If I Stop Working to Be a Stay-At-Home Mom, Will We Ever Catch Up Financially?
If I stop working to be a stay-at-home mom, will we ever catch up financially?
That is the question I asked myself twenty years ago when I quit my job to become a stay-at-home mom. What about my retirement? How will we pay for college? Will I regret coming home?
Yes, it is possible to be a stay-at-home mom and have a financially-healthy household. Are we completely there yet? No. Are we on our way? Hopefully. We have made many mistakes, and a few good choices along the single-income road we’ve been traveling for the last two decades.
Our Mistakes
#1 Spending Windfalls
The main mistake we made was spending most of our windfalls instead of saving them. My husband and I disagree on the exact definition of a windfall. In my opinion, a windfall is any type of money not earned in a regular paycheck. The money can be acquired from an odd job, a tax refund, or an unexpected source. My husband feels that money can only be classified as a windfall if you aren’t expecting it.
No matter how the extra money is defined, it is important that the one-income family put it aside. In the past we’ve taken vacations, bought furniture, and paid off debt with our increases, when we should have established an emergency fund instead. We still go on vacation; but only if we can afford it.
Most financial advisors agree that everyone should have savings equal to three to six months of monthly income. If the family has debt, then $1000 should be put aside in a contingency fund before attempting to pay it off. Otherwise, the paid-off debt will simply be borrowed again
during the next emergency.
Inevitably, our emergency would come. Cars broke down, appliances quit running, and children needed stitches. We lamented the trip to Disney World, or the new leather couch. With no reserves in sight, we borrowed to fix the calamity.
In general, it is a good idea to save money during the good times, because they probably won’t last forever. It’s been a long time since we’ve been in a position of hyper-abundance, but if we’re ever in that situation again, we plan to put lots of money away for a rainy day.
#2 Unnecessary Debt
The other mistake we made was creating unnecessary debt. This correlates directly to mistake #1. Without a contingency fund, we created debt during emergencies and had no savings to build upon for things like cars or home maintenance. So we borrowed money for those things as well.
What We Did Right
#1 A Job With Good Benefits
One thing that worked out well for us was my husband’s job. He chose a job with good health insurance and retirement benefits. He currently has supplemental eye and dental insurance that help us to cover the costs of keeping the eyes and teeth of our five kids healthy.
We know many one-income families in which the husband is a business owner. I have heard people say that income is unlimited when you are a business owner-there is no ceiling on how much money you can earn, like there is in an hourly job. The concept of saving during the good times would definitely apply in this situation, because the income is so variable.
#2 A Fifteen Year Mortgage
When we could finally afford a bigger house, we chose to stay in our home and refinance our 30 year mortgage to a 15 year mortgage instead. At the time we still owed around 22 years on our home loan. We cut 7 years off our mortgage, rather than adding 8 years with a new home and a new 30 year mortgage. We haven’t experienced the positive fruit of that decision yet, but I know we’ll be happy about it someday.
Kids in College
We have been able to send our kids to college. Of our two college-age children, one of them has no student loan debt. Our oldest daughter attended college for two years. She paid for half, and we paid for half. Our son will have some college debt, because he chose to play college baseball for an expensive, independent South Carolina college during his freshman year.
It is our hope that our three youngest daughters, with our help, will pay cash for their college educations. It is possible, even in a single-income family, with scholarships and part-time jobs.
Stay-At-Home Moms With Grown Children
I have been so encouraged by stay-at-home-moms with adult children. I know several that supplement their husband’s income by doing various things at home. The flexible schedule allows them to earn money while remaining available to their grown children. They have baked, babysat, boarded dogs, or helped their husbands run businesses by answering phones, doing payroll, or filing papers.
Although our decisions haven’t always been wise financially, I don’t regret one minute of my time as a stay-at-home-mom. Someday, I hope to earn more money at home selling things on eBay or Etsy, and writing stories. In the meantime, I want to enjoy being with my children, and count my blessings every day.
What was your biggest financial success or failure as a Stay-At-Home Mom? I’d love to hear from you.
Kristie
If you would like to read about my journey to becoming a stay-at-home-mom, click on the following link: Becoming a Stay-at-Home Mom, the Hard Way
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Jennifer Wise says
These are great pointers. The mortgage is a huge one. The interest people pay over 30 years is just astounding. A 15-year makes things a little tighter for 15 years, but not having a mortgage payment 15 years later is huge. We did that, too (sort of–long story) and now that we have kids in college, it helps a ton to not have a mortgage payment. A good job with good benefits is also SO helpful! Thanks for sharing this great post at #heartandsoullinkup
Kristie Schubert says
You’re welcome, Jennifer.