Money Talks, So Should You

Q&A: Can I afford to be a stay-at-home parent?

Deborah Frazier
by Deborah Frazier, NAPFA

The most important part of this question is personal. Once that is taken care of, we tackle the financial aspect. Being a stay-at-home parent is a big commitment, and you need to begin your planning the minute you know you want to have a baby.

For some parents, the financial answer is simply, “No, we can’t afford it." Conversely, some people feel completely comfortable living on a single income. It is the people in the middle that I will address here.

READ: 4 questions to ask about maternity leave

You have to begin with some homework. List all of your expenses. Don’t leave out hair, nails, movies and other expenses that you might pay for with cash. Put them all down; this plan won’t work if you leave out expenses.

Next, add possible baby expenses. This takes some guess work, but there are plenty of websites ( is a good one) to help you estimate costs. One baby expense to be sure to consider is the cost of day care or a nanny, which will come into play later in our calculations.

Once you have this list in front of you, imagine what expenses will be cut if you are a stay-at-home mom. Likely candidates are: 

  • Work clothes
  • Dinners out
  • Gas or cabs to work
  • Lunches out at work

You will also have time (maybe) to shop for the best bargains and sales. 

Finally, get your pay stub out. Do not look at the gross amount; look at what gets deposited into your bank account. This is what you will be living without. Next, subtract daycare costs from that. That amount is what you will have available if you go back to work. This is the magic number in comparing your options because this is the real amount you would be earning if you return to work. Ideally, this is the number you are shooting for in cutting expenses.  

READ: Crisis Button: We're having an (unexpected) baby!

The final step is to begin to cut down on expenses and save the magic monthly number for use when you are no longer working and may need extra money. If you do not have any money left at the end of the month, you may fall into that category of having to go back to work.

Alternative ideas would be to find a way to earn money at home. Maybe you know someone that is having a baby or already has one that would like to have you care for him or her. I think many parents would love the idea of their child in a home with only one other baby.

Good luck and do your homework. If you do decide to stay at home, save, save, save!

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Deborah Frazier has been a fee-only financial adviser since 1986. Frazier is a member of the National Association of Personal Finance Advisors (NAPFA), a fee-only professional association and a Dimespring knowledge partner.