Becoming a Stay At Home Mom - #1

Whether to continue employment after having children is a decision that rests between a woman and her husband. A wise woman will give herself the choice.

You're an employed mom, and you've had enough of being stretched too thin. Meeting the demands of an employer AND a family is no longer your heart's desire. You've gotten used to the two-income lifestyle and you're worried that you HAVE to keep working. Deep down, what you REALLY want is to be at home with your children while they are still small. Is it even possible?

This has often been asked and I've wanted to write about it for years. I've made the transition now in both directions at least once. What worked for me might not work for everyone, but I've found that each of us can usually do whatever we WANT to do.

ASSUMPTIONS:

I have to make a few assumptions about your family make-up before delving into the details. First off, I'll assume you are in a committed marriage or rock-solid, stable relationship with your child's father. Second, I'll assume your spouse is earning as much or more than you are, or at least enough to support a family. I'll get to the details on that later.

STEP 1 - PLAN:

In a perfect world, you would know if you wanted to be an employed mom or a Stay At Home Mom (SAHM) before you got married, or at least before you decided to have children.  You would live on one income from the beginning.  Your housing choices, grocery budget and personal spending would be based on your husband's income.  Your income could be saved to make the down payment on a house, replace a vehicle or take a vacation.

If you're not in that perfect world, it's not too late!  You can begin with planning the moment you decide that you really want to stay home. 

1. Where Does The Money Go?  Before you can manage your money, you have to know how much you earn and where you spend it. This can be done on a sheet of paper, a spreadsheet, or a money management software program like Quicken or MS Money. Decide together how you want to categorize your spending.  Auto, Home, Utilities, Groceries, Medical, Property Taxes and Debts are all things that must be paid every month.  Dining Out, Entertainment, Club Memberships and Subscription Services are examples of optional expenditures that are easily reduced to bring your spending in line with your income.
2. Develop a Budget.  Now that you know how much money is coming in and how much is going out, it's time to figure out how to balance the expenses with ONE income instead of TWO.  This probably won't happen overnight and it may take several weeks to come up with a plan, but work on it a little each week and it will begin to take shape. 
3. Cut Spending.  Don't be afraid to make changes if you see that your spending doesn't match your budget.  There are ways to trim nearly every category of your budget!  What are your largest expenditures each month?  Can these be reduced?  Don't be afraid to make radical changes if they allow you to meet your goal.  If your mortgage payment is killing your budget, consider downsizing to something more affordable.  If your car payment is too high, trade for a more economical used vehicle.  The money you save can be used for an extended warranty if that's important to you.  You can find ways to reduce everything from your grocery bill to your utility bills.  If you're having a hard time with self-discipline, give yourself a cash allowance each pay day, knowing that when it's gone, you have to wait until the next pay day to get more.  Pack a lunch, brew your own coffee, cut out services you don't really use or can live without.  You'll be amazed at how the little things can quickly add up.
4. Reduce Debt!  Depending on your current debt load, this process may be quick and painless, or it may take considerable time.  Regardless of your current situation, resolve to pay off all debts other than your mortgage if you have one.  I can discuss this in greater detail in the future, but here are the basics:  (1) STOP getting IN debt.  Yes, that sounds simple, but sometimes it's easier to just swipe that credit card!  You know if you have the discipline to pay your bill in full each month.  If you don't, then put those cards away in your lock box and use them only in a dire emergency.  (2) Take the debt with the smallest monthly payment and increase that payment by as much as you can afford.  If you can double or triple the payment, do it.  If all you can spare is an extra $5, do it.  Decide on a reasonable reward for paying off that first debt and celebrate your success!  (3) Once the first debt is paid off, take the entire amount you were using to pay that bill each month and ADD it to the next smallest debt. Repeat the process until you are left with only a mortgage.  If you don't own a home yet, you'll be able to save the down payment quickly by being debt-free, and you'll be in a much better financial position when you decide to buy.  If your budget allows for a car loan, you can still pay that vehicle off and then save the money for the next vehicle.  You'll be paying YOURSELF instead of the bank!

That should be plenty to get you started on the path to the lifestyle you seek. I have much to write on this subject. Check back for new posts!