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Learn how you can make your finances work so one of you can be a stay at home parent. Get tips on how to get rid of debt and how you can balance working from home with little ones around.
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There are several reasons why couples may want to have at least one of them stay home with the kids. In most cases, it’s a mix of the practical and the emotional.
Financial Benefits to Being a Stay at Home Parent
On the financial side, day care can be extremely pricey.
The National Association of Child Care Resource & Referral Agencies (NACCRRA) found that the average cost of daycare in the United States for an infant or toddler is about $972 a month. For an urban area like NYC and San Francisco, it can be closer to $2,000!
That’s a significant amount and if you have two kids or more kids, daycare can be as expensive as your housing.
And then there is a satisfaction from spending time with your children.
Finding that balance can be difficult and each couple has to make choices based on their circumstances.
In this episode we look at some of the numbers and scenarios you might face. We’ll go over:
- Can you arrange the money to allow at least one of you to be with the kids at home?
- Should you delay or put it off if you two are in debt?
- Is it possible to be a work from parent (without losing your mind)?
We’ll share how it worked for us and get some tips and ideas from other couples who have made the transition.
Making the Money Work to Be a Stay at Home Parent
While some consider staying at home a luxury, most parents I spoke to made sacrifices with their budget so that one of them could stay home full time.
- Make sure both parents are on board – This is most certainly a team effort and both of you need to be excited about this transition.
- Review your current financial situation – You can’t go into this with blinders on. You want this change to not be overly stressful or tense. Grab your numbers and see where you are. Two of my favorite free online tools to use are Personal Capital and Mint. If you prefer pen and paper, do that.
- Move finances so the essentials are covered under one income – You don’t have to wait for kids to do this. Actually I think all couples can do their finances a huge favor if they adopt this goal. Do a line by line check of your expenses and try to get a better deal.
- Test run your new budget ahead of time – Here’s where you two can give yourselves some peace of mind and improve your finances. As soon as you can, begin living on that one income. Pretend that the stay at home parent’s paychecks aren’t coming in. See what areas you need to improve on. With that second income you can either pay down any high interest debt you may have or you can stash it in savings to help you smooth out any rough patches when you are down to one income.
- Be willing to adjust – Being parent doesn’t change the fact that life happens, so understand that it will take adjustments to make the numbers work.
But what if you two are deeply in debt or your income drops too much to support your expenses? What do you do then?
Sticky Financial Situations for Staying at Home (and How Do Fix Them)
So are there situations where staying at home with the kids can harm your finances?
I think one situation that can be a huge obstacle is debt. Specific high amount or high interest debt.
My general advice is to be debt free is you want to stay home. That said, I don’t necessarily think it’s impossible.
If you two have debt, please double down on the steps I mentioned last segment, especially with testing out keeping expenses under one income.
Any money you’re able to use to get rid of your debt is bringing you one step closer to your goal.
Resources to Transition Your Finances
There are several episodes where we looked at paying down debt and heard from couples who became debt free from massive of amounts. Some of my favorites include:
- Paying Off Your Debt Faster as a Couple
- Stressed Over Debt? How to Get Free
- Questions Answered on Paying Your Debt Faster
- How to Stop Fighting About Money and Build Wealth Instead
- Saving Quickly & Easily for Baby
Download those and listen together.
Whether it’s using the debt snowball and attacking from smallest to largest amount or it’s using the avalanche where you pay down according to interest rate, it’s vital that you two have a plan that fits your personalities.
I completely understand having a strong desire to stay home with the kids, but you have to look at the big picture. It’s just about the numbers, it’s your marriage.
I don’t want it to be a situation where that the spouse who is working outside the home feels this added burden with being the sole income.
You may find that one way that you can stay at home with the kids and pay off debt is earning some income either as a side project or becoming a work from home parent. But that’s not always as easy as it looks.
The Realities of Working from Home
Working from home can a fantastic opportunity to earn income and be with your kids.
The internet has plenty of gurus, bloggers, and advisers flaunting how easy it is. And maybe it really is with some families, but our day to day reality is a bit more…chaotic. In a good way.
Here are a few of my tips for those looking at running a business from home with little ones.
- Create a schedule. Like I said, you don’t want to have things planned out minute by minute, but having a routine is a lifesaver for running a business. With a podcast I have to set aside time to do interviews and record shows. After testing things out, I have a fairly set schedule where I can handle these tasks while the kids are napping or my husband is at home.
- Have a plan for crunch time. Sometimes I have evening calls or assignments I have to get done that day, but because of the kids or something else, I have to wrap it up at night. My husband will step in and take the girls out while I finish. It is easy to take one another for granted, so talking about it before it happens makes it less stressful.
- Have boundaries. Many entrepreneurs who work from home say it can be hard to separate things. They’re checking email on the weekend in the middle or family. My advice is to be clear with your clients your availability. You also want to sit down with your spouse and your kids if they’re old enough and explain the situation. My oldest knows that if I’m recording it’s quiet time for her in her room until I come and get her.
- Get back up. Look there are just times when you need an extra pair of hands so you can finish up something. Don’t be afraid to get help. It could be a babysitter or you kid swap with another work from home parent.
- Be selective with your clients. I know there’s a temptation to say yes to more income, but when you work fro home, it’s especially important for you to weigh the pros and cons. How demanding is the client or the work on you? I’m grateful for the clients I have, but looking at my immediate future I’ve decided to do more projects where I have ownership and control such as this podcast. Do evaluate jobs based on your family and business and not just the money.
Thoughts on Staying at Home with the Kids
That’s what I have. If you have any other suggestions or you want to share your stories, please send them to the show notes.