If you’re a new parent, or soon to be one, you’re probably wondering about when to return to the workforce. For a lot of parents, going back to work is out of the question. You’d much rather spend time bonding with your little one than sitting at a desk all day — even if it’s just for the first couple of years. For some parents, the cost of childcare is also out of the picture, and the more financially viable option is to stay at home until the child is old enough for school.
Without earning a regular wage, however, stay at home parents can quickly feel a strain on their bank account. To help you out, take a look at this article containing tips on the things you should do to protect your current and future financial status.
Have a plan
If you’re yet to have your new baby, but you know for sure that you won’t be returning to work after their arrival, create a plan. If you have a partner who works, devise a strategy that will prepare you for the financial changes yet to come. For instance, if your husband is going to return to work while you stay at home, or vice versa, try living on just one of your incomes for a month or so before the baby is born.
Doing this will help you get accustomed to living on less money, and be able to see if it’s do-able. If you find that you both struggle to live on this amount, it gives you the chance to create a plan on how much money you’ll need to budget and identify ways to boost your income.
Your financial plan may span even further than this, and you could be thinking way into the future. You could end up never returning to work and find you want to be a stay at home parent full-time, which means that you need to get serious about creating a retirement fund. One of the best ways to strengthen your financial future is investing, particularly with buy to let property. Owning a buy to let property will allow you to boost your monthly income along with the ability to generate an attractive amount of money later in life through capital appreciation. If you’re considering making a property investment, take a look at the ultimate property investment guide from RW Invest, containing tips on every element of a beginners investment journey.
When you have less money going into your account each month, budgeting becomes a necessity. Get serious about creating strict and detailed budgets, breaking your expenses up into different categories. If you’re not familiar with the 50/30/20 method of budgeting, you should definitely look into this. This method splits your outgoings into different categories — needs, wants, and savings.
Fifty per cent of your income should go on needs, which will mean housing costs, insurance, utilities, food, car costs, and baby essentials like nappies. Thirty per cent can then go on wants, like the occasional treat and non-essential item, and then twenty per cent will go towards your savings. Work out whether it’s going to be realistic for you to use this method. If not, you can always adjust it according to your available income, and seek out any ways to cut costs, such as shopping at a more affordable supermarket or sacrificing any subscriptions you have like Spotify or Netflix.
Consider working from home
If you’re really struggling to make ends meet, then picking up a remote job is a good idea. With this, you’ll be able to stay at home with your child while still making money, and you might be surprised at the amount you could make. Many stay at home parents choose to take on freelance positions to help pay the bills, and some find success through starting their own blog. Parenting bloggers can make an attractive salary through monetizing their blog with things like sponsored posts, banner ads, and affiliate linking.
If this isn’t your cup of tea, there are lots of other ways you can earn money from home such as with online tutoring, freelance accounting, and marking exams or academic papers. Depending on your skillset, you’re bound to find a suitable option for you.
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