This is a collaborative post by Ellie Jo with financial tips for stay at home parents.
Picture by timkraaijvanger
Staying at home to bring up your children is no simple task. Some profess that it might even be one of the hardest jobs in the world. Choosing to stay at home, maybe because you love the idea of having a significant impact on your kid’s upbringing. It could be because you miss them so much when you’re at work that you want to spend more time with them. Or perhaps remaining at work and paying for childcare, leaves you with little to no money left over to spoil your family! For those thinking about becoming a stay at home parent, creating a budget is essential of course, however, there are other areas you would benefit from looking at also.
Financial Guide To Becoming A Stay At Home Parent
Squirrel Fund
Whether you’re at home looking after the kids or working 40 hours a week, an emergency fund is necessary for everyone, particularly those who have dependents to care for. It’s the money you set aside each paycheck, that you put into an accessible access account. And it’s there solely to catch you when you fall into one of life’s many unexpected pits that demands payment for you to escape. Who knows, your partner could lose their job, or become incredibly ill. Your squirrel fund will give you some money to support you through those tough times.
Cover Your Family
If you don’t have insurance to cover unexpected illness, death or job loss in your family, it’s something that you should strongly consider when either you or your partner are thinking about staying at home with the children. Realistically, your squirrel fund will only get you so far in helping you out with emergency situations. However, there are affordable term life insurance policies that can bridge the gap of, for instance, if you lost an income – whether through illness, death, or job loss. Term life insurance, in particular, is a great option. Instead of providing a lump sum payment, to cover the cost of living, a monthly payment goes to your bank account to help pay monthly expenses.
Retirement Plan
You may or may not have a period in mind where you think you’ll likely want to return to the workplace. Perhaps you don’t want to return to work at all. With employment comes a variety of benefits. One of those being that you are enrolled in a pension scheme. This is when money leaves your account regularly and builds up a healthy sum for your retirement. When you stay at home, it’s essential to think about how you will support yourself through retirement without a pension plan. It’s in your interest to consider setting up a private pension with a reputable provider. This will help to secure away your money until you are older.
Staying at home with your children will be the most challenging and rewarding experience. Perhaps you won’t have a paycheck to show for it, but you will have the memories and satisfaction of bringing up your children on your own for a large part of their lives. Finances can often be the wall that stands in the way of those wanting to be a stay at home parent. However, with some careful planning, your wish could become a reality.
