Wednesday, April 8, 2009

Sometimes Staying At Home Pays

Saving Money Tip #114 - Sometimes Staying At Home Pays. If you are a Stay-At-Home Mom (SAHM), you may not realize that you are actually making an income even if you aren’t technically making one. Most of us have seen those emails passed around the Internet that show a SAHM’s salary to be over $100,000. While I do think that’s a bit exaggerated, SAHMs do save money in so many ways that we really do “make” money.

Figure out your real worth as a Stay-At-Home Mom. Start at $0. Then add in money you save per week or month by doing activities yourself that you couldn’t do if you worked. But be realistic about it. What expenses did you really have when you had a job that you don’t have now? If when you had a job, your family ate out 3 times per week at $20 per meal and now that you stay home you eat out only once per week for $20, then you have just “earned” $40 per week (minus the cost of cooking the meals instead). Let’s say when you worked you spent $25 per week in gas, and while at home you spend $5 per week on gas, you just earned $20 per week (plus the value of less wear and tear on your car). If you bought work clothes to the tune of $50 per month and now you spend $20 per month on clothes, you have just earned $30 per month. If you had a housekeeper clean your house for $150 per month when you worked and now you clean it yourself, you have just earned $150 per month. And let’s say you now mow the lawn instead of hiring a lawn maintenance person for $800 per year like you did when you worked. That’s $800you just earned (minus gas costs to run the lawnmower). Add in the money you save by not putting your children in daycare or after school care and add in the taxes that you don’t have to pay on your “income” and you may really be better off staying at home or at least not as bad off as you had thought.

Now of course it does not make financial sense for every mom to stay at home. It will make less sense for those with greater incomes or for those who are counting on their benefits. But even so, it is an interesting exercise to see how much a person actually “earns” when she is not working.

In Real Life (IRL) – I have been a mom for 7 years and I have worked part-time (10-15 hours per week) for 4 of those years. At various points I have had to pay for childcare for 1 or 2 children that I normally wouldn’t have paid if I did not work. This past year with gas prices going sky-high and increased preschool costs, I figured out that I was only going to bring home $400 per month if I went back to work. And frankly for all of the extra work of dropping children off at various places for a few hours and driving 35 minutes to a job across the river, it just didn’t seem worth it. And when I calculated what I could make at home selling things on Ebay, it seemed even less worth it.

But besides the big expenses of childcare and gasoline, I hadn’t even calculated the other “costs” that go along with working. I would need to update my wardrobe a bit. I would not be coming home from work and mowing the lawn once per week all summer, instead I’d be paying a neighbor boy $35 per week to do so. I would not be cooking from scratch 6 days per week. I would not be comparing supermarket flyers for the best deals. Unfortunately, I would still be cleaning the house myself. (That’s one luxury I have never had).

There are so many little ways I save my family money by staying home because I have time to do things I wouldn’t be able to do if I had a job – even a part-time one. I spent two hours yesterday finding my husband the best deal on a rental car. I saved $35 for that effort. I went to two grocery stores yesterday to shop loss leaders. Trust me, I would not be doing that after a day at the office. That’s not to say that staying home is always the wisest financial choice. It’s not. But for now, combined with my desire to be home with my children, it is the best decision for us. I know by being out of the workforce, I am losing out on salary increases and contributions to retirement accounts. But having saved early on, it doesn’t hurt me too much. I plan to go back to work one day when it does make financial sense for us when my kids are a bit older and won't need childcare. But I probably still won’t have a housekeeper. Darn it!

How much do you “earn” by staying at home?

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