Congratulations on your new bundle of joy! There’s nothing quite like bringing a little one into the world. With endless cuddles, first smiles, and all those baby milestones, you’ll want to devote as much time as possible to your newborn. So, if the idea of returning to work after 12 weeks fills you with dread, you might be wondering how to afford being a stay at home mom.
The high cost of childcare means it’s not always worth it to go back to work full-time and pay for daycare too. Especially if you have twins or two under two!
Childcare costs have increased by 41% for center-based daycare, and families are now spending an average of $14,117 annually.
Giving up a full-time salary can be tough though - there’s a lot to consider. This guide will help you crunch the numbers so you can answer your burning question "Can I afford to be a stay at home mom," and show you how to chop unnecessary expenses from your budget, so you can be with your kids 24/7.
How to afford being a stay at home mom
Stay at home parent rates have increased across 46 states. US Census Bureau reveals a 60% increase since 2019 in one parent staying at home to provide childcare.
Mississippi topped the list of states, with 6.5% of households including a stay at home parent. At the other end of the scale, the lowest proportion of stay at home parents is in Iowa.
If the idea of giving up your full-time job to stay at home sounds appealing, planning your finances should be a priority. Let’s take a deep dive into some calculations so you can prepare to become a stay at home mom.
Calculate your baseline spendingbefore becoming a stay at home mom
Your first job is to gather your bank statements and look through the last few months of spending. Note down your recurring payments so you know exactly how much you spend on categories like:
- Rent or mortgage
- Utility bills
- Insurance
- Transportation
- Groceries
- Subscriptions like Netflix
- Phone and cable
- Clothes
- Eating out or dining in
- Entertainment
- Exercise
Even writing these expenses down is an opportunity to take an honest look at your budget and work out where you could make cutbacks. Could you take up running or exercise at home instead of paying for that expensive gym membership?
You can also shop around to reduce your monthly payments in areas like your insurance, utility bills, and mobile phone tariffs. If you reduce these bills by $10 a month each, these can quickly add up to greater savings.
Calculate how to afford being a stay at home mom by NOT working
The next step of how to afford being a stay at home mom is to work out how much money you’ll spend by giving up work. Because yup, actually going to work can be expensive too. Work out how much you typically spend on:
- Commuting (gas, public transport)
- Eating out (lunch or breakfast)
- Coffees on-the-go
- After-work drinks
- Miscellaneous expenses like collections for colleague birthdays
Don’t forget to add in the estimated cost of childcare if you decide to go back to work. Find out the rates of at least three daycare providers or nannies in your local area and take an average.
Prepare for unexpected expenses
Once you’ve crunched the numbers, you need to figure out if your partner’s salary can cover your baseline spending with room left to spare. This part is crucial because unexpected expenses do happen, so consider how you will afford an emergency payment like:
- Car repairs
- A hole in your roof
- Replacing a broken TV
We would always recommend building an emergency fund with at least 3-6 months saved to cover your core necessities like food, rent, transport, and utilities.
If you’ve already created this pot before dropping to one salary, you’ll have an excellent safety net if life hits you with anything crazy.
Consider the impact of being a stay at home mom on your health insurance
Medical cover is a huge concern for families - we all want the reassurance that we can afford healthcare if our children need it.
Before dropping to one salary, check if you receive healthcare through your partner’s employer and what it covers. Remember that the cost of your healthcare may increase with every child you add to the policy.
Calculate if you have enough money for savings
The paycheck to paycheck scenario is typical in young families, especially as you factor in new costs to your budget like diapers, baby formula, baby clothes, and endless toys and birthdays.
If you’re living on a single salary, setting aside money for the future can be challenging as a single mom. But by committing to a budget, you can pay yourself first by contributing to a regular savings plan. Your newborn may seem small right now, but it’s never too early to start saving for college!
You may have heard that 10% of your salary should go to savings, but 20% would give you a better cushion. Don’t forget to add this calculation to your stay at home mom budget.
Planning ahead to afford being a stay at home mom
Ideally, you’ll be asking the question, “How can I afford to be a stay at home mom?” during your pregnancy, so you’ll have plenty of time to prepare.
But…. sometimes plans change. And that’s okay. Many moms go back to work after their crazy-short maternity leave and decide they don’t want to be there anymore.
Remember it’s never too late to change your mind. So, if this is you, work through your budget quickly and make cutbacks to understand your numbers and make a solid plan.
Save during your pregnancy
The time when you’re still receiving a full salary is the right time to:
- Cut back on your expenses
- Practice living on a single budget
- Put your salary into a savings account
Some of your savings will need to go towards those big-ticket items for your baby, like a stroller, crib, baby monitor, and car seat. Saving money ahead of time is how to afford to be a stay at home mom once your baby arrives!
Evaluate your living arrangements
Having a baby is life-changing, and you may feel that the home you’ve been living in isn’t the most child-friendly. When you’re young, free, and single, it makes sense to live in the center of downtown, surrounded by friends and the buzz of city life.
