The long-term effects of being a stay at home parent

The long-term effects of being a stay at home parent


Reading Working Mother’s article about stay at home parents weighed on me heavily. Take a few minutes to read the article and the American Progress article well. Both articles state, that “childcare is expensive, but quitting a job to avoid that expense doesn’t make childcare free (1).” So true, I thought, so I continued to read it through to the end and I clicked on the links to read the subsequent articles as well. My total income loss from the calculator was larger than I expected, $1,122, 669.

Wow, at the end of my reading those numbers there was a lump in my throat that wouldn’t go away. What is this article saying about me and my current situation. Eight years ago, I quit my full-time job to become a stay-at-home-mom. I primarily made my decision based on my daughter’s healthcare needs, I honestly didn’t feel like I had many options. Could I really trust childcare providers to be attentive and knowledgeable enough to make sure she was fully taken care of while she was in a room full of other kids. A pain in my heart has continually told me, “No.”

Although, me giving-up my full-time salary hasn’t had a big impact on our quality of life. I feel like I contribute less to the overall finances in my home. In past posts, I’ve shared how we started living on one income before I had kids so I could pay off all my debts. I succeeded so the transition wasn’t a huge sacrifice at first. Even though I put aside a year’s worth of my income I realized they my financial losses were still tremendous. Mainly because my retirement savings suffered greatly.

If anything, the Working Mother article is a wake-up call to mothers and fathers who have decided to stay home to care for their children. At different times in a person’s stay at home journey he or she may need to reevaluate their financial choices better. Frankly, I agree with the premise of the article which states, “The financial penalty [of choosing to leave the workforce and become a stay at home parent] can exceed annual child care cost. Parents who interrupt their retirement savings and social security benefits when they return to the workforce and those effects also reduce retirement savings and social security benefits.” For many families in the U.S. choosing whether or not to work is more than just saying, I will forego childcare and be the sole childcare provider for the children. Frankly, it’s true that the cost of childcare exceeds median income rates, and the US is 17th in female labor force participation (2). Feeling forced to stay at home because a person cannot afford adequate childcare happens and when it does it isn’t optional for some families.

For us moms and dads who believe in investing in our children by staying at home with them, here are a few tips we can follow that will lead to better long-term outcomes financially.

The long-term effects of being a stay at home parent

1. Find creative ways to fund your retirement accounts. Work part-time. (Work from home, freelance, consult, tutor, etc.)

  1. Maintain skill set, education, certifications. Get an advanced degree. For a small certification that has guaranteed dividends.
  2. Find creative ways to fund your retirement accounts.
  3. Plan ahead (ideally it would be great to have an employer who allows parents to have a flexible work schedule.)
  4. Save (gifts, allowances, bonuses, etc) then invest that money to increase your dividends later.
  5. Marry rich (lol, I’m joking). Marry because you’re in love and committed to each other for a lifetime. However, it’s important to help your spouse reach his or her earning potential. Help build up your spouse so he or she is confident and able to succeed) 

When considering becoming a stay at home parent consider:

  • The opportunity costs involved, which are a person’s potential income and lost of retirement wages.
  • How you will remain competitive, so when you return to the workforce, you won’t earn less.
  • Consider petitioning your congress men and women so the policy makers will understand the real world.

Overall, I’m thankful that I’m able to spend quality time with my kids. Going forward however, I will think strategically about my financial future and retirement.

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(1) Kingo, Audrey Goodson. “This Calculator Tells You Exactly How Much Money You Lose When You Stay Home With Your Kids”. Working Mother. N.p., 2017. Web. 30 June 2017.

(2) Madowitz, Michael, Alex Rowell, and Katie Hamm. “Calculating The Hidden Cost Of Interrupting A Career For Child Care – Center For American Progress”. Center for American Progress. N.p., 2017. Web. 30 June 2017.

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