It’s a question that new parents often find themselves facing: “Should I be a stay-at-home parent?” Perhaps you always dreamed of spending the first few years of your children’s lives home with them. Or maybe you were career-minded for much of your life, only to find that the one thing you wanted to do after having children was stay home with them.
Deciding to be a stay-at-home mom or dad often raises a lot of questions. Will your family be able to survive on just one income? Will you be able to pick up your career after the kids go to school? Although there are plenty of people who will offer their advice to you and let you know their opinions about whether you should stay home or not, the decision is ultimately one made by just you and your spouse.
Before you make your decision, it helps to weigh the pros and cons carefully, then make a plan so that your family is financially prepared.
One of the first things to do is understand how your decision will affect your family. There are advantages and drawbacks to any choice you make. Seeing if the pros outweigh the cons or if there are more cons than pros can help you make an informed decision.
Pros of Staying Home with Your Children
While everyone’s individual situation is different, the following are some of the benefits of staying home with the kids.
- You’ll be there for the big moments. From first steps to first words, the early life of a child is full of big moments. Many parents worry about missing out on those moments because they’re at work or they fear that someone else (a babysitter, a nanny) will get to experience those moments instead. When you stay home with your kids, you’re much more likely to be there when they take their first steps or say their first words.
- You won’t have to scramble when your kids are sick. Kids get sick and need their parents to take care of them. When both parents work, it can become a contest to see who can get away from the office first to pick the kids up. Or, it can be a responsibility that always falls to one parent. But if someone stays home with the kids, there will always be someone there to care for them when the sniffles or the flu strike.
- You’ll have fewer distractions. Some working moms and dads feel guilty that they aren’t there for their kids enough, whether they’re physically away in the office or checking emails from home at night. When you stay at home, you have fewer distractions from parenting and may feel more accessible for your kids.
- It can help your family enjoy more balance. One parent often decides to stay at home so that the entire family feels less overworked and overwhelmed. When one parent takes on the role of the income earner, and the other takes on the role of caretaker, it can help bring balance to the home. Both parents don’t have to worry about rushing out the door each morning to get to work on time, and the need to bring the kids to and from daycare is eliminated.
- It gives you more freedom. While you won’t be able to drop it all and fly off on a vacation at a moment’s notice when you’re a stay-at-home parent, there is a certain amount of freedom you’ll receive. You can decide to take the kids to the park one day, visit an aquarium the next, or enjoy a day trip to a local historical site without having to request time off or schedule around work hours.
- It can help you save money. Even though one income is lost, in some ways, having one parent stay at home with the kids can save families money. Certain expenses are eliminated when one parent acts as the caretaker, such as daycare tuition, which can be very costly.
Cons of Staying Home with Your Children
Of course, being a stay-at-home mom or dad isn’t without its downsides. Here are a few of the more common drawbacks of staying home with the kids.
- You lose an entire income stream. One significant disadvantage of deciding not to work at a paid job is that your family loses that source of income. Depending on your situation, the loss could be substantial.
- You lose your health and life insurance. If you received your health and life insurance from your company, you’ll need to change to your spouse’s plan or a third-party company, which may be more expensive.
- Your world can shrink. Another drawback of staying at home is that the size of your world can shrink considerably. Instead of meeting and interacting with coworkers, you might be limited to spending much less time with other adults. All told, having limited social connections can make you feel lonely.
- It can change your marriage. Some stay-at-home parents notice a considerable shift in their marriage after they decide to stay at home. The parent who has the paid job might suddenly become the “leader” in the relationship and feel as if they get to make certain decisions because they are the one earning the money. The parent who is staying at home may feel like they have to “ask” for things they want or need, because they’re not earning the money themselves.
- You might find it boring. For some parents, the thrills of diaper duty and endless reruns of kid shows just can’t compare to the mental stimulation and excitement they get from their careers. While there are plenty of fun moments when you stay home with the kids, there is also a fair amount of tedium.
- It can derail your career. Some stay-at-home moms or dads plan to return to the workforce after a few years at home, only to find that the world has sped along without them. Some fields and employers don’t take well to an employment gap of a few years. Some fields change so fast that the technology that was current when you left your job might be several generations outdated by the time you return. Occasionally, stay-at-home parents who do go back to work find that they’re behind their peers when it comes to salary and experience level.
