Can You Afford to Stay Home?

One of the biggest issues to tackle during pregnancy is the decision of whether to work or stay home after the baby is born.  There are many factors that weigh into the decision, but one of the biggest factors is finances.  If you give up your income, can you afford to stay home?

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The first step in figuring out whether leaving the workforce is a feasible option is to communicate with your partner.  It’s crucial that both parents be on the same page when making such a large decision that will have a significant impact on the family’s finances.  Discuss things such as each person’s attitude toward sharing one income, and make sure that the joint money relationship is healthy.  Also discuss things such as employee-sponsored health benefits, whether this decision will mean having to change healthcare coverage, and how much the new coverage will cost.

The next step is to list all expenses that will be directly related to working.  This includes childcare, purchased food costs, clothing needs, and commuting costs.  Compare the total of these costs to the total income the mother regularly brings in each month.  Sometimes, these numbers are very similar, making the net income brought in by the second wage earner very low.  Other times there is still a significant net benefit to working.

Third, draft a hypothetical one-income budget.  Be realistic when assigning values to all the expense categories, and see whether living on one income is possible.  If there is a deficit – but it’s small – brainstorm whether there are part-time or entrepreneurial things you could do to fill the gap, or if you could creatively cut back expenses in order to make ends meet.

Finally, try to live according to the one-income budget for the duration of your pregnancy.  This will show whether the plan was realistic, if it needs to be adjusted, and demonstrate whether you’re both committed to sacrificing a little in order to meet your goal.

If the numbers don’t work out the way you were hoping, don’t give up your dream of staying home.  Instead, commit to changing your financial circumstances – pay off debt, reduce expenses, and try to get creative with alternative income sources.  After some hard work and commitment, you could still reach your goal!