Babies change everything. It’s true.
Right away they steal a bit of your sleep and your sense of freedom. But you don’t mind so much because they’ve also got your heart.
And the funny thing is, having a baby—or hey, even thinking about maybe one day starting a family—makes you evaluate your priorities. After all, if this little one has your heart, she also deserves your mind. And so you consider and plan, debate and decide—making lists of everything you’ll do to care for your baby.
For some of you, that includes working to provide the best. For others, it means leaving a job you love for a new one. Both paths are noble, and neither is more righteous. But parents who are thinking about heading home have a specific challenge ahead of them: a loss of income.
If you truly want to be a stay-at-home parent, follow the tips below to do what’s best for your family without guilt or worry.
1. Have the tough conversations
Assumptions: Thoughts trapped in your heads for too long can seem like “truth.” That’s why you should admit your fears and desires out loud and give your spouse a chance to respond. Avoid making assumptions. Instead, ask what they think and how they feel about the decision for you to stay home.
Roles: With your spouse at work and you at home, you run the risk of harboring resentment in your new role. Talk about how you’ll divide responsibilities. Both of you should feel respected and appreciated for what you do. You might even give each other a break from duties once in a while.
2. Make adjustments to your budget
Sinking fund: Make a trial budget based on one income, and don’t forget about sinking funds.
A sinking fund encourages you to save now for future purchases like a new roof, a vacation or a car. Figure out when big purchases will need to be made, how much they’ll cost, and the amount you should save each month to reach your goal. Then put it in the budget.
Tax bracket: When you leave your job, you might see a boost in your spouse’s take-home pay. Yes, we’re serious! Let’s say you both make $40,000 per year with a gross combined salary of $80,000. This puts you in the 25% tax bracket. After federal taxes, your income is reduced to $68,287.
With one spouse leaving work, you’d probably guess the number would be cut in half, equaling $34,143. But your new household income qualifies you for the 15% tax bracket. That means your income after federal taxes will actually be $34,907—nearly $800 more per year than you expected!
3. Evaluate your spending
Top categories: Look for ways to trim your budget in the big areas. Most people are able to make cuts to their food, clothing and hobby budgets. But your family might be different. You could eat out less and use coupons or savings apps. Take your clothes to consignment shops before restocking your wardrobe. Talk about how much little things add up and where you draw the line on making big purchases without spousal content.
Cash envelopes: Without a second income to fall back on, you may need some accountability. This is where cash envelopes come in. Visit your teller at the start of each month to withdraw cash for your top spending categories. Then carry the cash in envelopes and make a commitment: When the money’s gone . . . it’s gone.
4. Take a step before running
Practice the plan: You’ve heard the advice, right? If you plan to live on one income in the future, don’t live on two now. This is solid information. Before you leap into this decision, practice first. Take the time you have left at your job—nine months, a few years—and set aside every dollar you make.
Budget your spouse’s income and watch your paychecks add up fast. You can use this money to save for a down payment on a house, build an emergency fund, or take a dream vacation. In the meantime, you’ll learn how to live with less—it’s a win-win!
Supplement your income: As a stay-at-home parent, you’ll contribute to your family’s income in huge ways by saving money and being intentional with your resources. But maybe this still won’t make ends meet for your family. What should you do? It’s a tough call to decide between using wisdom in your finances and trusting God to take care of your family.
And the best news is that parents now have even more options to earn money at home. You can start by considering your skills, researching possible opportunities, and then taking action on your ideas. And remember, we are here to help you every step of the way!