Xcited as we are on the birth of our child, it comes with many tough challenges and choices that needs to be made. One of that is the decision of one parent to quit the job and stay at home to take care of the child.
If you already have children or expecting a baby, the thought of one parent being at home will cross your mind. But switching from two earning members in the family to one and cutting the income into half has its own sets of adjustments and considerations that need to be made as the big question remains; in today’s economy and time, can this be possible?
Identify your expenses: To know if you are ready for this shift, you should first look at your expenses. List down your fixed expenses which will remain unchanged and then look at the variable and new expenses which will increase with the switch.
Fixed Expenses
. Rent or EMI
. Grocery
. Utility bills
. Gas and car loan /EMI
. Medical bills
. Investments and Insurance premiums
Variable Expenses
. Clothes and other stuff for new child
. Date nights / family nights
. Family holidays
. Birthdays and special days gifts and parties
Identify the expenses which will go away for a stay at home parent: As one person stops going to work, of course there are going to be change in expenses as well. Firstly, you save on travel cost. Traveling makes the major chunk in this list as a public or private transport, you have to spend daily on it to commute for work. Lunch with colleagues and office wear shopping are some other expenses you save upon.
Plan your decision in advance: The decision to quit work for one parent when planned and well prepared for, helps to cope with the change more efficiently. When you are in the 1st or 2nd trimester, think about this option if you have to, start saving more and spending wisely only on what you need. The 6- or 3-months’ time will give you a chance to build up on money and provide you with cushion while you adjust to the change in lifestyle.
Budget: The new change is going to disturb the existing budget and you will have to redesign a new one to accommodate these changes. Drop in the income will call for change in lifestyle and a new baby will call for new expenses. Investment will see a shuffle as need to invest for child’s future and education will come in forefront while you still have to continue with your retirement and emergency fund. EMI or rent eats away a great portion of your income, so you may want to consider reducing this by either shifting to a less expensive locality or paying a chunk of your loan before you have one parent staying at home.
Medical Policy: When you quit, you lose your medical policy and other benefits that you earlier enjoyed as perks from your employer. Medical expenses are going to incur as life proceeds so will have to plan for it.
While these are some of the ways you can gauge your affordability and viability of the idea of one stay at home parent, you can make it possible by:
Alternate income for stay at home parent: Once the decision has been made, you have to think about alternate ways to make money while staying at home. Start taking tuitions or other activity classes at home, or convert your hobby into business like baking and taking party order for food. If you are good with words and writing excites you, you can take up content writing.
Lifestyle Change: A new baby means many new expenses and to accommodate them and the change in income, one has to bring small or big lifestyle changes. A latte on your way to office can be skipped. Weekly dinner dates can now be fortnightly. Cut down on your shopping and stick to what is needed and not go after all your wants.
Grow in your existing job: The parent who is working will have to give more than 100% in office to make sure that the promotion and bonus comes in on time. You don’t want to miss an opportunity to get more money coming home.
Sudden dip in the income can be scary. To know if you can afford it and how are you going to sustain it is important. You also have to continue with your investments and future savings. Hence, planning your financials plays a crucial part.
In my next blog I will talk about “Money talks you should have with your parents”. Stay around
Till next time
Stay Strong and Pray for our Country
This blog is a part of Blogchatter’s #blogchatterA2Z challenge.
35 replies on “How to know if you can afford one working parent and prepare for it?”
From two income to a single income can be a major change for someone whose is new to this setup. But planning it ahead of time, looking for ways to balance out the expenses, or starting something from home can be a good option. I would say, it is all about getting used to of this change.
I can relate to this post, it’s so important to know your fixed expenditure and variable expenditure and then plan your financial goals!!
It can be a challenging task especially for family with 1 income planning in advance helps a lot . Among all Identifying the expenses which will go away for a stay at home parent should be assessed first
Yes new baby arrival is one of the biggest change in life and it has a profound impact on finance too. pre planning is must to figure out what will work best for you and your family.
Agree with all the points, Hansa. A lot goes into planning a baby and the most important aspect is the finances. When you 1 income ,it becomes more difficult but if you plan well in ahead, everything can be sorted.
A very practical post, Hansa. The decision is obviously tough and depends on the situation in each family, however, I agree these tips are very relatable.
This is a very practical post. While staying at home could be a necessity, planning in advance and redesigning budget can actually help make the transition easier and fulfilling.
Given the current expenses of families, it has become imperative that both parents work. But it isn’t easy also for many families. Thus these points really help to decide on having single earnings or double.
A very practical post! This post is relatable as in my household, my husband is the only earning member and I chose to look after my kids. So, before making this decision, we actually evaluated on the above mentioned points.
This is such a well curated and researched post. running the family with 1 income can be challenging but with proper planning everything can be managed well
This post is so profound. I am forwarding this to all my friends who are parents.
I could not agree more with you on all the points,. A financial plan for the future is very important before planning for a baby.
I remember the time when I had to quit my full-time job and be a mother to my 5 years old child and an unborn one as well. It’s a tough call. Planning and having your expenses sorted helps take the decisions.
This is a very interesting and relevant topic. The loss of one of the incomes is definitely going to have a long-term effect. Hence a studied decision after examining all repercussions needs to be taken. You have covered all the aspects nicely. Sandy N Vyjay
sometimes it becomes challenging to meet all the demands of the family if there’s one working parent; financial planning is required.
This post will help a lot to manage finance when one parent is working. Raising a kid is no joke and at the same managing finance is important. Ideas u shared are useful.
This is one of the most crucial factors to think when planning a baby. Finances play a major role when it comes to raising kids
It is important to know fixed expenditure and variable expenditure and then plan for financial goals!! Great thoughts.
Thanks a lot 🙏
A very good and practical tips for going to a single income. I am sure it requires a lot of planning before taking the step and it can become very hard if not planned well and correctly.
Absolutely. Money matters in any form need lot of planning
This is a very well researched post. I am not a mother but all these details had made me thoughtful.
This post comes frm experience as we too had to make this decision after our 1st child
This question is really important and it can change children future and mindset . I had quit my job for my kids. There is no one to care for my kids and I don’t trust on childcare.
Same here dear. I had to do the same and it was such a tough decision to make
I can so relate to this post. When my son was born, my wife had to sacrifice her job and I couldn’t thank her enough. Giving up a job you love to take care of your child is tough.
Indeed. I had done the same and it’s a tough choice to make.
Pre-planning especially when it comes to finances is a must. Well researched post Hansa.
Thanks a lot. This post had a lot yo do with my personal experience as I chose to be a stay at home mom after my 1st child was born and it was a tough decision to make.
Planning for a baby is a leap of faith. So many things have to be considered, however once the baby arrives everything falls into place.
Yes indeed
This is most difficult decision for working parents. These tips would definitely help in finding the right approach
Yes it’s a touch decision to make. Thank you.
This is a very informative post especially for those who are contemplating on becoming a single parent. A child’s responsibility is immense and planning has to be done .
Yes it can be tough and requires a lot of planning.