The Financial Price Of Being A Stay At Home Mom

by Vered DeLeeuw · 198 comments

I stayed home with my young children, putting my career on the back burner, for five years. Financially speaking, it was a bad move. Economists say that the stay-at-home parent who gives up a career may lose about $1 million over the years. While I didn’t lose $1 million, I have lost 5 years of wages, 401(k) contributions (and growth), and that many years of employer contributed social security benefits.

Looking back, I wouldn’t change a thing. I loved being there for my kids when they were little, devoting myself 100% to them, and forgetting about everything else. But I was lucky: my five-year stint as a stay at home mom took place while the economy was strong; my husband was employed and earning well throughout those five years; he didn’t leave me for another woman (happens more often than you’d like to think); and I am now back to working almost full time, from home, this time for my own growing business.

Despite my successful experience dropping out of the workforce for a few years, I believe I took a risk. I know for sure that I didn’t plan it fully. I believe that many of us choose to stay home with our kids because of strong maternal instincts that make us forget other considerations. Ideally, a woman should weigh all her options and make this decision very carefully.

Slave Labor?

Patricia left an interesting comment on a previous post, Money Mistakes Women Make, that sparked the idea for this post (Thank you Patricia!) In her comment, Patricia says, “I think the biggest mistake that women make is ‘staying home to raise the children.’ The US economic system penalizes you on every front and it is tough to get sufficient quarters of Social Security in to get medicare or any return. It’s essentially SLAVE Labor, which no one in our country can truly afford to pay for. We don’t notice the loss because it seems like it has always been so. We need to redefine work and benefits.”

I agree with Patricia that the US economic system penalizes stay at home moms. It also penalizes working moms, by the way, as we’ll discuss later. But as long as this is the system and we need to work with what we’ve got, is there a way to stay at home and protect yourself financially, or is staying home always a mistake?

Leave The Door Open

“I quit my job and never looked back” sounds freeing, but you shouldn’t do it. When you quit, do it professionally, giving your employer plenty of time. Do everything you can to leave on good terms, and stay in touch with your former employee, coworkers, and colleagues via emails, visits, and taking the occasional professional seminar. As much as it would be great to just forget about work for a few years, a safer way to go about it is to keep your skills fresh and stay in touch with the people who could be your ticket back into the workforce.

Protect Yourself Financially

I used to be an attorney and specialized in Family Law. My advice to women in general: If you can help it at all, do not sign a prenup. And if you must sign one, hire an attorney to make sure the prenup is fair. A standard prenuptial agreement typically protects the wealthier side of the relationship, but a fair agreement needs to address the possibility of you staying home with the kids. In this case, any future settlement should compensate you for the loss of wages and benefits. Splitting everything in half upon divorcing may seem fair, but if you gave up $150,000 a year in salary to take care of him and the kids for 10 years, is it really fair to split everything in half when that portion might just be worth $100,000?

Consider Sequencing

Staying home doesn’t have to be an “all or nothing” type decision. Many women around me, myself included, have chosen to build a career, have two kids just 1-2 years apart, enabling us to stay home with both of them for around five years, then go back to the workforce. Staying home for five years is easier, in terms of going back to the workforce, than staying home for 10, 15, or 20 years.

Start A Business

Despite attempts at changing this culture, Corporate America still expects employees to have no life outside work and punishes working mothers in the form of paying them less (20% less than women who are not mothers according to some sources) for doing the same work.

Many mothers find that being a mother in Corporate America is simply too hard, and opt instead to start their own business. I recently read about a woman who quit her job to start a cupcake-baking business. Others like myself started a freelance writing business. It can be done, and you can make good money. Be prepared to work very hard, but you’ll be doing something you love and working in your own time and on your own terms.

Ditch The Guilt

Mothers have worked throughout history. Ignore the headlines reporting studies that tell you you’re damaging your kids when you work outside the home. There are countless other studies that show how your kids will be just fine. The privileged upper middle-class mom who stays home with her kids and takes them to the playground each day is a relatively new phenomenon. Mothers have always worked, taking their kids with them when they could, or leaving them to be cared for by the extended family when they couldn’t.

