Leaving your career to stay at home with your kids is a big decision. It's one that can be filled with endless amounts of happiness and satisfaction...or regret and frustration. Before you make the switch, here are a few things to consider from a financial perspective.
How much money do you need to live on each month?
This question can be a difficult one to answer. On the one hand, by staying at home, you will not be spending money on child care costs, which can be a significant expense for working mothers. On the other hand, stay at home moms often have a lot of other monthly expenses, such as groceries, gas, and entertainment. The amount of money that stay at home moms need to live on each month can vary widely depending on their individual circumstances. Track your expenses for a month and see where you spend money that you wouldn’t spend if you were not working.
What is your family’s estimated yearly income if you were to stay home with your kids full-time instead of working outside the home?
Take your spouses yearly income and see if there are any expenses currently being paid out of it that would go away if you were not working. Think about gas money, eating out at lunch (although you may still do that from time to time), dry cleaning for clothes, dress cloths and shoes, etc.
One way to test if you can manage on one income is to take your income and put it into savings and then use it only to pay those expenses related to you working (child care, gas, etc). Pay all other bills through your spouse’s income. Will it work? Trying it out before you make the final decision can help you see how realistic leaving your job can be from a financial perspective.
How will leaving your career impact your plans for retirement?
If you leave your career, you are likely to end up with less money saved since you won't been working. On the other hand, you may have more time to focus on how your savings and investments are doing. Ultimately, it will come down to a balancing act between saving and spending. Stay at home moms who are leaving their careers need to make sure that they have a solid plan in place for how they'll continue to save for retirement. They may also need to adjust their expectations for what their retirement will look like. but with careful planning, it is possible to make a successful transition into retirement regardless of how you've left your career.
Before you quit your job to stay at home with your kids, these are a few money issues you should consider. Although your yearly income may drop down to zero, that doesn't mean you're not worth anything! Stay at home moms are definitely worth their weight in gold.
If you’re feeling unsure about transitioning to stay at home mom life or just want some support in making this decision, join my group and let’s chat about it.
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