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Just like any other type of financial
planning, "staying home planning" starts with a detailed
list of income and expenses. The important thing to remember is to include
the "costs of going to work," because after you have your
child, these costs are going to increase dramatically.
If you want to get a quick preview
of the real picture, use this simple formula to estimate your real earnings
after figuring in your direct work-related expenses:
INCOME - DIRECT EXPENSES
= REAL EARNINGS
Remarkably, many of the women interviewed
for Staying Home reported that their family income actually
went up after one parent stopped working outside the home. This usually
occurred because the husband got a raise, was promoted, or actively
sought a higher income by changing jobs or starting his own business,
often in combination with the wife continuing to work part-time or starting
her own home-based business.
For example, when Lauren Garofalo became
pregnant with her second child, both she and her husband started planning
for her transition to being at at-home mother. It took them two years
to pull off their plan by paying off debts, saving money, and moving
to a less expensive house in another state. When Lauren started staying
home, her husband entered a new business and raised their income by
70 percent.
For other families, the loss of one
income means making sacrifices. It is not unusual for fathers (or the
mother--if the father is to be the stay-at-home parent) to work an additional
job, either full or part-time. For some, living from paycheck to paycheck
means living under the constant threat of financial ruin. One woman
told Staying Home interviewers how frightening it is for her
to realize that "you're only a check or two away from homelessness."
This woman also has a wonderfully supportive family that helps out with
occasional donations of cash, clothing for the kids, stamps, coupons,
and even aluminum cans to be returned for their deposit.
These stories represent the two extremes.
Most families, however, find themselves in the middle: they aren't swimming
in money, but they might be able to squeak by without two full paychecks.
Whether by need or a philosophy of
simplicity, many families express satisfaction in living by nonmaterialistic
values and passing these values on to their children. Many parents feel
that moderation and balance are some of the most valuable models they
can provide for their children. "We knew it would be a struggle
financially, and we have faced many hardships and problems concerning
money," says Kelly Knapp, an insurance agent and underwriter who
is now at home. "But I would rather be poor and be with my children
than to be comfortable and be away from them. My children don't realize
we're not wealthy and are very happy and content."
Besides considering how
much you'll need to make ends meet, you should also consider
how long your family will need to get by on
a reduced income. Two years, until you can build up a free-lance business
at home? Five years, until your only child enters kindergarten? Sixteen
years, until after school activities and jobs sometimes means the kids
will get home later than you do?
Strict budgeting for only four or five
years--the same amount of time you invested in your college career--may
be a relatively low price to pay to get what you really want.
Copyright 1999 by Spencer &
Waters
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One rule of thumb is that you need
to make roughly 2-1/2 times your child care costs for working outside
the home to be economically advantageous.
You should also consider how
long your family will need to get by on
a reduced income
Want to know more?
Then read
Staying Home: From Full-time Professional
to Full-time Parent
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