When people start having kids, sometimes they contemplate the fact that they would like one of the parents to stay home with the kids while the other parent works in order to provide for them. Unfortunately, in today’s day and age, this is often an incredible hardship with the costs of housing, food, gasoline, cars, etc. But with some careful planning and budgeting, you might be able to pull it off, if indeed it is that important to you. For us, we do plan on having my wife stop working once we have kids, and there will be quite a few sacrifices we will need to make in order to make this happen.
Really, the first thing you need to do is to know exactly how much money you bring in and how much money goes out the door each month, down to the last dollar. If you don’t know that, you won’t know how much you will need to make each month or what expenses to cut. Figure out what the working parent will be bringing home each month, and figure out all your expenses for the month. This will give you a base figure to work with.
Figure out the money you will be able to save just by having one parent stay home. That parent won’t be driving as much, which will reduce your gasoline expenses, and you can often get a discount on your car insurance by driving less. Check with your insurer to see if you can qualify. You also will not need to pay for daycare, work clothes for the stay at home parent, etc, and see what other things you will be saving money on.
If your income and expenses don’t match up, figure out where you need to make cuts in the budget. Do you have subscriptions to things you don’t need to live and would be willing to give up? That would be things like movies by mail, Tivo, reducing your cellphone plan minutes, premium cable channels. For us, giving up things like these would be easy if it meant being able to make our plan work. Also, eating out less will save you a ton of money.
Reduce the funding of your retirement accounts for a little while. Some people will scoff at this, but really…if you want to stay home with your kids, you might think about doing this. You can always play catch up in a few years, and sacrificing some retirement savings to be able to stay home would be worth it to us.
Don’t forget the tax write-off that your children provide. This will save you money on your taxes every year, reducing the amount you need to bring home.
Consider moving somewhere cheaper. This will be a big one for us, as we already made a ton of sacrifices in order to live down by the beach. Once our first child comes, we will probably end up moving away from California, where we can actually afford a house with a yard and a school that we will feel OK about sending our children to. Plus, the overall cost of living here is so expensive that just by moving, we would save a lot of money on regular old household things like groceries.
Think about getting a second job. I know that we all put a lot of hours in at work and the thought of going to yet another job afterwards is not something we enjoy thinking about, just how important is it that someone is home with your child all day? I remember my Dad took a second job when we were little, before he started making the big bucks. He worked at the liquor store for a while part time, and then at the bowling alley. Even if it is only a few hours a week, that extra $200+ a month could really go a long way to making your dream a reality.
Although it seems insurmountable, oftentimes with strict budgeting and some sacrifices it is possible to have one parent give up their paid day job to stay home with your kids, if only until they leave for elementary school. Friends of ours in San Francisco, one of the most expensive places to live, did not think they would be able to…and that was 2 years ago. With some careful thought and reworking of their financial situation, they were able to achieve their goal, and now with baby #2 on the way, they will have to scrunch even more. But they still plan on doing it, and you might be able to as well.