Budgeting

I remember the day I decided to stay home with my family as if it were yesterday. After receiving a call from my grandmother’s neurologist informing me of her early onset dementia diagnosis, coupled with also being 5 months pregnant with my first pregnancy, I knew I wouldn’t be able to stay in my work position.

I recall looking around my office and thinking, I need to go home. For good. 

While I had contemplated what my life would look like post-maternity leave I had never considered life as anything other than a woman on the fast track to eventually making a partner at work. 

But within a week of that fateful phone call, I was packing up my workstation and transitioning to working from home.

Within the next 9 months, I would find myself working full-time from home. For nearly half my original pay. Which was one of my greatest fears of all time- How will I be able to afford to become a stay-at-home wife, mother, and caretaker?

Because whether you’re pregnant and considering staying at home with your new baby, have small children, or are the caretaker of your baby-boomer parent, questions of finances will inevitably arise. 

How will we make it work financially? Can I continue to afford my grandmother’s medical expenses? Will I be able to maintain my own retirement funding and health insurance? What will the quality of my life look like if I’m no longer working outside the home? Questions I simply did not have the answers to. 

Regardless of my interpretations, I did it. I left the corporate fast-track, taking a self-imposed demotion, and transitioned to becoming a work-at-home mother too!

Before I go on I want to publicly state that I was incredibly lucky to be able to make this choice. As not everyone can afford to do so. Especially if your spouse’s income won’t cover your expenses each month at home. I was able to do so because I had a perfect storm of conditions going my way.

I was able to leverage my education, work experience, and time previously vested in my company to broker a deal with my employers to work from home. A negotiation that allowed me to not only work from home but to schedule my own hours and moonlight as needed. With the knowledge that I would never be able to reenter the workforce or make partners at my firm moving forward. 

I also had my husband’s full-time income to rely on. As an educator for nearly a decade at the time, he stepped into the role of understanding breadwinner, insurance provider, and retirement matcher, with grace and precision. And without his support, I would have never been able to work from home. 

I’m not going to lie, it was the hardest transition of my life. It was also one of the most rewarding moments of my life. Both in terms of personal growth and the even more important tasks of overhead and affordability.

With that sentiment in mind, I want to share with you 7 steps that helped me to transition to working from home that can help you get started on your own transition too:

1. Make a Plan

The moment I knew I wanted to stay home with my family I started making a transition plan. Because we were in debt, I knew that if I wanted to stay at home, I had to work from home to make the transition work financially.

For three years, I worked from home for my former employer in addition to taking on freelance writing assignments, blogger gigs, and even a shortlived MLM Scentsy opportunity. Then by the time my family was debt-free, I was ready to work from home on my own terms.

Keep in mind, you and your family might have a different timeline and variables to consider. Some of you will not have to work from home because your spouse can financially support your family. For others, simply cutting back on some basic expenses will allow enough wiggle room in the budget to make it work.

If you know you want to stay home with your child, I would advise you to start planning as soon as you’re ready to grow your family or step into the role of caretaker. If you know you want to have children in the near future, sit down with your partner to discuss how much money is ideal.

Talk about your variables. Where you will live, what schools your child will attend, your future career and mothering goals, and how these goals will impact your finances in the next year and beyond.

Discussing all financial matters and doing the mental math will help you brainstorm ways to make working from home feasible- Whether it’s having a certain amount of money stashed away in a slush fund or building a side business to a timed level. 

Because whether you’re ready to start a family or not, having babies takes time and money. And having a workable financial plan in place before you’re pregnant and throughout your pregnancy will help you to find a way to quit your job and stay home with your baby for the long haul.

2. Set Up an Emergency Fund

Once you have an exit strategy in place you need to commit to setting up an emergency fund at home.

Setting aside emergency cash is a great way to prepare for unexpected expenses down the road. Because when your family depends on one income, an emergency fund is essential for helping your family avoid debt or falling behind on your bills.

The way my family started our emergency fund was by Spring cleaning and decluttering our home. We were able to sell excess items online on Facebook local sites, eBay, and Craigslist. For items that could not be sold, we donated to a local charity shop in exchange for tax receipts to help us with our state income taxes for the following few years. 

Not only did decluttering help us jumpstart our emergency fund but it helped our family establish a working relationship with the various aspects of simplified living and helped cement our beliefs in minimalist living for years to come.

3. Pay Off Debt

Saving money is important but paying off debt should be high on your list, too. The more debt you pay off, the more wiggle room you will have in your budget. Which is especially important when transitioning to becoming a one-income family. 

You can pay off debt using many different methods, so choose the one that works best for your family. My family used the Dave Ramsey snowball method to pay off close to $75,000 in medical, consumer, and student loan debt.

We found the snowball method most useful to us because we are equally emotional and mathematical in our finances. And each time we paid off a small debt it motivated us to pay off the next debt each time. 

Moreover, we were able to become debt-free because I committed to earning $1,000.00 or more per month while working from home in addition to my salaried position. I found numerous side hustles along the way to help me pay off the last of our family debts. Everything from painting murals, to opening an ETSY shop, to selling second-hand books on eBay. I found ways to meet my goals.

