Families with only one income have a different set of challenges than families with two incomes. This doesn’t mean that one is better or easier than the other – instead, it’s more instructive to see them as two separate scenarios. What works for families with two people working outside the home may not work for families with stay-at-home parents. In this article, we’ll look at some of the best money advice for a stay-at-home parent.
plan early
The most important thing you can do is to make a plan as soon as possible. Even if you’re not sure whether you want to have a single parent at home, make a plan for it as soon as you think it might be a possibility. This can happen when you are expecting your first child, expecting a second child or when your life or job situation changes drastically.
One of the keys to a successful marriage or relationship is open communication. You may find that both spouses have very different expectations for what this lifestyle change might look like. You’ll want to make sure you’re on the same page for questions like these:
- Who will take care of the child?
- Who is responsible for household chores like cooking or cleaning?
- What does the overall program look like?
There is no one right answer to these questions – instead the answers will vary greatly on your own specific and unique situations. But it is very important to make sure that everyone has the same expectations.
budget setting
One of the most important parts of planning is establishing a budget for what it might look like if you have stay-at-home parents. This is especially true if you are migrating from a situation where you have two people working outside the home where only one person is bringing in money from the job.
The simple way to look at an updated budget is to subtract the salary of a lower-paying job and see if you can just live on the salary of a higher-paying job. However the reality is a bit more complicated. Not only will you not pay taxes on income from a second job, but you are likely to be in a lower tax bracket overall and pay less tax on one income as well.
If you’re currently paying for childcare, you’ll also be able to save on that cost with a stay-at-home parent. And in addition, there are additional opportunities for savings when a person is not working outside the home. With more time at home, you may be able to cut your food budget by saving money on grocery shopping and giving you more time to prepare more meals at home. best thing to do make a budget And see what the numbers look like in your situation.
Taking advantage of the side hustle
While stay-at-home parents are not earning money outside the home, they may still be able to bring in money through a side hustle, Side-hustling is much more common and accepted nowadays, and can be an attractive option for stay-at-home parents. While most people won’t be able to turn their side hustle into a full-time jobIf your situation allows, it may be good to bring in a little extra money.
Make sure you are properly insured and protected
One important thing to keep in mind is that if you are in a situation where you are dependent on one person’s income, it is to ensure that you have the right insurance. Make sure the spouse working out of the home has enough life insurance that it will not be a financial disaster if they suddenly die.
If the stay-at-home spouse is caring for young children, it’s also important to make sure they have an appropriate level of life insurance. After all, it will still have a huge financial impact if they die unexpectedly. Sometimes it can be challenging to get life insurance for a stay-at-home spouse, so it can be a good idea to set it up before they leave their full-time job.
how to plan for retirement
One of the best things you can do for your retirement is Individual Retirement Account (IRA) as soon as you can. An IRA allows you to set aside money for retirement and have it tax-free or tax-deferred (depending on whether it is a 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 has earned income, you’re also eligible to contribute to a spousal IRA. Huh. That way you can both contribute to your retirement, even if only one of you has earned 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 one. September IRA If they are self-employed, such as part-time from the side hustle.
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dan miller (91 posts)
Editor is a freelance writer and founder of PointsWithACrew.com, a site that helps families travel for free/cheap. His home base is in Cincinnati, but he tries to travel the world as much as possible with his wife and 6 children.
