Financial implications of being a stay at home mom - Guest Post

Author’s Bio: RP is a guest writer for various finance related Communities including CDFA, FCB, Debt Consolidation Care etc. She is a PG degree holder in Marketing and Finance and right now working in a reputed bank as a relationship manager. She is well equipped to write articles on debt consolidation , debt settlement, frugality, savings, economies of states etc.

Financial implications of being a stay at home mom  

Women have to make a decision after childbirth – whether or not to join office after the maternity leave. It is really hard to make a decision and you need to consider several factors so as to decide whether or not to leave work at least for some years. Apart from psychological factors (as you have to sacrifice your career for some time), financial implications are also involved which you need to consider. The option of staying at home may be impossible for single women or if your income is required to make ends meet.  

Stay at home mom - Financial implications  

There are both positive and negative financial implications when you decide to stay at home after childbirth. Read on to know the positive as well as negative aspects which will help you decide whether it’ll be financially beneficial for you to stay at home or to join your job after childbirth.
   

• Save a substantial amount – When you work in an office, you need to maintain strict dress codes for which you need to spend on shopping for the right items. Moreover, you also have to socialize and attend parties for which you need to buy suitable gifts. A considerable amount of money is also spent on traveling. Sometimes, you need to maintain a second vehicle to go office. You also have to go out for dinners as you feel tired to cook food at home after a stressful workday. Last but not the least, you need to spend a significant amount on daycare. 

• Become financially weak – In the present times, many couple need to depend on dual income. So, if one chooses to be stay at home mom, it becomes a burden for the spouse to manage the family finances on his own. Moreover, the situation gets worsened if suddenly the husband is laid off from job.  

• Chances of getting good job decreases – When you choose to be unemployed for a certain time period, you tend to lose the skill and in turn, lose the chances of getting a better job. So, even if you have to leave job for the time being, leave your employer at good terms. Also, try to keep your skills fresh so that you don’t have difficulty to join back office afterwards. 

• Retirement fund doesn’t grow - You may have to lose a significant amount of retirement benefits if you choose to be a stay at home mom. So, you may have to work towards preparing for your retirement. This means that you’d have to cut down expenses so as to save money in order to prepare for your own retirement. Moreover, the situation gets worsened if you need to live on your own at retirement age due to a divorce.

However, even if you decide to leave your job, you can have your husband contribute to a Spousal IRA. Your husband can very well contribute as long as he earns enough to cover the contribution made to the Spousal IRA. However, you need to file a joint tax return in order to do so. In the year 2011, the Spousal IRA contribution limit is $5000 before 49 years of age and $6000 at age 50 or above.  

As an alternative to giving up your job, you can start a home based business. By doing so, you can look after your child as well as earn a substantial income by working at your suitable time. However, you should check whether or not you need to spend a huge amount to start a home based business. You can search online to find a home based business which you can start without spending much. In this way, you can earn and manage your family at the same time. In turn, it’ll give you satisfaction and help manage your family finances in a better way.