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Can You Afford to be a Stay at Home Parent?

can you afford to be a stay at home parent

Starting a family means making many considerations for a change in the household. Many new parents will struggle with going back to work after bringing the baby home from the hospital. Others may face the quandaries of daycare including the rising costs and availability. These situations may result in the decision to have one parent stay home on a full time basis while the other continues to earn an income.

Not all families will have the ability to keep one parent at home and live on a single income. To make that decision, you have to work through the numbers and make a contingency plan to ensure one income will go as far as it needs to in order to continue supporting the household.

Some considerations that will need to be made include:

Income Sustainability
Losing one parent’s income can quickly create a hardship if not properly considered. Parents will need to take a close look at the income and expenses to see how drastic the changes will be. Budgetary changes may be crucial to financial survival. The working parent may need to consider asking for a raise or find a new position with a higher pay scale. Be sure to compare the costs of childcare versus the loss of income that would take place. Many parents find they end up working solely to have someone watch their children while they work.

Financial Cushion
It can certainly help to prepare for the changes by starting early to save cash to be used as a cushion during the transition period. As it often happens, the minute you make a change in your financial life, something drastic happens (home repair, car expense) so make sure you are financially ready before giving up the second income.

Rationality
Not everyone is cut out to be a stay at home parent. It is important to consider the ‘whys’ of making such a change. In today’s society, there are many stay at home parent of both genders. Parents need to decipher which income is more stable and which parent is more likely to enjoy the change in lifestyle in order to tend to the children’s daily needs. It may seem like a wonderful option to quit work and be a parent but for some, the walls can close in really fast.

Other Options
For some couples, the parent quitting a job to stay home with the kids doesn’t have to mean they are out of the business game completely. With so much technology, there are many options the at-home parent can consider to continue earning a wage. Consultants, independent sales reps, and many other jobs can be done at home on a flexible schedule.

 

What works for some families might not work for others. How have you made the decision in your family to either stay at home or not?

image Danny Choo

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