Thursday, March 31, 2011

Becoming a Stay-At-Home-Mom, Part II

Prompted in part by the post Unplanned Parenthood on A Gift Universe. The same information presented below also is a factor when people think they cannot afford a child.

I gave the timeline of my decision to leave the workforce here as part I of this series. Today I will look at how finances affect the decision to have one parent stay home. For our family, this was a fairly easy decision. Firstly, when we found out I was pregnant, we restructured our budget so that it did not include my income. (All of my income since that time has gone to paying off student loans more quickly.) Secondly, even when I was working about 20 hours a week, my take-home pay was "only" about 18% of our income. Many families, however, feel that finances dictate how much time they can have with their children. This post is for you. I hope to provide a framework for you to evaluate your own lifestyle and decide if you might be able to stay home after all. The question is not so much "How much does a baby cost?" as "How much does everything else cost?" Here is a look at our budget:

Fixed Expenses
Charitable donations: Yep, our first line is for church and other charitable donations. It's 10% of our annual gross pay. I'm including this not to look for praise, but to demonstrate that trusting in God is an integral part of managing your money instead of allowing it to manage you.
Debt: Our only debt at this time is my student loans and our mortgage. We intend to keep it that way. By following a budget, you can keep yourself out of the awful cycle of credit card payments. This line is the minimum monthly payments for loans and the mortgage.
Life insurance: For us, health insurance is taken directly from my husband's paycheck and homeowners is included with our mortgage payment, or they would be in this category too.
Car insurance: If you need to reduce spending, consider buying an older car or selling one if you have two. Take advantage of defensive driving courses that lower your costs.
Phone: This is a fixed expense only because you need a way to make emergency calls. Most likely, you will want a plan that allows you to call and receive calls, but be sure to go with the lowest plan that meets your actual needs. You probably don't NEED to be able to send pictures. :-) If you have a cell phone, pick a model that comes free with your contract.
Trash pick-up: If this is not provided by your city or town, shop around!

Adjustable Expenses
Groceries: You can find oodles of articles on how to reduce your grocery budget, so I won't give an exhaustive list here. My main tips would be buy in bulk, get what is in season, experiment with generic/store brand goods, and comparison shop at the public market if you have one. We buy organic meat, milk, and produce and are still only at $200/mo for the three of us, including toiletries and cleaning supplies.
Travel: You must include enough to get one of you to work daily. Does it have to be in your own car? Consider public transportation, carpooling, or biking.
Utilities: Reduce your carbon footprint and your bills by conserving energy and water. An energy usage meter may help you pinpoint areas where you are wasting your money. For example, we recently discovered that in 24 hours, my printer used as much energy turned off as the television used in 30 minutes turned on.
Car upkeep: If you trust your mechanic, ask him/her for an estimate on what you might spend in a year. Remember to include inspection and registration costs.
Work expenses: We found we needed to put aside a little bit each month for things like work clothes, certification courses, and those "optional" lunch meetings.
Home repair: Maybe $10/month or less to cover light bulbs and such.
Medical copays: Make this an estimate based on your typical medical and dental costs.

Optional Expenses
Internet: Unless you work from home, you do not need internet. You can access it at your local library to read my blog.
Cable: We don't actually have cable, but I'm putting it on here because most people do. Not necessary.
Gifts: A good place to remember, "Those who mind don't matter and those who matter don't mind." A heartfelt card (especially handmade!) conveys sentiment as well if not better than a gift.
Restaurants: On the 16th of each month, we go out to celebrate our wedding "monthaversary." When we had less disposable income, this sometimes meant the dollar menu at a fast food chain. If finances were dire, we would cut this line completely.
Entertainment: We each have our own disposable income line, which is used for going out with friends, clothes*, books, games, craft supplies... basically anything not listed in another category. We've had this as low as $10/month per person. Again, if times were tough, we could cut it completely.  *Most of what we wear is a gift, hand-me-down, or from a thrift store, so this has been adequate.

To make your budget, fill in what you are spending on fixed and adjustable expenses. Compare this total to your net income. Now is there enough to pay for a child? Keep in mind that with one of you staying home, you reduce costs for work expenses, travel, and save whatever you were spending on child care.

We are raising a happy, healthy little boy on $40/month in the "baby" line of the budget. Cloth diapers, breastfeeding, and thrift store clothes make this very doable. If one of you stays home, you have more time to do things like hang laundry outside to dry and make meals that are not pre-packaged (and usually more expensive), which saves you even more!


  1. Great post! Of course, sometimes it's going to take more than budget changes to make a difference. When I was pregnant, my paycheck was just enough to cover our expenses, but my husband's alone wasn't. Since I wanted to breastfeed, I really wanted to be the one to stay home with the baby (though we would had him stay home if we had to). We prepared by spending the whole pregnancy living on the bare minimum and putting every spare penny in our emergency fund. We did have to live on that fund for about a month, so I'm glad we had it -- the rest is going to end up going toward our first home!

    What really did it for us was a new job for my husband. Luckily it was also a better job. But sometimes providing for your family does mean choosing a job that has good pay and benefits, but which you don't enjoy or which doesn't help your career path. Sometimes it means putting that masters' degree on hold or taking on an evening job. Or moving to a place with lower rent that isn't as convenient. None of it is stuff we WANT to do, but when you have to, you can usually find a way!

    These are great tips, by the way! It's so encouraging when you find out how much you save by not working. Commuting costs, a second car, packed or purchased lunches, and daycare all add up. And when you're home, you often have more time to make food from scratch and save money that way.

  2. An excellent summation of all the thought involved in the decision to stay home. I never thought I would be a SAHM, but with 4 kids in 7 years I don't think there would have been any other way of doing it!

    Thanks so much for listing my blog on your BlogList. I look forward to reading your future posts.

  3. @Sheila: There are certainly situations in which just restructuring the budget is not enough. Thanks for the reminder! It's great to hear how well things worked out for your family.

    @Jazzy Mama: Four kids in seven years? I will definitely continue to watch your blog to find out how you do it. :-)

  4. 1. i'm interested in what all the $40 a month on the baby line includes if you are willing to share. i can't think of $40 that we spend on david each month - maybe 1/2 as much now that he's eating a little (he really would just rather nurse!)
    2. i would LOVE to know how you are able to keep your grocery budget so low every month. we have a meal plan and what not, but it seems like we get stuck at a number and can't seem to get it any lower. i would LOVE to get it down to $200 a month - we did just do a little price research at costco to compare to the non-bulk prices of walmart (where we do the majority of our grocery shopping), so i'm hoping that will help, but we just don't have the room to accommodate buying as much in bulk as would like :o(

  5. Hi Donna! We rarely use $40/month on Peter. Things we have used it for include toys, cloth diapers (recently picked up some prefolds, for example), and winter clothes. We're saving up for a carseat once he outgrows his infant seat, which is where most of the money in that line will go. We carry over from one month to the next.
    I think I'll address question 2 as a separate blog post.