Don’t Make These 3 Financial Mistakes as a Stay-at-Home Parent

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Taking a career break to raise children? Read on for some major pitfalls to avoid. [[{“value”:”

Whether it’s your first child, your second, or your fifth, at some point in your life, you might make the decision to become a stay-at-home parent. And in some cases, the cost of child care might drive you to take a career break. Care.com puts the average weekly cost of infant daycare at $321. For a toddler, it’s not much less painful at $293.

If you have multiple children needing daycare, the cost alone might wipe out much or all of your salary. So staying home with your kids could actually end up being a wise personal finance decision. At the same time, though, make sure to avoid these mistakes as a stay-at-home parent.

1. Not readjusting your budget to account for a loss of income

If you used to work and are now a stay-at-home parent, the loss of your paycheck might constitute a blow to your family’s finances. So it’s really important to get onto a new budget that accounts for that lower income.

Start by making a list of your essential expenses, such as rent, groceries, and healthcare. Then add in expenses that may not be quite as essential but are pretty important to your quality of life, like having access to streaming content when you need some at-home entertainment.

Compare your spending to your household’s current income and make sure the numbers line up. If not, you may need to think about cutting some non-essential spending or seeing if it’s possible to find a part-time side hustle you can do from home, like social media account management or data entry.

2. Assuming you don’t need life insurance because you’re a stay-at-home parent

You may not be earning an income as a stay-at-home parent. And because of that, you might assume there’s no need to purchase life insurance. But remember, even if you’re not adding to your family’s bank account, you’re still providing an essential service — child care. And if something were to happen to you, it may be that your kids’ surviving parent would struggle to cover the cost of child care on their own.

That could be a very difficult thing. So do consider putting life insurance in place, even if it’s a modest term life policy (say, a 10-year policy that gets you through to the period when your children are in school and are old enough to stay home alone before and after school).

3. Letting professional licenses expire

You may be a stay-at-home parent now, while your kids are young. But once they’re old enough to attend school and you won’t be looking at spending your entire salary on daycare, you may want to go back to work. You don’t want to take that option off the table by letting professional licenses you hold expire.

Make a list of your various licenses or certifications and figure out what’s required to keep them. If it’s a certain number of continuing education hours or credits, see if it’s possible to fulfill that requirement online when you have the time. And if you do need to attend the occasional in-person seminar or course to keep your licenses, see if you can swap favors with a fellow stay-at-home parent where you watch their kids for a day and they do the same for you.

As a stay-at-home parent, your priority may be your children’s well-being. But don’t let these financial matters fall by the wayside, as they could end up making life difficult for you and your family on a whole.

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