Financial security can be achieved regardless of your situation in life. Most people think that if you give up your career to be a stay at home parent, it is impossible for you to secure your finances. That is not true. In fact, there is always a chance for you to make yourself financially secure.
Without a doubt, having a child can affect your household budget significantly. Your expenses will definitely rise. After all, there are more mouths to feed. Not only that, there will be expenses that you did not have before. You need to pay for baby food, clothes, and other furniture. Regular check-ups with a pediatrician is also another cost that you have to make. There are so many changes in your budget once you become a parent. And this does not even include the non-financial demands that a child will require from a parent.
Your child, while he or she is still young, will need special care and attention. More than the financial responsibility, you need to be there for your child physically, emotionally, and mentally. Most Americans feel like their presence is important in the life of their child. In fact, 6 out of 10 believes that a child will be better off if at least one of the parents are staying at home.
But if your expenses are expected to rise when you have a child, how can the whole family survive if one parent stays at home?
The good news is, it is very possible for you to achieve financial security even if you are staying at home. You do not have to feel so useless because only your spouse is earning an income.
4 strategies to be financially secure as a stay at home parent
Stay-at-home-parents, even if you are not the breadwinner, can still contribute to the household budget significantly. In fact, you may even be worth more than what your spouse or partner is taking home. According to a study done in the past, with everything they do around the house and for the family, stay-at-home parents should earn around $113,000 annually. After all, they clean the house, do the laundry, cook meals, manage the financial books – all on top of taking care of the kids. The work does not end by 5 pm. It does not stop when the weekend comes. You can just imagine how hard it is to stay at home and take care of all the tasks around the house.
This is the reason why stay-at-home parents should never feel inferior even if they are not earning money. The mere fact that your household budget can save on expensive day care services is already helping your overall financial position.
But apart from that, there are also other things that you can do to ensure financial security while staying at home. Here are 4 tips that you can consider.
Keep planning for retirement
Retirement is one of the best ways to secure your future. Do not assume that you can live off the retirement funds of your spouse or partner. You need to have your own retirement savings. Talk to your spouse about setting up a Spousal IRA. This fund will not just help increase the net worth of the household. It can also stay protected and under your name in the event of a nasty divorce.
Set up your emergency fund
Another thing that you can do is to set up an emergency fund – or at least make sure that you have enough. Even if you are not earning the money that will be contributed to this emergency fund, you can help ensure that there is always a sufficient amount in there. Not only that, you should set the rules on how it should be used. Guard it so it will only be used strictly for emergencies. That way, your funds will not be used for unnecessary expenses. And if it happens to be used for an actual emergency, make sure the funds will be replenished.
Have financial goals
It also helps strengthen financial security if you have financial goals. This will force you to look forward into the future and come up with ways to improve your financial position. Your goals will also help you with every little decision that you make. Should you buy something or should you save it? Is it wiser to use your bonus to go on a vacation or should you put it aside as part of the down payment of your home? If you have well-defined financial goals, these decisions will be easier to make.
Opt to earn at home
Finally, you can help achieve financial security because you can actually earn at home! You do not have to do it full-time. After all, your priority should be raising your kids. But that does not mean you cannot contribute when it comes to the income. According to statistics, 3.9 million Americans are part-time remote workers. A remote worker is someone who can work in the comforts of their home. More and more companies are actually starting to accept this. Before you have kids, discuss with your employer if this is a possibility for you. That way, you can continue to earn while staying at home to take care of the kids.
Being a stay-at-home parent will require a lot of adjustments from you, that is for sure. Admittedly, it will be difficult – but it can help improve your life. Even if only one person is bringing home an income, that does not mean it should be harder. You just have to manage your finances differently from now on. Even if you are now a single-income household, it does not have to mean you will live a restricted life. You can still make it work but you have to implement strict financial management rules.
How to manage your finances at home
Being a stay-at-home-parent does not have to force you and your family to live a lower standard of living. In fact, it can go the opposite way. If you learn how to manage your money wisely, you may be able to improve it. Here are the different ways you can improve your finances.
Focus on your budget
Effective budgeting is always the best way to manage your money. Whether you have it in abundance or you are always lacking, a budget plan will allow you to stay in control of your finances. It will show you how much money is coming in and where it all goes. This makes it easier for you to stay on top of all financial transactions. It will also give you the information that you need to make a smart decision about your finances.
Control your expenses
Since you are at home, you may be able to focus more on your household expenses – thus making it easier for the family to achieve financial security. You can decide what areas and spending categories you can cut back on. You can cook your meals from scratch and save on child care services. If you take time to learn how you can even start making your own cleaning products. There are so many expenses that you can really consider cutting back on.
Set up saving goals
With all the expenses that you are saving on, there will be a lot of extra money available to you. That means you should set up saving goals that can help you improve your financial position. It can be saved for an investment, emergency fund, retirement money – anything that will make your finances more secure.
As you can see, financial security does not have to be elusive even if you are a stay-at-home parent. If you are determined enough to work hard on it, you can improve your net worth even with your new financial arrangement.