Can You Really Afford to be a Stay at Home Parent?
Bottom line: I love working. I love the social aspect of work, climbing the professional ladder, and of course making money. Being a stay at home parent never once crossed my mine. Never. Ever.
When I got pregnant with my first son, I had every intention of coming back to work full-time. That was until I gave birth and saw his face for the first time. I was a goner. I had heard from friends that I would lose my mind on maternity leave. I would sit in my pajamas all day and eat bon-bons and watch reruns of Law and Order. Nope. Not this lady. (Ok, maybe for the first 6 weeks!)
But after I got settled in I was cooking on a budget, cleaning with eco-safe cleaners and making homemade laundry detergent. 4000 loads for $20.00 sounds good to me! Why, yes of course, I can make a dinner for under $3.00 a person! As my maternity leave neared the end I started to panic. I would have actual panic attacks thinking about how my son wouldn’t even know who I was. He would love daycare more than me. I was a wreck my first week back to work. By the time 4 pm rolled around I would get in my car and drive 70 mph to get to him. I realized I couldn’t live like this. A change had to be made. So, I started to build a case to present to my husband. I did a little research and came up with the 3 most important factors.
First question (and most important)…Could we afford it and does it make sense?
If you add up every expense from childcare and healthcare to groceries and recreation, the first 18 years of a child’s life can cost a small fortune -- $190,528 to be exact. Childcare alone can cost around $4,300 a year for one child, according to Bankrate.com. Now, this isn’t an accurate picture of our expenses but it was a good solid number to start with.
It was time to make an old fashioned budget (monthly cash flow plan). I got out a piece of paper and wrote down what I make in a month. Then I started considering the costs of daycare, taxes, commuting, professional wardrobe, eating out and other work related expenses. After all was subtracted my take home pay was less than a third of my actual salary! Could I afford to give up that amount of income? Unfortunately for us, the answer was NO WAY. So, the optimist in me decided to see if I could cut back in hours. I kept working the numbers until I figured out a part time option that we could afford. Could I work 25 hours a week or maybe 30? I also realized I had to figure out ways to save money. What could I cut out? Where could I pinch a few pennies?
One other thing to think about is health insurance. Do you carry the health insurance? If you do, make sure you research options for health care. This can really add to the expense of not working.
Second question…Do we want someone else raising our child?
Now, this factor is huge for me…almost more than money (my husband would disagree here). There were times when I considered living in a cardboard box and eating Ramen if it meant I could have an extra day with my son. Just wait until you look down at your 3-month-old and go through the emotions that come with dropping him off at someone else’s house. Your situation may differ if you have a relative that can watch your child, but we did not. I would also like to add here that I am a fan of daycare. I believe daycares teach children the social aspects of life so I knew I wanted my child to attend weekly.
Third question…Will being a stay at home parent or part-time parent hurt my career…and identity?
This is a biggie. Everyone has that friend that stays home and has turned into a crazy person. They can’t have a discussion about anything besides pooping and breastfeeding. I did not want to be that woman. This is another reason why a part-time schedule was best for me. I wanted the best of both worlds. I also kept telling myself one thing. I am in my mid-twenties. If I stay home part-time for 5 years I still have 35 plus years of work. Yes, you read that right. 35 PLUS YEARS OF WORK! How is that possible? I don’t know. But I do know that I will have plenty of time!
Check out our Calculator to see if you or your spouse/partner can afford to stay home or cut back in hours. This calculator is designed to help you see the financial impact of adding or removing a spouse/partner’s income to your household.
Want a little more guidance to determine if you can be a stay at home parent or cut back on hours? Call LSS at 888.577.2227 to schedule an appointment with one of our Financial Counselors. We’re here to help you take charge of your finances, conquer your debt, and achieve your financial goals. So don’t wait – take action today!
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Author Kate Swenson is a Project Manager with LSS Financial Counseling.