The 3 Underrated Financial Benefits of Stay-at-Home Parenting

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Being a stay-at-home parent could actually do some good things for your household finances. Read on to learn more. [[{“value”:”

The decision to become a stay-at-home parent isn’t an easy one. Not only might it mean giving up a career you’ve worked hard to build, but it might also mean losing a nice paycheck. That could leave you having to budget carefully to make ends meet.

That said, there are certain financial benefits to being a stay-at-home parent. Here are some you should recognize if you’re not sure whether taking a career break is the right choice for you.

1. Not spending money on child care

In 2023, the average cost of a week of infant daycare was $321 for a single child, says Care.com. For toddler care, the average weekly cost of daycare was $293 for one child and $556 for two children needing full-day care.

As a stay-at-home parent, you won’t have to pay those exorbitant fees and can keep that money in your bank account for other expenses. In fact, if you run the numbers, you may find that if you’re a moderate earner, your salary would be effectively wiped out by the cost of daycare.

Now, if it’s your job that provides health insurance for your family, that could be reason enough to consider keeping it. But if you have a spouse or partner who will remain employed and whose job provides health insurance, then you may come to the conclusion that working doesn’t make financial sense due to the cost of child care these days.

2. Having more time to bargain-hunt

As a working parent juggling a professional and home life, you might have very limited time to shop for groceries or household items. But as a stay-at-home parent, you might have more time to hit the stores during the week — and doing so might even serve as a way to get your toddler out of the house for a bit. That extra time could really work to your financial benefit, though.

Let’s say your schedule is such that you have time for an errand or two every day. If your family’s favorite cereal is on sale at one supermarket in your neighborhood, and kids’ underwear, which you need to load up on for your newly potty-trained toddler, is on sale at a big-box store across town, you may have time to take advantage of both deals. As a working parent, you might only have time to hit one of those stores, thereby losing out on one discount.

Plus, if your children nap during the day, you might have more time to research deals online and score better prices. You might also have more time to organize things like coupons so they don’t go to waste.

3. Potential tax savings

The loss of your income may be something your family has to adjust to. But one perk of being a stay-at-home parent may be that your family gets bumped into a lower tax bracket. This means you’ll pay a lower rate of tax on your highest dollars of earnings.

As an example, let’s say that at the start of 2024, you were earning $60,000 and your spouse was earning $90,000 for a total household income of $150,000. Let’s say you then had a baby in February and left the workforce. Now, your household income is down to $90,000. But that also means you’ve gone from the 22% tax bracket to the 12% bracket, so you’ll only pay a rate of 12% on your highest dollars of income.

The decision to become a stay-at-home parent, whether for a year, several years, or indefinitely, is certainly a hard one to make, and there are some financial pros and cons to consider. But make sure to keep these perks on your radar when making your choice.

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