Work or Stay Home With the Children A Financial Perspective

							Work or Stay Home With the Children?
A Financial Perspective
  Work or Stay Home With the Children? A Financial Perspective


  Deciding whether one or both parents should work is never easy. There’s not a single
  approach that will work well for all families.


  There are many potential cost savings that can be gained by a parent staying home to
  care for the children. On the other hand, there is also a loss of income. Analyzing the
  details for your own situation is your best bet.


  Sometimes couples have more options when one spouse has a significantly higher
  paying job or more work flexibility than the other. Many people believe that nearly
  any couple can afford to live on a single income, because childcare and other
  expenses linked to work usually use all of the second income. But this isn’t always the
  case.


  Let's take a look at some numbers associated with one spouse staying home:




       Child care savings. $600 to over $1,000 per month for childcare is not an
       insignificant amount.



       Wardrobe savings. Most of us need clothes for work that cannot be satisfied by
       the clothes we typically wear at home. Remember dry cleaning costs as well.



       Commuting savings. You might only need one car instead of two. Even if you
       keep two cars, the cost associated with gasoline, tires, maintenance, and more
       will be greatly reduced.




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    Food savings. If you stop going out to eat, you can save a bundle. If a spouse
    stays home, that can cut down on lunch costs and the morning stops at those
    expensive coffee places.



    Home-based income. Maybe one parent can telecommute part-time. There is
    also the opportunity to start a home-based business that could result in significant
    income. This item might require part-time day care, nursery school, or simply
    waiting until the child is old enough to start regular school.


    Frugality.If you use this opportunity to overhaul your entire way of life, you
    might save a bunch more through simple living. A lifestyle that highlights
    frugality can be a wonderfully simple and meaningful way to live.


When It Might Make Sense to Keep On Working


  1. You're already frugal.If you're already a penny pincher, your main savings
     when moving to a single income will be childcare.



  2. Mortgage qualification.A second income can make it easier to qualify for a
     mortgage. But be careful, if you can't qualify with the one income, you might be
     on thin ice if you ever decide – whether by choice or necessity – to live only on
     one income.


  3. Retirement Income. You can miss out on a lot of retirement savings and 401(k)
     contributions by staying home.



  4. Future ability to be employed.Is your current career important to each of you?
     Dropping out of the workforce can stop your career cold. Consider where you
    would be likely to be in 10 years if you continued working. You might not even
    be able to start at the same level you left.



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                                      5. Divorce. The divorce rate means it's more than likely that you'll be a single
                                         parent at some point. Having your own household is obviously more expensive
                                         than living with someone else. Sadly, most couples don't grow old together. So
                                         consider the ramifications a divorce would have on the financial situations of
                                         everyone involved.


                                   One parent staying home with the children can be wonderful for the kids. It can also
                                   be a financially reasonable solution, depending on the specifics.

                                   Consider the long-term impact and decide if it's the right move for your family's
                                   situation.




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