The decision for one parent to stay home can cause tremendous heartburn. Many feel strongly about staying home with kids, but dont know if they can make it work financially. However, with careful planning and a keen eye on the budget, having one stay-at-home parent can work for many families.
According to Amy, a stay-at-home mom in the Midwest, the key to managing finances when one parent stays home is open communication and a solid budget. These six tips will help you shore up your budget and manage your finances when one parent stays home.
Include Activities in the Monthly Budget
When budgeting, leave wiggle room for outings and extracurricular activities. Becoming a stay-at-home parent doesnt literally mean saying at home. Account for the memberships, entrance fees and supplies youll need to create an engaging and fun schedule for your family. You dont have to break the bank. There are several free and low-cost activities you can do with your kiddos, especially in the summer months.
Create Personal Expense Budgets for Both the Working and Stay-at-Home Parent
Stay-at-home parents often feel guilty about spending money on themselves. By setting aside a portion of the budget each month for personal expenses — lunch with a friend, new clothes, a haircut — each parent can feel empowered to spend on themselves. An important part of the budgeting process is making the budgets fair and equitable to both partners, ensuring each feels they are valued for their contributions to the family.
Dont Forget to Save for Retirement
Leaving the workforce, even for a limited amount of time can have a big impact on your financial security in retirement. Experts advise families to save separately for both the working and stay-at-home spouses retirement. A financial planner can help you weigh your options and select the best plan for you.
Consider a Side Hustle to Earn Extra Income
For stay-at-home parents who want to contribute financially to the family, a side hustle can be a great way to earn extra cash. Whether its selling homemade goods on Etsy, your no-longer-used possessions on Facebook Marketplace or eBay, or your gently-used clothes through an online consignment store, there are many options to make extra money online. Or perhaps you want to keep up your professional skills while staying home. Consulting or freelancing can be a great option, helping you stay-up-to-date in your industry and maintain strong professional connections.
Find Ways to Cut Down on Expenses
The first couple years were the hardest when I stayed home, said Amy. We cut out a lot of extra stuff for awhile like eating out, activities and clothing. We did most home improvement stuff ourselves and took inexpensive driving vacations. Buying used, shopping garage sales and having at-home date nights also helped the family cut down on expenses.
Communicate, Communicate, Communicate
Keeping an open line of communication about finances is critical to any marriage, but especially to one where one partner is the primary breadwinner. Set aside time to go through the budget each month and talk regularly about how you are tracking toward short and long-term financial goals.
Deciding to have one partner stay home is rarely an easy decision. You have to weight the pros and cons, taking into account both short and long-term implications. But once youve made that decision to have one stay-at-home parent, budgeting wisely and talking frequently will help you successfully manage the family finances.