Becoming a stay at home, mom or dad is one of the best decisions you make but can also be one of the most financially challenging. But, if you can find ways to organize your finances, you may be able to afford to leave work. And take care of your children at home full time.
More people than ever are considering taking the plunge into life at home with their children. Some of the reasons are because you get to enjoy and be a part of all your children’s important milestones. You can give the little ones all of your time, love, and attention. Plus, other benefits include you’ll have some freedom within reason to organize your day as you see fit.
It’s likely if you’re reading this piece, you don’t need any further convincing about the advantages of staying at home. So, let’s start by looking at how you can manage your finances better to make your wish of becoming a stay at home parent come true.
If you own your own home, the house payment is probably one of the largest costs that leave your account each month.
To cut a few dollars off this expense. You might want to consider refinancing your mortgage to a cheaper interest rate. Or otherwise expanding the remaining mortgage to refinance breakeven over a longer-term.
Alternatively, if paying the mortgage is only possible to afford on both incomes. You could look at the option of downsizing your home to somewhere cheaper. This applies if you’re renting a home too. There are always less expensive places to live; it just takes a bit of research to find them.
Money can fritter away on food throughout the month so easily. If you look at your recent bank statement, you may be surprised to see how much you spend on food, especially takeaways.
With that in mind, there’s a lot of money that can be saved each month by meal planning each week. To begin, you just need to jot down a list of what you need to buy to make the meals and snacks you want and then focus on getting only those things.
With your list and your budget ready to take to the shops. Try not to stray from the plan and resist the urge to impulse buy extra bits. In turn, you’ll reduce your monthly outgoings, making your dream of becoming a SAHM one step closer than it was before.
Keep in mind, sometimes making meals from scratch can be cheaper (and healthier) than buying shop-bought items. And so you may want to weigh up whether you have the time to invest in making fresh home-cooked meals too, such as pizza and bolognese.
When you’re working at opposite ends of the city from your partner, or you both have several different commitments to tend to, having two cars is a must.
But when you’re based at home taking care of the children, you may find you don’t need a second car as much, if at all, because you’ll be able to use the local conveniences more often. Meaning there will be less need for you to travel far. Which prompts the suggestion of whether you would be better off selling or giving back your second car to the leasing company to save some money.
Cars are expensive to buy and run. The repairs, tax, gas, and so on takes away a lot of your income each month. However, becoming a one-car family will relieve you of those costs. Giving you more wriggle room in your budget to afford to become a full-time stay at home parent.
Family days out can be costly, especially if you’re heading to a theme park, cinema, bowling, etc. If you enjoy these kinds of activities, they can usually pose a problem for your budget.
The reality is, when you become a stay at home parent, you may not have the means to go out every day with your little ones. And so, it’s essential to look for free activities and days out you can all enjoy. That way you’ll get to have fun with your family, without breaking the bank. And staying at home to look after the kids will be much more possible money wise for you.
Here are a few examples of places you can look for free events and activities;
While you and your partner are still working, if you can afford to, think about using a large chunk of your earnings to pay down any debt.
Whether credit card debt or a furniture finance agreement. Paying off your debts will remove unnecessary stress. But also free up more money in your monthly budget to make staying at home more affordable.
When you move from two incomes to one, some sacrifices will need to be made to make sure you have enough money to live on. Part of that includes looking at your spending to see whether there’s anything you can cut back on or let go of completely.
For instance, instead of paying for a monthly membership at one of the best gyms in town. Instead, you could consider downgrading to a cheaper gym or workouts at home for free.
Other examples include looking at how much you spend on things like clothes and treatments. Suppose your hair costs $100 every few weeks to get for a cut, color, and style. As an alternative, you could consider purchasing a $5 DIY dye box at home to save some money each month.
It’s natural to feel nervous about making a move to quit your job and rely on one income. One of the best ways to test out if it works is by giving the idea a test run.
For example, consider moving your earnings aside into a separate account when your next paychecks come in. Then try living off the one income you have left in the account. This includes budgeting for bills, food, and spending money.
A test run will give you a realistic idea of whether you can adapt from two incomes to one and see whether it’s financially possible.
When you have two wages coming into the house, if something urgently needs taking care of, such as a medical bill. You can probably manage to pay it off with both of your wages without too much worry or stress. But when you’re on one income, paying for urgent mishaps gets a bit more complicated and challenging to do.
Therefore, if you want to become a stay-at-home parent, it’s essential to save up a lump sum of money for those just in case incidents that may catch you off guard.
With a stash of savings, if the roof needs urgent repair because there’s a leak. Or the car has broken down on the highway and needs transporting to the garage. You’ll have money set aside to take care of it, which will prevent the risk of you needing to borrow money from the bank or a loan company.
An emergency fund can be as small or as big as you like. But, usually, the bigger, the better! If you can, try to aim to save three months’ worth of your regular expenses.
If you’re still uncertain about dropping one income, you may want to think about looking at jobs you can do a few hours a week around looking after the children from home.
Here are a few you can do to make some money from home as a SAHM;
By getting a small part-time job, you can maintain peace of mind that you’ll have a bit of extra income per month. From time to time, you may also appreciate the opportunity to do something different in between looking after the little ones.
Becoming a stay at the home parent on one income is possible, so long as you’re willing to make sacrifices. If you enjoy being frugal, looking for deals, and budgeting, using some of the above tips will be much easier for you to do.
By using some of the above tips. Such as making cuts to your outgoings, refinancing your mortgage, and getting rid of your second car. Will make room in your budget each month to save and spend on things you and the family enjoy. This means that once in a while, you may also be able to afford a holiday away together.
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