Five financial tips for stay-at-home parents

The decision to quit a job and stay home with the kids is often a difficult one. During the COVID-19 pandemic, there has been an increase in stay-at-home parents, often driven more by necessity than choice. Now that some parents are re-entering the workforce, others are considering their options. With a new era of hybrid and remote working ushered in by the pandemic, there are more options than ever for parents who want or need to spend more time with their children at home, whether that’s working remotely, moving from a full-time job to a part-time schedule, or walk away altogether.

Whatever the reason, the decision often comes with significant financial and lifestyle changes. It’s important to review your family’s spending patterns and set goals when going from two family incomes to one. Here are five tips for parents experiencing this change:

No. 1: Calculate your time frame. Look to the future to decide if this change might be permanent, and adjust your financial plans accordingly. If you plan to return to work, set the amount of time you expect to be home and make sure you can still maintain your financial goals during this period. If there is a gap, you may want to explore other employment options, such as working part-time or contract work. It’s also a good idea to keep in touch with your professional network in case you decide, or need, to go back to work.

No. 2: Make sure you are insured. Examine your spouse’s insurance benefits and make sure you and your children are still adequately covered in the absence of your benefits. If possible, plan to have life and long-term care coverage for yourself and disability insurance for your spouse in case something happens to either of you and you can no longer work or care for your children.

No. 3: Understand your value. A single-income family does not mean that only one spouse is contributing financially. As a stay-at-home parent, you save your family many of the costs associated with working-parent households, such as childcare, cleaning services, and other expensive convenience products and services. He may even find that in his new job he has more time to spend on money-saving activities, like shopping around and cooking, rather than dining out.

No. 4: Keep your goals on track. Your household budget may need to adjust with your decision to become a single-income family, but don’t neglect your long-term goals. Consider working with a financial advisor who can help you plan a family budget, prepare for retirement for both spouses, and set realistic financial goals based on family income.

No. 5 — Contact your spouse. It is important to communicate your financial plans, wishes, and concerns to your spouse. Together, recognize the benefits and challenges that will come with the decision to become a stay-at-home parent. Make sure you are aware of any potential career or salary changes that may come up in the near future for your spouse before you commit to staying home. Ultimately, these factors and many more can influence your decision to stay home. But whatever you decide, do so with a full understanding of how it can affect your finances.

Bronwyn Martin is a Financial Advisor and Chartered Financial Consultant with Martin’s Financial Consulting Group, a Wealth Financial Advisory Practice of Ameriprise Financial Services, LLC. in Kennett Square and Havre de Grace, Md. She specializes in both fee-based financial planning and asset management strategies and has been in practice for over 21 years. To contact her, visit www.ameripriseadvisors.com/bronwyn.x.martin

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