How to Afford to Be a Stay-at-home Parent
If the pros of staying home with the kids outweigh the cons, the next step is to take a close look at your budget and finances to find ways to make staying home affordable for your family.
Put Together a Budget
Having one spouse give up a paying job to remain home with the kids can mean a significant change in how your family spends money. The first thing to do is to figure out if your family can afford to live on one income. To do that, you’ll want to make a budget using the salary of the parent who’ll stay in the workforce.
Making a budget is often a multi-step process. To do it, you’ll need to:
- Track your spending. Make a list of every fixed expense your family has, from your mortgage to car payments and utilities to health insurance. You’ll also want to keep an eye on those flexible spending categories, such as groceries, clothing, and entertainment.
- Track the income of the parent who will stay in the workforce. If the working parent earns the same amount each pay period, tracking income is pretty simple. If income fluctuates based on the number of hours they work, you’ll want to look back over the past 12 months and use the average monthly amount as your expected income.
- Compare spending to income. Ideally, what you spend each month will be equal to or less than the amount the salary-earning spouse brings in. If it’s not, you’ll need to move on to the next step.
- Find ways to trim spending. We’ll go into more details on this below, but generally speaking, you’ll want to trim non-essentials first before finding ways to cut back on the more significant necessary expenses in your life.
Find Ways to Save Money
When it comes to saving money each month, you might have numerous options, depending on your family’s current spending and financial situation. You might also find that you need to get a bit creative when it comes to finding ways to trim expenses. Here are a few ideas.
- Cut back on cable. Although TV can feel like a blessing when the kids are cranky and you don’t know what else to do with them, it can also get pretty pricey. Take a look at what you’re spending on cable plus subscription services each month, and ask yourself where you can cut back. You might save a considerable amount if you switch from a TV and Internet plan to an Internet-only plan. Or, if you don’t use your subscription services that much but watch a fair amount of TV, cutting out your subscriptions but keeping the cable might make sense.
- Participate in clothing swaps. Kids grow pretty quickly, and it might seem as if they’re already too big for the clothes you bought them just a month ago. Save money on children’s clothing (and on your own clothes) by participating in clothing swaps. You can put together an exchange with your friends or join a local swap group. Remember, the more people who participate, the more likely everyone is to find clothes that will work for them.
- Join a “free” group. Depending on where you live, there might be a free group that’s full of members looking to give their stuff away. Free groups tend to abound on Facebook and are usually restricted to certain neighborhoods or towns, to keep the “neighbors helping neighbors” feel. If you join one that’s very active, you might find yourself cutting back significantly on purchasing new items.
- Meal plan. Putting together a meal plan on a weekly basis can help your family save money on groceries and avoid wasting food, both of which can help you save money. You can even use the sales flyers from your local supermarket to help you put together a plan.
- Take advantage of your cash rewards credit card. You have to make certain purchases anyway. You might as well earn a small amount back when you do so. Our Founder’s Card gives you either 1.5% or 2%* back with each purchase. If you shop online, you can also use sites such as Ebates, which offer cash back on orders placed at certain retailers.
- Re-think transportation. How you get around can eat into your budget. If you’re a two-car family, ask yourself if switching to one car and selling the extra vehicle would be something that could work for your family when one of you stays home. If you usually lease your vehicle, consider buying an older model and paying for it in cash.
- Consider downsizing your home. If you’ve cut costs elsewhere but will still have higher expenses than income after switching to a one-income household, it might be worth it to find a less expensive, potentially smaller place to live.
- Join a credit union. Take a look at the fees you pay to your bank each year for having a checking account with them. Then consider switching to a credit union, like PSECU. By using all of our products and services, members can keep more of their hard-earned money where it belongs – with them. We call this Money Back Banking.
Remember What You’ll Save By Staying Home
It can be easy to look at all the things you might need to cut back on to stay home with the kids and feel disheartened by the size of the sacrifice. But remember, staying home also means that you won’t have to worry about certain expenses that many working families need to consider.
- Daycare costs. Daycare costs tend to vary from state to state. Depending on how much each spouse earns, it’s not uncommon for the cost of daycare to be the equivalent of the take-home pay for one working partner. For example, the average family spends $200-$565 each week on childcare. Not having to pay that amount can often make up for the loss of a second income in certain cases.
