How to Prepare Your Finances to Become a Stay at Home Parent
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Want to become a stay at home parent? Here are 5 ways you can prepare your finances for your family's new transition!
Working from home has been a blessing for us for many reasons, but being able to spend more time with our girls is the biggest one.
Getting to this point, though, took some changes to our mindset and finances.
Becoming a Stay at Home Parent
If you're thinking about making this transition, I want to share five ways you two can prepare your finances.
Unload Your Debts
Lowering your financial obligations is a smart move for several reasons. Getting rid of high interest debts like credit cards means more money stays in your pockets.
If you're dropping to a one income family, getting rid of debts eases the burden of the spouse who is working.
If work hours gets cut or there is a layoff, the two of you can ride it out a little easier with smaller expenses.
Reducing or eliminating your debt may also help you get better rates on bills like car insurance, making it a double win.
Optimize Your Expenses
While you're dumping the debt, take some time to review your budget and see if you can get better deals on what you're spending.
We've found that calling and negotiating with our cable and insurance companies gave a big bang for a few minutes of effort.
Looking for ways to save money on your bills? I have some tools that we use and love, including how cut my smart phone bill by more than half with Republic Wireless.
Buffer Up Your Savings
Give yourselves some peace of mind and protection by boosting your savings. Not sure how much?
Start by making sure you have an emergency fund with at least 3 months's of essential expenses.
If you're starting a business, go ahead and add some more money into savings. I know it seems counter -intuitive, but the first year can be rough as you discover and manage the cash flow.
Cash Flow Your Business on a Shoestring
Even if your main focus in on taking care of the kids, earning some income can not only help with finances, but give you an outlet for your talents.
You can start a side hustle as a freelancer, using your talents and connections you already have.
Running a business while home withe the kids can be done, but it does take creativity and working smart.
One huge boost is finding the right tools to build and grow your business.
To save you time and money, I created a work from home toolkit guide, where I share my favorite services and tools.
You also want to tap into resources like your local SCORE chapter to get some objective and experienced perspectives on your business.
Keep One Another in the Loop
The biggest tip I can offer you two is making sure that you have regular check-ins and updates with one another.
Having one (or both) of you staying at home can be a wonderful opportunity, but it's not always easy for either one.
Have date nights and discuss openly and kindly how you're feeling. It's normal to be a little anxious and talking about it can help out.
Thoughts on Becoming a Stay at Home Parent
If you're looking for some more tips, I did an interview on His & Her Money with some of the highlights and challenges of becoming a stay at home parent.
I also did a show about the realities of working from home with kids on the podcast.
For those who already made this transition, what advice would you offer? If you're thinking about making this leap, what questions do you have?
Couples may also want to look at their health insurance coverage. Changes may be necessary if the family uses the group plan for the soon-to-be stay at home parent. COBRA plans are often very expensive as you lose the employer contribution. The options are switching to the other group plan, or buying through the individual market.