4 Financial Steps Every Stay-At-Home Parent Should Take
by Arnab Dey Financial Planning 20 October 2022
Being a stay-at-home parent has its clear advantages. Not only does it save money on the (ever-increasing) cost of childcare, but it helps a parent and child form a close, mutually beneficial emotional and intellectual bond.
But the job also comes with its challenges. It can be lonely. It can affect future job prospects. It can reduce the family budget to a shoestring. And it can raise questions about contingency plans and worst-case scenarios.
Checkout Four Prime Financial Steps Every Stay-At-Home Parent Should Take:
If you’re hoping to be a stay-at-home parent, let’s ensure that you plan for the challenges so you can enjoy the advantages. Here are five things every stay-at-home parent should have.
1. Find A Support Circle
A support circle might not seem like a financial step, but it can be an indispensable prerequisite for keeping on top of your affairs.
A recent Gallup poll of 60,000 women found that – as compared to their working or childless counterparts –stay-at-home moms exhibited higher instances of sadness and negative emotions. (You can easily extrapolate the findings to apply to male and non-binary caregivers too).
Some experts contend that these negative emotions stem from the erosion of parent-centric social circles in recent years, as more parents opt to spend their time at home with their children.
The truth is, if you’re going to do this, you don’t need to do it alone. Especially as you navigate new the financial terrain of single-income parenthood, having people to talk to is important. And if you’re going to be undertaking the financial steps and best practices below, it’s best to do so with a solid foundation of mental and emotional health.
2. Consider a Life Insurance Policy
People typically consider a single-term life insurance policy for the breadwinner in the family, but life insurance can be just as beneficial for a stay-at-home parent.
In the unthinkable event that you pass away, your child(ren) will still need child care. Since it’s unlikely that the remaining spouse (the earner in this situation) will be able to forgo their income to care for the child(ren), they will have to pay for childcare services. Remember, your job is a job – and it carries a significant price tag in your absence.
A stay-at-home parent should review the important facts about term life insurance and talk with their partner about it. It can be an essential, affordable investment in peace of mind.
3. Try a Budgeting App
Living on a single salary may require a fresh, creative approach to the family budget. The best advice is to try and remain involved in family budgetary matters, even though you aren’t earning an income. In dialogue with your spouse, consider your options for a budgeting app.
Popular options like You Need a Budget (YNAB), Mint, and Personal Capital allows you to allocate funds to various categories (children’s clothing, life insurance premiums, mortgage payments, etc.), so you have a bird’s eye view of where your money goes each month.
4. Keep Your Professional Connections
Re-entering the job force after an extended leave can be an uphill battle. The “motherhood penalty” is a real, widely observable phenomenon, holding back women (and men, in some cases)from resuming their career trajectory.
While the issues around this inequity are systemic (and largely out of your control), you can set yourself up for an easier career re-entrance by maintaining your professional connections.
This can be as easy as updating your LinkedIn page occasionally and reaching out to professional contacts, so they know you are still interested in your previous work.
These four simple things can help ensure that your tenure as a loving stay-at-home parent is financially positive – for you and the child.