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Becoming a stay-at-home parent is a big move. Many parents that have made the switch agree that it is their biggest life achievement and one of the most rewarding experiences they’ve chosen. The benefits can’t be denied – but there are financial and emotional decisions to be made before you put your career on hold.

One of the biggest concerns parents have is working out the finances.

Couples that are used to surviving on two pay checks will almost always struggle to move down to the one. However, with pre-planning being a stay-at-home parent can be financially doable. And better yet, it could be one of the best ‘jobs’ you’ve ever had.

Here are a few considerations before making the switch:

1. Develop a Post-Baby Budget; and Test it

It is important that both parents are on board with the decision. It’s not something you can do without your partner’s support – especially when it comes to family budgeting. One of the biggest challenges with being a stay-at-home parent is developing a realistic budget to work with. Weigh up how much income you will be losing and take your everyday expenses to form a hypothetical budget you and your spouse can work with. Financial planning is an important step so you want as much time as possible to test out the post-baby budget.

Before making the switch, test out your hypothetical budget for at least one month. This will give you time to adjust to the new lifestyle, make adjustments or look for areas that can be improved. It will also ease you and your family into the new spending habits and help determine how realistic your budget estimates are.

2. Weigh Up What Is Most Important in Life

Many people decide to become a stay-at-home parent because they want to be there for the biggest moments in their children’s lives. Even the most career-driven parent can take a step back and appreciate the beauty raising children at home holds.

Ask yourself what the most important things in your life are and use this mantra to help make the required cut backs and sacrifices to make the new ‘job’ work.

You may need reminders along the way about why you chose to stay home, and that’s ok. But by weighing up the biggest things for you in life and what choices you need to make to get there – not just in professional success and the accolades that come with it, but the people in your life – family, too. Knowing that being a stay-at-home parent can enrich your life through the time you are spending with your children can help to create comfort with the financial decision you will need to make.

3. Review Your Spending and Adjust Habits

A trial run of the hypothetical budget will help you to review your spending and adjust habits accordingly. Some parts of the plan will work perfectly; whilst other areas will require more sacrifices and work to make it happen. Be prepared to make continuous amendments both in terms of how you spend your time and money. It is about staying organised – and that can take practice for many new stay-at-home parents.

Regular spending habits may need to be changed too. You don’t need to wait to quit your job to adjust spending habits – this is something you should be testing as early as possible. Begin with luxury items and take the time to find out whether you are prepared to live without the premium TV channels or daily coffee and bagel run. These cuts may seem painful at first, but they will pay off in other areas later.

4. Be Economically Flexible

Just because you’re making budget cuts within the family, doesn’t mean to say you can’t find ways new ways to earn money. Living on one income is may be stressful initially, so if it’s really not doable for your family, it may be worthwhile to consider ways you can stay at home and earn money too.

Be open and flexible to reasonable options and speak with other stay-at-home parents to find out what they do to take the financial pressure off.

Earn by saving or take up a hobby you can do from home with flexible hours. Some example could be starting a basic website blog, doing childcare or admin work you can comfortably do from home whilst still spending adequate time with your children.

5.  Budget by the Same Rules

When one parent is on a strict budget and the other is earning their regular pay check and spending money, it can lead to resentment in the family. For a stay-at-home parenting situation to work, both partners need to be on the same page and be budgeting by the same rules (regardless of who is earning and who isn’t).

Both partners should have equal access to the household funds so both partners feel they are working hard – whether it’s in the workforce or being a stay-at-home parent.

You won’t know straight away how much to allocate to both you and your spouse and it may take a while to get your head around the idea. But it will be important to play fair and overestimate to allow for emergencies or shortfalls. Start by working out an equal percentage of your partner’s income you can both agree on that will go into your individual funds. It is then up to you and your spouse whether you want to save this income for a big purchase or spend on a regular basis.

This article contains information that is general in nature. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs before making any decisions based on this information.

Main image source: Shutterstock

  • Your family’s financial situation is definitely the big one.

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  • Some great tips, thank you for sharing.

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  • These are all great tips. I think being a stay at home mum means you need less ‘stuff’. Things can often be simpler and managed because you realise what’s really important – what you need vs what you want.

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  • Great tips. We live on one income, I’m a stay at home mum. We budget our spending and rview it every now and then. Our kids don’t go to child care or before / after school care. I’ve children from friends coming to our house after school. I don’t take money for that, it’s just to bless them. We live a simple but happy life.

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  • Great tips and very useful. Can I add yet another tip?
    Work out how much the cost will be for paid child care, after and before school care, when you are working out your budget.
    At one stage I worked purely to pay the child care costs and the rent, no other money left over. With more frugal budgeting by my partner, I could have easily stayed at home and saved the extra petrol costs of travelling to work, had a vegie garden and saved even more.

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  • A lot of couples these days have to have everything new, the big house, two cars and the latest in electrical items and technology. They then complain that it’s too hard to survive on one income. Try working part time, paying high rent and supporting 2 kids because your ex-husband doesn’t pay child support like he should. The kids have never gone without, the bills are paid and there is always food on the table. However our furniture is second hand, the TV is 20 years old as is the fridge.
    Don’t expect to have what your parents have after working for 40 years as soon as you have kids and you’ll be better off :-)

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  • As a single parent – living on one income is definitely do-able. It has to be! But in saying that, all of my friends with kids are couples and some have 1 parent at home and some both work. At the end of the day it’s about what’s right for your own family. Budgeting is a must. Being careful with money. And having an emergency fund for the unexpected. But I do my best not to judge others – what works for your own family is what’s usually best. Great tips in this article for living on one income though.

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  • And it’s really important to put aside some cash to build an emergency fund. Things like big medical bills can hurt a lot if you’re not prepared.

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  • It is still doable to live off of one income. Centrelink helps low income earners too. But, I agree with these points to, you have to be careful with your money. There are lots of corners that you can cut in this way.

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  • Staying at home may not be financially doable for many parents, but they are still being the best parents for their family. Being a parent is complicated, it is about providing for a family, being there for a family and nurturing them and watching them grow. Most parents do the best they can and I do not like to compare stay at home mums and mums that work out of the home. All mums are valuable and important.


    • I agree with you. There always seems to be this debate about stay at home vs working for wage parent. It’s all tricky.

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  • It depends if you have a mortgage and how much your payments are.
    I know a couple who are currently paying $500.00 per WEEK. Add to that electricity, gas, rates & taxes, running and maintaining their cars,(both work shift work – public transport is not available both ways for 2 of the shifts for both of them plus sometimes their shifts overlap). They live mainly of fresh fruit, veg and meat. Sandwiches and fruit for work + kids for school. One parent only works part time. Both are on low – medium wages depending on their shift. $500.00 weekly out of one wage – I very much doubt they could do it. They have cut their expenses to as low as they can.

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  • I am a stay-at-home mum and being able to be there for my daughter is the best reward ever! :-)

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  • I relate most to point no. 2. I’ve always felt happy to be a stay at home mum.

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  • this is a great article, full of useful information – I wish this was around to help us when we decided to start and family and move to one income. Some great tips here.

    Reply

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