Stay-At-Home Parent? Follow These Tips To Build Your Assets And Become Financially Secure
Staying home with your kids and caring for your home is incredibly rewarding. Nothing beats being present for their first big milestones and spending quality time with those you love.
But there’s a big misconception that stay-at-home parents must sacrifice their financial well-being once they leave their careers.
The truth is, you can raise a family and build your nest egg simultaneously. Let’s look at a few practical ways to make it happen!
How Stay-At-Home Parents Can Take To Protect Their Finances
Financial security is crucial because, honestly, you never know what’ll happen.
From divorce to layoffs to medical emergencies, having even a few thousand in a bank account can make a huge difference in your family’s life. With it, you can plan for the future and help your family when needed.
So, how exactly can you build your financial health while being a stay-at-home parent? If you want to create your nest egg, follow these five steps:
#1 Plan Everything Before Becoming A Parent
Leaving the workforce to care for your family is a big decision.
For this reason, you need to sit down and evaluate your family’s financial situation before making the leap. Calculate your family’s loss of income and try to find ways to adjust your budget accordingly. If you can, build an emergency fund that can cover at least half a year of expenses to give yourself a financial cushion in case something happens.
By planning ahead, you and your family can confidently ease into everything.
#2 Understand The Trade-Offs
Everything in life has a trade-off, including being a stay-at-home parent.
While you might save on childcare, you may not save as much for retirement or climb up the corporate ladder as fast. Remember to evaluate how your decision impacts your personal or professional goals and explore ways to mitigate these impacts. This can be anything from transitioning to a WFH job to investing in a long-term savings plan that will hold you over until you return to work.
Knowing what to expect (and being okay with it!) will help you decide what’s best for you and your family when the time comes.
#3 Open A Spousal IRA
A Spousal IRA is an easy way to build your retirement nest egg if you don’t earn an income.
You can get started with one if you’re legally married, file a joint tax return, and your spouse makes more than what they contribute. Discuss the process with your spouse and regularly adjust your contributions to maximize your earning potential. If your employer makes a matching contribution, ensure your spouse takes advantage of this opportunity.
With the right planning, you’ll be well on your way to a comfortable retirement.
#4 Have A Plan To Re-Enter The Workforce
In most cases, staying at home with the kids is temporary.
Having a game plan for re-entering the workforce is the best way to ease back into your old routine. Don’t wait until the last minute to do this. Keep learning new skills, stay in touch with your network, and consider part-time work to stay aware of what’s happening in your industry.
By doing this, you’ll prepare for a smooth transition into the workforce when you’re ready.
#5 Consider Working From Home
Work-from-home jobs can help you make some income without sacrificing valuable time with your family.
From freelance teaching to selling things on Etsy, there are many flexible ways to make money from the comfort of your own home. Many stay-at-home parents do this and end up doing really well for themselves. Who knows, this could be the opening you’ve been looking for to start a new venture and become your own boss!
The Bottom Line
Money gives you the power to achieve your financial goals while spending time with those you love.
It might be hard to adapt to at first, but there’s no reason why you can’t take care of your family and build a financial nest egg, too!
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