But do you need to live in that expensive city apartment as a stay at home mom with a newborn? You can often save a bucket of money on your rent or mortgage by moving out to a smaller town.
You’ll be rewarded with heaps more living space too.Minimizing your living space is another way how to afford to be a stay at home mom.
Plan your mom budget
When you're deciding how to afford to be a stay at home mom, a budget can make or break your decision. Without one, it’s easy to spiral into debt by spending on credit cards and taking out loans.
There are many different budgeting styles to choose from, including:
- Cash envelope system
- Percentage breakout method
- Reverse budgeting method
- Zero-based budget
The main thing is to pick a budgeting method that works best for you and your family!
Be prepared to cut back on your spending
You may find that your lifestyle changes naturally once you have a baby. But it's understandable that you're concerned about how to afford being a stay at home mom. The great news is it's easy to make some frugal adjustments like:
- Stop eating out in restaurants
- Cook fresh meals instead of ordering takeaways
- Buy second-hand clothes
- Look for bargains on eBay or Facebook Marketplace
- Don’t update your iPhone when the new model is released
- Keep your current car for a few more years
Learning ways to be frugal is how to become a stay at home mom while being financially savvy!
5 Ways to earn money as a stay at home mom
If you’re nervous about your vanishing full-time salary, remember that being at home doesn’t need to put a stop to your earnings. There are plenty of stay at home moms who have turned a successful side hustle into a roaring business.
And the benefits aren’t just financial! It can be super rewarding for moms to invest time and energy into a passion project that goes beyond singing nursery rhymes and wiping sniffles away!
Looking for inspiration on how to earn money while you become a stay at home mom? How about some of these work from home ideas?
1. Blogging/affiliate marketing
Starting a blog is an ideal way to make extra cash as a stay at home mom, with minimal start-up costs. You’ll just pay for a domain name and hosting, which usually runs between $50-100 for the year.
To get started, choose a niche to blog about - perhaps related to your former work, a personal hobby, or stay at home mom tips. The key is to write regularly and engage with your audience by responding to comments.
Are you wondering how this makes any money? Bloggers usually make cash through affiliate income. This means you recommend products on your site and take a percentage of the sale as a referral commission.
2. Setting up a daycare
If you're already at home caring for your child, why not open your doors and offer daycare for other families too? If you've been wondering how to afford being a stay at home mom, offering daycare can be incredibly rewarding.
And the benefits aren't just financial! You'll also get a thrill from supporting the growth of other children while providing plenty of playmates for your little one.
But opening a daycare is more complex than being a babysitter or a nanny. Before you start, you'll need a license, current CPR certification, a clean driving record, and various other documentation.
Insurance is a must-have, and you may decide to rent out a daycare space if your home isn't suitable. You might expect to pay $10,000 upwards to launch your business, but there are grants available for professional caregivers.
3. Virtual assistance
Being a virtual assistant can be a lucrative career, and fits in well with family life. If you have previous experience in admin or any aspect of running a business, you can offer a virtual assistant service to business owners and help to manage their emails, calendar, social media, bookkeeping, and more.
Start-up costs are low, which is always important if you are worried about being able to afford starting a business with little money. But you’ll need to promote your services to attract clients.
Some virtual assistants will set up their own website and use PPC or social media to drive traffic to it. Others might sign up with a virtual assistant agency to receive client work.
4. Freelancing
If you have existing skills you could leverage or are willing to learn some, freelancing is a flexible career that can grow alongside your family.
You only need a laptop and broadband connection to get started. As a freelancer, you might offer skills like content creation, graphic design, or web design.
Freelancers frequently find work on sites like Fiverr or Upwork, but the pay is low. You may choose to start here and then drive leads to your own personal portfolio website.
5. Transcription services
If you’re a fast typist with excellent listening skills, you can turn audio files into text. Lawyers require a written account of courtroom proceedings, while doctors might need audio from a medical conference transcribed into text.
Transcribers working from home are sent encrypted files to convert into meaningful text with accurate grammar and spelling. To get started, you can sign up with a transcription agency like Scribie where you may need to take a quick transcription test on application.
Worried you won’t find the time to take on work like this? The beauty of these jobs is they can all be done remotely at a time and pace that suits you.
Once you have your baby in a healthy sleep routine, you could work on your side hustle for two hours during a lunch-time nap, plus an hour or two in the early evening.
Final thoughts on how to afford being a stay at home mom
Now you’ve reached the end of our guide on how to afford being a stay at home mom, it’s time to make some decisions about your work and family balance. But remember that nothing’s permanent.
If you go back to work and don’t like it, you can always become a stay at home mom later on. Equally, if being at home permanently isn’t working out, that’s ok too. You might consider your partner being the stay at home parent while you return to work.
There are no rules, and everyone’s situation is different. So take your time in building the best plan for your family!
