likely have to adjust their expectations. Take a look at the proportion of your combined
money that goes to food, transportation, clothes, entertainment and dining out. Then adjust for life on one income. Simple things, like meal planning and paying
in cash at the grocery store, can help save money. Stick to your budget.
Remember, money is tool;
budgets don’t have to be seen as restrictions — they are the boundaries you choose because they serve your well-being.
3. Have a Joint Bank Account
Without a joint account and no income of your own, you run
the risk of your partner exercising sole control over your family’s money, which leaves
you with nothing or an allowance. Not only can this be demoralizing for
stay-at-home moms, but it’s unwise in case something should happen to your
spouse or partner, and you’d be unable to access funds. Having a joint account
for earnings is smart. If there’s
money left over after your monthly expenses, decide on the best way to use it.
If you can’t decide, save it.
4. Keep a Separate Bank Account
This bit of wisdom comes from my own mom. Even if you have a
joint account, it can still be wise to have a separate bank account. For instance, if you
split whatever extra money you have at the end of the month, put your portion
into your own account. Not only can separate accounts endow everyone with a sense of personal
accountability, but it’s also a way to make sure you don’t accidentally
encroach on joint account funds, which
are supposed to cover your essential expenses.
5. Both Parents Need Life Insurance
A working parent is not the only person who needs life
insurance. Just because you don’t have an income doesn’t mean you wouldn’t be a major
loss to your family if something happened to you. The rule of thumb is to get a
policy for the total cost of childcare your kids would need, plus education
costs. While no one wants to imagine a worst case scenario, planning for your
family’s well-being will give
you peace of mind. Even a small policy is better than none.
6. Build a Side Income
I know plenty of stay-at-home moms who make the transition
to work-at-home mom as soon their kids are old enough. Moms start freelancing,
blogging for money, turn a hobby into a small business or make a little
extra cash through childcare — all from home.
How long do you plan to be home: one year, five years,
longer? Make the choice that’s right for you and your family. Having a big-picture plan can help you determine when to start looking for work and when to start looking for childcare. A plan will also be helpful in considering other options that open up for you
and your family.