A few months ago, we asked you what money questions are on your mind. We received almost a thousand responses and one topic that came up again and again was the financial difficulties of being a stay-at-home parent. Today we turn to public accountant Ariel Lafond to help answer a reader’s question about how to maintain security and independence as a non-income spouse…
CoJ Reader: I’ve been a stay-at-home mom for eight years, since my first child was born. I made this decision; My husband has always supported me 100% in any decision I make in this regard. While this setup still feels better for our family, I am now completely dependent on his income and have no idea what I would do if something happened to him. I don’t like this feeling, but I’m not sure how to avoid it. I’m the primary parent: responsible for taking the kids to school, taking care of them when they’re sick, taking care of sports practices, homework, and playdates, and carrying the bulk of the housework and mental load. Those things don’t leave me with much bandwidth for a job that would earn more than “fun money.” Did I make the wrong call? Aid!
Ariel: Actually, there is no “wrong” call here. For many families, and for many reasons, it makes sense for one parent to stay home. Depending on what each person earns, it is usually the most profitable route. But you do have to play the long game, which often means considering uncomfortable “what if” scenarios. In an ideal world, all parents-to-be would discuss these details before children come into the picture. Actually, no one wants to talk about those things!
In other words, you are not (at all) alone. Many stay-at-home parents find these worries creeping up on them several years later. The same goes for many working spouses: this is a family issue and both partners need to be involved. When couples come to me for advice, here’s where I tell them to start:
Step one: chat. Both partners, working or not, must have a clear idea of the family economy. If you don’t, there’s no need to approach it in a panic (even if that’s what you feel). Instead, try leading with curiosity. It’s tax season; There’s no better time to say, “Hey, how did we do last year? I’d really like to have a better idea of things.” Simply knowing what you have together is a great first step. Be honest about your concerns: “I want to be more involved. Some people lose their spouses and aren’t prepared. I want us to feel safe.” Conversations about money can be stressful, but they are a part of life and marriage. Approach with a team attitude, because that’s what you are: a team working toward the same goals.
Step Two: Have a checking and savings account in your name only. If you are the non-income partner, or plan to be, you should also plan to have some money in an account that only you have access to. There are many reasons for this, because there are many ways that money, even in a shared account, can become temporarily inaccessible. It’s not necessary to explore every possible scenario (medical incapacitation, shipwrecks on desert islands… are you terrified yet?). Just make sure you can pay the bills if something happens to the person whose name appears on the paychecks. You will both sleep better!
Step Three: Create full visibility and a routine to maintain it. In that sense, make sure you know as to pay the bills. Many people tell me that they don’t really know how to pay their mortgage or rent. Both partners should have a clear idea of the family’s daily expenses and income. I suggest a monthly meeting, just to see bank statements, invoices, etc. Learn about logins and what each account pays for. Make sure you understand your partner’s salary, as well as any changes that may arise on that front. At the risk of stating the obvious: just because you are the non-earning partner right now doesn’t mean you have no responsibility when it comes to family finances. Do not abdicate that position.
Fourth Step: Have life insurance and/or disability insurance. This is another scary task that no one wants to deal with, but having life and/or disability insurance is absolutely necessary. Ideally, there would be a policy for both the earning and non-earning spouse (families often need urgent child care after the death or injury of the primary parent), but everyone’s situation is different. If you can’t afford to insure both partners, I would typically suggest giving priority to the earning spouse. Many employers offer life insurance, but not all policies are created equal. Read the fine print and consider whether or not you need to take out an additional policy to ensure you are truly covered. Again, not anyone’s favorite task, but trust me, you’ll breathe MUCH easier once it’s done!
Step Five: Have a retirement plan (for yourself!). It’s easy to forget about saving for retirement once you stop working, but the good news is that it’s also easy to start over and it’s a great financial step for the whole family (team spirit, right?). Spousal IRAs allow the working partner to contribute to the non-working partner’s retirement account. I know the idea of your spouse “paying you” may be uncomfortable for some. But contributing to your retirement account means more tax-free dollars in the family fund. And if the end goal is a comfortable retirement together, this really is a win all the way around.
Finally, if I had to suggest an optional Step Six, it would be this: Don’t rule out “fun money” work. It’s not so much about the revenue, but the potential value of keeping a foot in the door. And by the way, you may not even have the bandwidth to that right now, and if so, that’s completely valid. Let’s face it: the full-time father often has a harder job than the working one, especially during certain stages of parenthood. But if you have the energy and inclination to participate in the working world in some way (whether maintaining a credential, taking on a short-term project, or simply grabbing coffee with a former colleague), it could reinforce the sense of independence you’re missing. Plus, it will be one less barrier to entry, should you one day decide to start working full-time outside the home again.
It doesn’t mean you have to or that you won’t have other opportunities in the future. This is just another option to consider. That’s the main takeaway from all this advice: you have options. You didn’t make the wrong decision: you made to call. And now you can earn more.
Ariel Lafond is a certified public accountant, fractional chief financial officer, and tax planning expert, advising both businesses and individuals on financial growth. She also writes the newsletter. rich foolsharing tips and explanations on everything related to finances. She lives in New York with her husband and their rescue puppy, Lucy.
Thank you so much, ariel! Do you have a money question you would like help with? Please let us know in the comments.
PS: The 30-second habit that helped me stick to my budget. Do you talk to your coworkers about your salary?
(Photo by Alina Hvostikova/Stocksy.)
