Tips for Surviving Financially as a Stay at Home Parent

We all know the hardships there are out in the world financially every day and that there are thousands of articles, books, programs, and advisers to look at but what do you do when you are trying to survive off of one person’s income? Being a stay at home parent has many great benefits, but it can put a strain on finances quickly if not thought through beforehand. If you are thinking about being a stay at home parent or already are one, this information may help get you on the right track, financially.

You might already have a plan, want to improve your plan, or have no plan at all and are just looking for some tips to start a plan. After reading the article “Money tips for stay at home moms,” by Sharon Epperson (2007), I was thinking about looking at what I myself can do to change my ways, financially, as a stay at home mom.

One great idea for those of you thinking about a becoming a stay at home parent is the “Dry run,” as Epperson called it. This is where both parents would keep working for three months, surviving off of one spouse’s income; your paycheck would then go into savings. Next, start up a financial plan and review it frequently together. Doing the financial planning together helps with communication and in a marriage communication regarding finances is key.

Some of the tips Sharon Epperson (2007) gave in the article were great and I will be starting to follow them as soon as I am done reviewing this article. Here are some of the helpful tips they gave in the article:

• ·         Set a budget
• ·         Make sure to set aside fun money in a separate account
• ·         Continue to save for your retirement
• ·         Making sure you are adequately insured
• ·         Staying connected with those professional contacts

Another thing I took away from this article was the thing Epperson (2007) called the “60 percent solution”. Here is a breakdown of it from the article:

— 60% of the gross income goes to committed expenses (all taxes, including taxes withheld from pay, mortgage, utilities, car loans, credit card debts, etc.)

— 10% to short-term/emergency savings (goal: to cover three to six months of living expenses)

— 20% to long-term/retirement savings (including 401(k)s, IRAs, college savings plans)

— 10% for “fun money” (spend it on anything you want)

There are other articles out there that have similar plans, but the one thing I liked about this one was the fact that you can take out the fun money and as a stay at home parent this means you make time to pamper yourself. Being a stay at home parent is hard and exhausting but these tips can hopefully help you to take off at least the big stresses of finances. Just make a plan and make sure to stick to it and you and your family will make it just fine. I hope that these tips maybe help you as much as they helped me and my family.

CNBC TODAY