Families with only one breadwinner face a different set of challenges than those in two-income families. This does not mean that one is necessarily better or easier than the other – instead, it is more useful to see them as two different scenarios. What works for a family with two people working outside the home may not work for families where one parent is staying at home. In this article, we’ll look at some of the best financial tips for staying at home.
Make a plan as soon as possible
The most important thing you can do is make a plan as quickly as possible. Even if you’re not sure you want a parent to stay at home, make a plan of what it will look like as soon as you think it might be possible. This could be when you are expecting your first child, or when you are expecting another child, or when your life or career situation has changed dramatically.
One of the keys to a successful marriage or relationship is open communication. You may find that both spouses have very different expectations of what this lifestyle change might look like. You’ll need to make sure you’re on the same page to ask questions like:
- Who will take care of the children?
- Who is responsible for household chores such as cooking or cleaning?
- What does the general schedule look like?
There is no one right answer to these questions – instead, the answers will vary greatly depending on your own and unique situations. But it is very important to make sure that everyone has the same expectations.
One of the most important parts of making a plan is making a budget for what it might look like if a parent was staying at home. This is especially true if you are migrating from a situation where two people work outside the home to one where only one person brings money from the job.
A simplified way to look at an updated budget is to subtract the salary of the lowest paying job and see if you can live with only the salary of the highest paying job. But the reality is a bit more complicated. Not only will you pay taxes on income from the second job you no longer have, but you will likely be in a lower tax bracket overall and owe less tax even on the only remaining income.
If you currently pay for childcare, you may also be able to save on this cost with a stay-at-home parent. Moreover, there are additional opportunities for saving when not one person is working outside the home. With more time at home, you may be able to trim your food budget by spending more time to save money on groceries and preparing more meals at home. The best thing to do is Create a budget And see what the numbers look like in your case.
Benefit from side business
While a stay-at-home parent may not be making money outside the home, they may still be able to bring in money through side hustle. Side struggle is more common and accepted nowadays, and can be an attractive option for the stay-at-home parent. While most people wouldn’t be able to Turn their side hustle into a full-time jobIt might be a good idea to bring in a little extra money if your situation permits.
Make sure you are properly secured and protected
An important thing to consider if you are in a situation where you are dependent on a single person’s income is to make sure you have the right insurance. Ensure that a spouse who works outside the home has adequate life insurance so that it is not a financial disaster if he dies suddenly.
If a stay-at-home spouse is looking after young children, it is also important to ensure that they have an appropriate level of life insurance. After all, the significant financial impact would still be if they died unexpectedly. It can sometimes be difficult to obtain life insurance for a stay-at-home spouse, so it may be a good idea to set this up before leaving their full-time job.
How do you plan to retire?
One of the best things you can do for retirement is to prepare a file Individual Retirement Account (IRA) As soon as possible. An IRA allows you to set aside money for retirement and make it tax-exempt or tax-deferred (depending on whether it’s Traditional or Roth IRA).
Contributing to an IRA requires that you have earned income, but if you file a joint tax return and your spouse earns income, you are also eligible to contribute to a spousal IRA. This way you can contribute to retirement even though only one of you has earned an income. You may not be able to contribute to a 401(k) without an employer, but a stay-at-home parent may be able to set up September Iran If they are self-employed, such as a part-time side business.
Dan Miller (77 posts)
Dan Miller is a freelance writer and founder of PointsWithACrew.com, a site that helps families travel free/cheap. His main base is in Cincinnati, but he tries to travel around the world as much as possible with his wife and six children.