A research paper commissioned by the Australian Institute of Family studies in 2008 found that approximately 54% of mothers had returned to work by the time their child was 18 months old. This means that still around half of all choose to stay at home to be full time carers.
Making this decision can be complicated both emotional and financially. Some people have dreamt of being a stay at home parent whilst some could think of nothing worse.
If you are contemplating being a stay at home mum or dad there may be some important things to consider.
Calculate your expenses
You need to have a look at all the things you are spending money on over a couple of months to really understand your expenses.
First tally up all your fixed expenses (things like mortgage or rent, car payments, insurance, utility bills and set amounts you put in savings or other accounts). Then list all your other expenses such as entertainment, phone bills, food, haircuts, pay tv, gifts and magazine or other miscellaneous items.
You should also allow and extra amount which is used for unexpected things such as car insurance or repairs. If you keep a track of all items you spend money on you can see where you can trim things.
What does work cost you?
People may be surprised at how much going to work actually costs you. There is transport, food and coffee, clothing, parking, dry cleaning and more. You may also be spending a lot more on takeout’s because of the convenience factor.
If you are at home you can also factor out cost of child care and you may find you spend less on going places like the hairdresser every 6 weeks. You may also find that by reducing your income your family’s tax gets pushed into a lower bracket.
Once you have figured out your savings you can subtract it from your expenses pile.
Negatives of not returning to work
One thing people often forget about in not returning to work is the fact that you will no longer have money going into your superannuation. It is important to be thinking about this early on to make sure you have enough in your retirement.
Also you might decide to return to work later on once the kids are at school but you need to consider the fact that you are likely to enter back into the workforce earning a much lower income then if you had stayed. Likewise you may be behind on skills by this time rolls around.
It is hard now to really know whether any job is secure or not. Countries are still feeling effects of the GFC and whilst in Australia we did not get as affected it is clear there are still many changes occurring especially in regards to layouts, restructuring and offshoring.
You need to be realistic about your partners’ job security. You should also consider if they did lose their job how easy will it be for them to find other employment quickly. If they work in a very restricted, selective industry you might need to be careful.
Look at the numbers
In some cases the numbers will give you a clear indication of whether it is feasible to remain home or not. If your partner’s income far exceeds your expenses then you probably will have no problem.
Make sure that you also look at extra costs of staying at home (including extra costs of having a baby such as nappies and formula). If the numbers are not clear you may need to take a closer look at your expenditures.
Try living on one salary for 6 months to a year and see whether it is feasible to live on one income. Be open to making sacrifices in certain areas. If you are in extreme debt staying at home could add enormous stress to an already stressful period.
Workplaces are much more open to flexible arrangements then what they used to be. See whether your employer is willing to negotiate part time work or working from home one or two days per week.
You may be still able to save on child care on these other days by finding family members who may be willing to care for the kids (the rate of grandparents caring for grandchildren increases rapidly every year).
For some people they utilise the time of being at home to look at starting their own business which they can run from their home office.
Whatever you choose to do be realistic about it. If the numbers look like it might be a real stretch, you might need to return to work as much as you want to stay at home. Also be realistic about your expenses-there is not point getting rid of everything because you still need to be able to enjoy life.