5 Things Stay at Home Parents Can’t Afford to Ignore

by Tracy · 5 comments

It’s not always an obvious decision to have a stay at home parent go back to work once the kids are in school. Although most families could put a second income to good use, it’s not always offset by the convenience and peace of mind that comes with having one parent always available to chauffeur to their after-school activities, for sick days, snow days, school vacations, to help with homework, cook meals and clean (whew!). Many stay at home parents are also finding that it’s not easy to get hired after so many years out of the workforce with so much competition for jobs.

If you are or are planning to be a long-term stay at home parent (or being the breadwinner in such a family), here are five action steps to take to make sure that you and your family are as financially protected as possible.

1. Make sure both spouses have adequate life insurance and that the working spouse carries short and long term disability. Most disability insurance policies only pay between 50-70% of the disabled person’s income – not enough for most families to be completely “okay” but it will cover a significant portion of the absolute necessities at a time when you need it most. The other parent can also bridge the gap by returning to the job market as you transition into the new situation.

2. Look for opportunities to keep your skills current, your network strong and your resume updated. If the need arises, you’ll want to be ready and able to start looking for a job right away. This could mean anything from keeping professional licenses current to making sure to keep in contact with all of your former co-workers and others in your former field.

3. You might need more flexibility than a traditional job can offer, but you should have the time to be able to pull together a side job or two to add to the family’s savings. Even an extra couple of hundred dollars can be a huge help. As an added bonus, the side job can keep job skills current and provide a much-needed outlet for the stay at home parent. (Here are 15 suggestions you should try.) Not that stay at home parenting isn’t more than enough to keep a person busy! It’s just that most people need something outside their family to feel like they still have their own identity.

4. Save for your own retirement! Talk to your investment adviser about opening a spousal IRA or a similar retirement vehicle. Not only does it allow you to put away more tax-advantaged money away above the single-earner limit, it’s also a sound step to take for the stay at home spouse’s financial protection. Even if divorce is not an option, both spouses having their “own” retirement accounts can reinforce the idea that both are equal partners, which in turn can lead to greater marital harmony and satisfaction.

5. Do stay in the loop when it comes to money. It usually works best for one spouse to be the one in charge of the finances, but both need to be involved in making major decisions and both need to know where all the money is. In addition, there needs to be a quick and easily accessible way for the other spouse to step in should the need arise.

This doesn’t mean that each spouse can’t have their own stash of personal money, just that both spouses need to have full access to the household’s money and financial records. (Note: in some specific cases full access to household money would not be advisable, such as in the case of addiction or mental illness. In these cases, there still needs to be open communication and a plan in place for how to deal with finances if the spouse with access is incapacitated)

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  • just-wondering says:

    Nice to hear ideal advice! Can’t we take the whole affair without any ideologic phrases on how to educate your child best and not to care too much +++ blabla bla? Living costs must be covered and somehow all the duties in a house or flat must be done, the child shouldn’t be left alone, every-body needs his free-time – so how to arrange all this without being a raven-mother? What to do, if your government prefers “cheap labour” and doesn’t want people with higher skills being ‘in labour,’ while taking away the few part-time jobs, so that it doesn’t fit in the price-list for work/per hour? Over-skilled, or too old, or what ever ??- Labour isn’t a free market, where people are chosen, because of best qualities and skills! Exploitation on an elite level works different. Industry and Business-owners are in power to select the work-force under following criterias: young, healthy, high-skilled, high-motivated, ambitious – single! What do you do, if you have to pick your kid at 4.00 pm at the latest as single father, or if you want to look after your elderly parents? Free time isn’t free if your mobile rings all the time with questions to problems at work!
    Some governments even think, it is necessary to pay a certain amount of money, that women raise a kid and don’t lose any income, the new idea is, that afterwards they should get paid if they raise the kid at home and not in a kindergarten. Government wants to save money, gives birth-controll and openly planns who, when and how succeeds in this perfect high-praised ideal-economic! Pfui – The chancellor of this society is a woman themselves! Ts!

  • Austin says:

    Anytime you’re staying at home I believe that’s a choice. Get moving and try to get a job if you think you’re capable. But if you choose to stay at home then quit complaining and do your best when it comes to your kids. Happy parents = happy kids.

  • Patricia says:

    This is just how we did it, but we need more help for the medical bills – I think having some grant writing skills is also helpful…

    Having good community support is helpful also, sometimes that disappears if the problem to be funded for relief is not “sexy” enough.

    One has to consider the big life changes that can not be so planned for….or anticipated.

  • For sure. Both spouses need to know what is going on with the finances.

    I think the spouse who stays at home needs to be more entrepreneurial when it comes to going back into the workforce. The skills you learn as a stay at home spouse will open you up to a lot of new things that may not appear important in an employers eyes but can really really valuable in doing something outside the box.

  • Emily says:

    Totally agree w/last tip. Never a good idea for one spouse to be clueless when it comes to family finances. A problems waiting to happen.

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