Five financial tips for stay-at-home parents

The decision to quit a job and stay home with children is often difficult. During the COVID-19 pandemic, the number of stay-at-home parents has increased – often more out of necessity than choice. While some parents are now 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 before for parents who want or need to spend more time with their children at home – whether it’s work remotely, go from full-time to part-time, or move away altogether.

Whatever the reason, the decision often comes with significant changes in lifestyle and finances. It is important to review family spending habits and set goals when transitioning from two household incomes to one. Here are five tips for parents going through this change:

N ° 1 – Estimate your timeline. Look to the future to decide if this change might be permanent, and adjust your financial plans accordingly. If you are planning to return to work, determine how much time you plan to spend at home and make sure that you are still able to maintain your financial goals during this time. If there is a gap, you may want to explore other employment options like part-time work or outsourcing. It’s also a good idea to stay in touch with your professional network in case you decide – or need to – return to work.

# 2 – Make sure you are insured. Review your spouse’s insurance benefits and make sure that you and your children are still adequately covered in the absence of your benefits. If possible, plan for life and long-term care insurance for yourself and disability insurance for your spouse in case something happens to you and you are no longer able to work or care for your children.

# 3 – Understand your worth. A single income family does not mean that one spouse contributes financially. As a stay-at-home parent, you save your family many of the costs associated with working parent households, such as child care, cleaning services, and other expensive convenience products and services. You might even find that in your new role, you’ll have more time to spend on money-saving activities like shopping and cooking rather than dining out.

# 4 – Keep your goals on track. Your household budget may need to be adjusted depending on your decision to become a one-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 both spouses’ retirement, and set realistic financial goals based on household income.

# 5 – Communicate with your spouse. It is important to communicate your plans, desires and financial concerns to your spouse. Together, recognize the benefits and challenges that will come with making the decision to become a stay-at-home parent. Make sure you are aware of any career or salary changes that may arise in the near future for your spouse before committing to stay at home. Ultimately, these factors and many more can influence your decision to stay home. But whatever you decide, go ahead with a full understanding of the impact it can have on your finances.

Bronwyn Martin is a Financial Advisor and Certified Financial Consultant with Martin’s Financial Consulting Group, a financial wealth consulting firm of Ameriprise Financial Services, LLC. in Kennett Square and Havre de Grace, Maryland. She specializes in two profitable financial planning and asset management strategies and has practiced for over 21 years. To contact her, visit www.ameripriseadvisors.com/bronwyn.x.martin