Dual income families definitely have the financial stability that families with one income don’t necessarily have. This isn’t to say that one is better or easier than the other, it’s better to look at them as two different financial budgeting lifestyles. Here are some tips for stay at home parents:
- Make a plan-
Make sure everyone in the household is on the same page as to what having someone work from home will look like. Communication is key
- Set up a budget-
Look at how your current 2 person budget will change with the subtraction of part of that income. See how this will effect your budget with things like full time childcare not being needed, or paying less taxes in a lower bracket, or being able to eliminate some other expenses that won’t be needed with one person at home full time.
- Make sure you have the correct insurance-
Make sure the individual working full time is carrying adequate life insurance. In the case of death of the main earner, you want to be able to sufficiently cover expenses to avoid a financial catastrophe. If the stay at home individual has young children; consider carrying life insurance to cover the significant financial impact of loosing those services covered by the stay at home individual.
- Plan for retirement-
Consider setting up an IRA and making regular contributions. An IRA allows you to set aside money for retirement that is either tax free or tax deferred depending on what type you are contributing to.
For more information on financial advice for stay at home parents, please view the article here.