Two Incomes to One

Written by Francine L. Huff

This article is courtesy of HomeLife.

Thousands of working mothers are choosing to leave their jobs to stay home with their children. In fact, Census Bureau statistics show a 15 percent increase in the number of stay-at-home moms in the past 10 years. And while those statistics don’t report the number of working moms who want to stay home but feel trapped by the expectation of a second income, conversations with working moms indicate the number is high.

 If you’re a working mother who’s forfeiting her dream of staying home because of the pressure of mortgages, car payments, private school tuition, or other expenses, don’t give up hope. Before relegating your stay-at-home dream to the dustbin, take a realistic look at your current financial situation. Perhaps you’ve overlooked expenses that could be cut or greatly reduced. Or maybe it’s just a matter of being committed to make the necessary sacrifices. For some, the prospect of having a parent at home when the kids return from school is reason enough to make changes. For others, the possibility of regular family meals and more involvement in their kids’ lives is enough to get the ball rolling.

The following tips will help you take an inventory of your current financial situation and make a more informed decision about leaving the workforce.

1. Add up the cost of working. Mothers looking to leave the workforce should add up all their work-related expenses: transportation (including fuel, insurance, and repairs); childcare; clothing (and dry cleaning); supplies; and meals (including lunch out and takeout dinners). These expenses take a huge bite out of after-tax, take-home pay, resulting in the ludicrous situation of working hard to afford items that would be unnecessary if you could stay home.

To figure out where the money goes, start recording all of your spending for a month or two to get a clear picture of your financial habits. Spending $10 a week in company vending machines and buying fast food on the way home because you’re too tired to cook can add up. As a stay-at-home parent, you won’t be around vending machines as much and will have time to cook more nutritious meals, making frequent fast-food drive-bys a thing of the past.

So calculate the total of your work-related expenses to see if your long days on the job are worthwhile.

2. Determine your income needs. Which of your regular expenses are absolutely necessary? Add up the basic necessities — mortgage or rent, groceries, utilities, medical expenses, savings, and so on — to determine exactly how much money your family needs to live. Write them down, and start to create a written budget using the income of the parent who will work.

3. Decide where you can cut back. Do you spend a lot on extras like cable TV, cell phone plans, or entertainment? Perhaps your children are enrolled in costly activities that keep them busy while you’re at work. Are you willing to make sacrifices in unnecessary spending to adapt to your decrease in income? Indicate what you will realistically spend on extras in your spending plan.

Beyond frivolous extras, consider big expenses like private school. Many parents consider a private school education to be the ticket to success and keep Mom employed to afford it. If you have children in private schools, think about whether they are really receiving a better education than they would at a public school.

Deciding to switch a child to a public school might require personal sacrifice, such as spending more time helping out at school, fund-raising, or joining a parents association. But it might be the key to allowing a parent to stay home.

4. Dump the debt. Is monumental credit card debt keeping you chained to your job? With U.S. consumer debt totaling about $1.7 trillion each year, many people are swimming in credit card payments. How much of your income is going toward credit card balances each month? Work out a strategy for paying off these loans before you leave your job. Shop around for cards with better interest rates and transfer your balances. Use any extra income to escalate your payments and refuse to take on new debts. Get in the habit of buying only what you can pay cash for, a useful tactic for when you’re living on one income.

Bottom line: Don’t stop dreaming. Dreams may require hard work, but the work is always worth it in the end. If your heart’s desire is to stay home with your kids, ask God to show you a way, holding onto His promise in 1 Thessalonians 5:24: “The one who calls you is faithful and he will do it” (NIV).

Francine L. Huff is a financial journalist, news editor at the Wall Street Journal, and the author of The 25-Day Financial Makeover: A Practical Guide for Women. She and her husband live in New Jersey.

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