With rising child care costs, the choice to homeschool and the desire to spend more quality time with their children all key factors in their decisions, many parents are choosing to leave the workforce to become full-time parents.
In fact, around 25% of mothers identified as stay-at-home parents in a 2023 Motherly survey (and about one in five stay-at-home parents are dads, according to the Pew Research Center). This was a sharp uptick from previous years, though inflation and increased costs of living may be forcing parents back into the workforce sooner than they’d hoped.
While the decision to stay home with one’s children is not merely a financial one, finances play a huge role in a couple’s ability to make this choice, especially if they’re looking to make this change a long-term or even permanent one.
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The health of their finances now and what they may or may not be in the future are vital factors to consider if they want to make the right decision for their family.
Because this decision is not one to make lightly, it may be wise for couples to ask themselves a number of questions to help guide them through the decision-making process and give them greater confidence in their choice.
Here, five financial experts from Kiplinger Advisor Collective outline some of the most important questions you and your partner should ask before stepping into full-time parenting and the potential effects choosing to do so could have on your financial future.
How can we create passive income?
“As a couple, ask yourselves this question: ‘How can we create passive income to replace lost income and gain time freedom?’ This question changed everything for me. It shifts the focus from sacrifice to strategy. This way, you’re not just giving up a paycheck — you’re building a life where your money works for you and your family, and not the other way around.” — Justin Donald, Lifestyle Investor
Can we support our core value on one income?
“Before someone leaves the workforce to become a full-time parent, couples should ask: ‘Can we sustain our family’s core value — raising a happy, supported child — on one income?’ This matters because financial strain can undermine the goal of a nurturing home. Assessing expenses, savings and long-term goals ensures the decision aligns with their priority of family well-being over just making ends meet.” — Dr. Clemen Chiang, Spiking
Are we prepared for the ripple effects?
“A question people tend to overlook when considering leaving the workforce to become a full-time parent is, ‘Are we prepared for the ripple effects on our financial future?’ Yes, of course, focus on today’s lost income. However, it's also necessary to be conscious of possible reduced retirement savings, career stagnation and reentry challenges that may compound over time.” — Zain Jaffer, Zain Ventures
Will we still be able to save for the future?
“Ask, ‘Can we sustain our lifestyle on one income while saving for the future?’ This question ensures you assess your budget, emergency fund and long-term goals. Consider expenses, health care and retirement contributions. Planning ahead prevents financial strain and allows for a smoother transition, ensuring both immediate stability and future security for your family.” — Stephen Nalley, Black Briar Advisors
Do we have an emergency fund?
“‘Do we have an emergency fund to cover at least three to six months of expenses?’ is a key question to ask. Going down to one income increases financial risk. A strong emergency fund acts as a safety net for unexpected costs like medical bills, home repairs or job loss. Having this cushion ensures stability and reduces stress, making the transition to a single-income household smoother and more secure.” — Bob Chitrathorn, Wealth Planning By Bob Chitrathorn of Simplified Wealth Management
Related Content
- Five Things to Teach Your Kids about Money and Happiness
- Financial Advice I Would Give My Younger Self – Planning for a Young Family
- Are You Financially Ready to Have Children?
- Short-Term Financial Planning for First-Time Parents
The information provided here is not investment, tax or financial advice. You should consult with a licensed professional for advice concerning your specific situation.
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