Are you contemplating to be a stay-at-home dad (SAHD)? Can you afford it? Before you jump over, let’s look at the monetary criteria you must fulfil for a fruitful transition to a SAHD.
Being a SAHD is not a honeymoon, nor a part-time job and you can’t wake up any time you like. SAHD is not a job for every man. Remember when you were a kid, how your mom job as a housewife? That’s right. You are the male equivalent, the househusband.
But, more men want to be a SAHD. Why? Few key reasons:
- To take an active part in the children’s upbringing.
- Comfortable raising children
- Not able to find work after accepting a VSS, economic challenges
- Spouse wants to seek a successful career and having kids.
Though the above are valid grounds to contemplate becoming a SAHD, they are not strong enough to sustain for a long period. For a successful SAHD, you need:
Spouse’ genuine approval + non-financial reasons + affordability
Foremost, your wife must agree to such an arrangement. Get her opinion. She has to like to work outside her home, out from her own staunch belief in advancing her career. You don’t push or tweak her arms. She should want it more than you. If your spouse shows her doubt or flat out rejected your idea of SAHD, then stop there.
Next, you need to review the money considerations. Can you afford it? From two-income household to one, are your finances strong enough to sustain the new lifestyle?
Before you make that leap of faith, consider these financial questions (FQ). Any answer other than a firm “yes” suggests that you either KIV this SAHD or forget it. Nevertheless, the ultimate decision is in your hand.
Contents
FQ 1 – Have you discussed with your wife about the household finances?
Moving from two incomes to one is a major decision for a family. Have a discussion with your wife. Husband and wife must be in total agreement about the family finances.
Talk about how you want to live and the changes you need to make to strengthen your new lifestyle.
Get all your income, investments, expenses, and debt in. Make sure you are ready to change to your new lifestyle with the approval of your wife.
FQ 2 – Does your wife’s job benefit the family more than your job?
If your better half is the higher-earning parent, it is more worthwhile for her to keep on working.
Aside from salary. it is also worthwhile to see what other benefits come from your respective employments.
FQ 3 – Is there a budget and monitoring of your expenses?
To control your money and to know your readiness to SAHD, you will need to know your:
- Current income and how much (at least the minimum) you need to earn to cover some loss of your income.
- Current expenses and what needs cutting back.
- How much you need for an emergency fund.
Monitor every cent you spend in a month. After a few months, you can get a sense of what earnings you must-have for a viable SAHD. And what you must change to remain living within your means in your new lifestyle.
FQ 4 – Do you have an emergency fund to cover 6 months of household expenses?
You’re not prepared to be a SAHD if you don’t have an emergency fund to rely on. Unfortunate events could happen. So, get prepared in particular if your family planned for only one breadwinner.
How much to save? At least to cover 6 months of living expenses. An Emergency Fund is a must-have. It can save you a great deal of money if you need it.
FQ 5 – Is your debt to income ratio low?
You may not be a one-income family if you carry an unacceptable amount of debt. If you want to be a SAHD, reduce your debt now to minimize your annual living costs once you have one income.
You can either pay off your lowest debts first or on debt that attract the highest interest.
FQ 6 – Can you continue to save for retirement?
Working or not, you must save for your golden years. You will always have to have money to live on when you’re older.
Take this into account in your monthly cost of living and find ways to save. If you become a SAHD but not able to save for retirement, then you are not financially ready.
FQ 7 – Do you plan to have a side income?
Though stay at home dad is a full-time job, probably, you still have some free time. You might as well use the time to earn some side income to help on the monthly budget. There are plenty on hand of work from home job that you can do to generate income. Just figure out your thing and your area of expertise. This will help lessen the burden on your wife and provide some financial cushion to fall back on. It also boosts your ego as a man as it shows you can help the family finances.
FQ 8 – Have you stashed away a sufficient nest egg?
Additional to your emergency fund, saved sufficient money that could sustain you for at least 2 to 4 years with no income coming in. It is risky for the family to have only one income from a single breadwinner. We cannot foresee what could happen. An economic downturn can occur without notice. A one income family could become a no income family.
Save whatever money you can and invest it. In the interim, keep your lifestyle inflation in check so that your expenses won’t outrun your income. You could increase your nest egg by focusing on consistent saving and investing. This would be your safety net in case you slipped into some tough times.
FQ 9 – Have you factored in medical insurance?
Medical care cost is getting higher. It is becoming nearly impossible to afford full coverage. Many parents spend a considerable amount on healthcare. It is not simple to plan for. Particularly if the working spouse does not have benefits to conventional employer health insurance. Bring this up in your money talks with your wife. Look into ways to pay for it with only one income. When you lose coverage via an employer, the plan is probably more expensive under own coverage.
Conclusion
Could you be a SAHD without a firm “yes” to all these financial issues? Maybe. You may have no alternative since the situation in your life dictates it. Nonetheless, the more you can clear off these financial issues, the better the chance of success you have to become a SAHD.
You May Also Like
- Talking About Money with Your Spouse
- 7 Tips for a Happy Marriage When a Wife Becomes The Breadwinner
- 7 Steps to Successful Budget-Setting for Couples
- 6 Tips To Combine Your Finances As A Couple
- 4 Types of Income You Can and Should Have
Are you a SAHD or SAHM? Share with us your opinions in the comments below.
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