You can also think about it this way: Being a working mother is not something selfish that you do for yourself and to the detriment of your children. When you keep working, your family is stronger. If something were to happen to your husband’s job, or to your marriage, you won’t lose everything. You’ll be able to land on your feet and keep going.

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{ read the comments below or add one }

  • Caroline Joanna Mary Bowman says:

    What some people do when one partner – often the wife – stays at home for a spell, is to put them on a salary. Yes, the salary is also put towards family expenses, same as it would be if they worked in a regular job, but this way one is paid for ones labour to a fair rate. If the caregiver vanished, what would the other partner be left having to pay for? I’d guess an au pair or nanny to start with, daycare, extra eat-out expenses, possibly house cleaning, yard services. That adds up a lot. That’s valuable financially. If one is paid an actual salary, it’s a lot harder legally to simply refuse to pay support commensurate with that, should the marriage end, because clearly the work was remunerated before. And that’s just it. It is work and it is valuable and should be seen as such. What do we do in exchange for our time and care? We get paid, but somehow not if you’re an at-home parent, because then it’s ”not right”. Why? Why is it not right? Why should one person sacrifice everything for a full time, unpaid job and risk their future against divorce or death or any number of things that no one wants or imagines but which 100% can happen?

  • Jessie says:

    I just saw this post and the comments. I rarely comment on any type of blog. I have to say something here. I was a stay at home for my children for many years. I was stupid and quit college when I married young. Now I am a divorced single mother. I never worked the entire time I was married. I actually became disabled and can not work. I’m trying to go back to college. My child support payments barely cover my house payments. I’m trapped. I can’t receive disability payments from the government because I don’t have the required work hours to receive the coverage and same for social security. I can’t receive social security benefits off of him until he is 62 or dies. Soon my kids will be older and I won’t even receive the child support. I trapped myself. I made the mistakes and trapped myself. I am happy I stayed and was there for my children. However, you never guess or expect what the future holds.

  • Candace says:

    We have worked so hard for gender equity in the workplace. For women to have opportunities equivalent to men in a variety of fields. Surely the goal wasn’t to sacrifice raising our own children – whether it be for 1 year or 5 years or 15 years. Our work life is long so we need to think of our earnings over our whole career. Our system needs to welcome parents (male or female) back to the workforce following caregiving because of the potential value they will provide and not penalize them for care-giving. More on this at

  • Adrienne says:

    My husband makes the money and I am currently home taking care of the kids and house. I do all housework, laundry, gardening, driving, errands and childcare. I have been in a lot of pain and found out I need 2 root canals on some badly done fillings. My husband refuses to pay for them because we have been arguing lately and he’s angry with me. I think this is completely wrong and any squabble should not interfere with my health. I have some money I have saved to help launch my business and he is telling me I need to use that for my teeth. Thoughts?

    • Ariel says:

      That’s total bullshit! And it sounds like a huge red flag. The breadwinner should not be denying the dependent medical care just because of some stupid squabble. If you’re married, his assets are YOUR assets. I say he needs to get some sense kicked in his head, and fast, or he should be without a wife.

  • nancy says:

    I couldn’t agree more with this article. Vered you are right when you say that some stay at home moms can feel like being a slave. I speak from experience and not only that but some days I feel all lonely but knowing how many expenses are cut by taking care of my own children I can only say: worth it. Kids are a job no doubt and if you need side income you can check workfromhomenewsletter com (not affiliated with them that’s why I don’t link) I got an online job there a while ago.

  • John Corona says:

    Making money when you are at home is not easy. not every people could do this. when you are a stay at home mom, you need to earn money from somewhere. such situation is very hard to solve, one side is family, children and other side is work and money together. I think on this situations government should care to unemployed Moms, they should have benefits Like NJ state do.

  • Melody says:

    The best of both worlds!

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