- Commuting costs and time. Whether you drive to work or take public transportation, the cost of a commute can add up. It’s not just the financial expense that you’ll save by having one parent stay home. You’ll also get back the time spent commuting each day.
- Work wardrobe expenses. Unless you work in a very casual setting, it’s likely that you’ve spent money on clothing that you only wear on the job. Usually, work clothes are fussier to care for than casual clothes, requiring trips to the dry cleaner. When you don’t have to go into the office anymore, you won’t have to pay for a work wardrobe or the cost of maintaining that wardrobe.
- Work lunches and socializing. Even if you usually bring your lunch from home, there are likely times when it’s easier (or expected) to get lunch out somewhere. If lunch costs $10 to $15, you can save anywhere from $10 to $75 per week by staying home and preparing your own lunch. You’ll also save by not feeling obligated to go to work happy hours or other socializing events with your co-workers.
Try a Test Run Before You Commit to Staying Home
Deciding to stay at home with your kids can bring with it a lot of uncertainty. Will you enjoy being at home? Will your family be able to adjust to a smaller income? One way to find out is to give it a trial run before you make the final decision.
To do that, try living on just one income for a month or two while you’re still working. Living on one income for a short period of time has two benefits.
- First, it helps you adjust to living on a reduced income and lets you see if doing so is feasible for your family. Second, it gives you an opportunity to save money and build up an emergency fund if you don’t already have one. While your family lives on the income of the partner who will keep working, stash the income of the partner who will eventually stay at home in a savings account. If you already have a decent emergency fund, you can use that income to help cover expenses, such as hospital charges, that come with the arrival of a new baby, or
- If, during the trial run, you realize that one income isn’t enough or that your expenses are still too high, you’ll have a safety net in place. You can then tinker with the budget and find more ways to cut back or create supplemental income, such as a part-time job the stay-at-home spouse can do from the comfort of home or on the opposite schedule (such as evenings and weekends) of the parent who’s employed full time.
Tips for Stay-at-home Parents
Just like any other job, being a stay-at-home parent can be challenging. You might not know what to do with yourself or the kids at first, and there might be a few days (or weeks) of boredom and tears. But having a plan always helps. If you’re not sure what to do now that you’re home with the kids, here are some tips to help ease the transition.
Make a List of Free Activities
No matter where you live, there are likely free, daily, child-centric activities in your area. The trick is finding them. Join parent groups online or visit your local park, library, or recreation center to find out where all the other stay-at-home parents and their kids spend their days. Doing so will help your kids (and you) make friends without breaking the bank.
Put Together a Plan for Each Day
Having a plan for almost every day of the week will help you and the kids avoid boredom and will help you avoid panicking about how you’ll fill those 10 to 12 hours between wake-up time and bedtime. Your plans don’t have to be set in stone, but it can be helpful to know that you’ll go to the park in the morning, then visit the library for story time in the afternoon.
Find Time for Yourself
Although it’s easy to start to feel as if your kids’ needs are all that matter when you’re a stay-at-home parent, your needs matter, too. Even if it’s just 15 to 30 minutes, make sure to carve out some “me” time each day. You can spend that time doing yoga, going for a run, or reading a book.
Make a Plan for When the Kids are Grown
Your kids won’t stay little forever. Along with savoring the time you have with them now, it’s essential to have a plan for yourself for when your children go off to school or eventually leave home.
Do you hope to return to your career? If so, it can be helpful to keep your toes in your field somewhat. You can do that by picking up freelance work from time to time (in certain fields) or by participating in continuing education programs so that you’re up to date on the latest trends and technology. If you work in a field that requires credentialing, such as health care, keep your licenses up to date so that you’re ready and able to head back to work as soon as you’re ready.
Deciding to stay home with the kids can mean significant changes for your family’s finances. But with a credit union account that saves you money and a credit card that gives you cash back, you’ll be better prepared for saving money as a single income family.
*You can earn 1.5% Cash Rewards on purchases. With checking and a qualifying Direct Deposits, you can earn 2%. See the PSECU Visa® Founder’s Card Rewards Program Terms and Conditions for full details.