Keep in mind, while it’s ideal to be debt-free when transitioning to working from or at home, you don’t have to pay off every one of your debts before you become a stay-at-home parent.  But do consider paying off a few smaller debts that can free up a few hundred dollars a month. As this could mean the difference between successfully being able to afford to stay at home or having to maintain at-home work positions too!

It’s also important to try not to take on any new debt. For our family, this meant buying new-to-us vehicles with cash, buying refurbished consumer electronics, and not going on family vacations for five years. These trade-offs helped me be able to be a stay-at-home parent and caretaker. 

4. Create a Working Budget

When we were in the process of becoming debt-free we maintained a working budget at home. A financial spending plan centered around only my husband’s contracted take-home salary each year. All extra funds initially went towards paying down debt, which was later used to fund my personal retirement accounts and health care costs. 

To accomplish this, my husband and I sat down and devised a plan for our family to be able to thrive on that single income.

With pen and paper, we painstakingly devised a line item budget that allocated every dollar of every single income source into specific budgetary categories, including housing, insurance, groceries, entertainment, car maintenance, and pet care. Funding each category by maintaining a cash envelope system for each of the before-mentioned items.

For our budget, we utilized the 60/20/20 method, with 60% allocated for essentials, utilities, insurance, and tithing, 20% for short-term and retirement savings, and 20% for personal use including groceries, clothing, and entertainment. While this method worked well for us, do your own research and find a budgeting system that works best for you.

Then, take a season to test your new budget. Preferably before you quit your job. Even if you don’t have to stick to that single salary, pretend as if you do. 

And if your bills are still too high, it’s time to start cutting expenses. For our family, this included replacing our cable service and downsizing to one vehicle at home. 

5. Consider Working From Home

As I mentioned before, the main reason I was able to stay at home with my family is that I continued to work from home from my previous position while building several digital ventures on the side. Including blogging with various digital marketing agencies, freelance writing businesses, and my ETSY shop. All of which helped supplement our total income. Plus, working from home gave me a way to stay active in the business field, just on my own terms.

There are so many opportunities that exist for stay-at-home parents. Whether you find a work-from-home job or start your own business, find what works for you. 

6. Look at your grocery receipts

One of the best ways I found to increase my saving at home when I wanted to transition from work was to streamline my grocery budget.

In the past, I would buy things without a grocery list. Purchasing items because they were new or on sale. There were weeks I was spending $150 or more for essentially little food. Plus we were eating out three times a week beyond that! 

I curtailed this spending by always having a grocery list with me at the store. I also started strictly sticking to a weekly meal planning and meal prep schedule. Which included, without fail, leftovers for lunches and everyone eating what was planned for dinner. Little people and fuzzies included. We also started cooking at home each night and transitioning to a plant-based diet. Saving our family hundreds each month.

I also stopped using all paper and digital coupons and started solely utilizing digital rebate apps, such as iBotta, when grocery shopping. While we don’t buy many processed food options, we still save quite a bit with just that one app. In fact, I generally earn enough on iBotta to fund my family’s 4-Gift Christmas each holiday season at home! I also utilize receipt scanning apps that give us a portion of our food budget back when we scan our current week’s grocery receipts. 

Finally, we started composting our food scraps to help save on Spring gardening costs and transitioning to zero-waste living. Replacing paper towels alone with reusable kitchen towels helped save us over $30.00 each month alone! All measures continue to save us to this day! 

7. Stop trying to keep up with the Joneses

Arguably one of the hardest steps in transitioning to working and staying at home was having to stop trying to keep up with the Joneses.

This included impulse buying. For me, this meant not shopping at Target for over a year. Because for me it was a money trap. Each week I walked through that store saying, “I need this” or “It’s 80% off!” and before you know it, I’d spent $100.00 dollars on non-essentials. Then the next week? I had a standing date to do it all over again. 

Now I only go about twice a year and try to keep the spending there to a minimum. Because let’s face it. I’d buy all the things if left to my own devices. And you know you would too!

Maybe Target isn’t your jam. But I bet there is at least one store in your queue that you spend a ton of money at that you don’t need to. I highly recommend not shopping there as often, when shopping using a cash budget, deleting their store app from your devices, and unsubscribing to their inbox advertisements. Whatever helps you to cut spending in-store!

I also had to get super real with myself. Finding ways to let go of the fear of missing out and letting things go. Including downsizing our home. 

This was a hard thing for us to do. We formed an attachment to our home. Loving our 3,500-square-foot home with its massive mortgage payment to boot. But with working from home, living in that home simply didn’t make sense for us while transitioning to one income at home and working to become debt-free.

We downsized our home to a more affordable 2,500-square-foot home. Allowing us to not only save money but personal time too. With a smaller home to maintain, I reclaimed hours a week previously spent cleaning and maintaining our home each weekend. Giving my husband and me back enough time for a much-needed at-home date night each week! 

All-in-all, no matter if you end up staying home or continuing to work, either away from home or at home, looking over your finances is always the best place to start. 

Because in the end if you are wanting to stay home and your spouse is on the same page, you’ll be able to find a way to make it work. If that’s your dream, there’s a way to make it happen. Now I want to ask, are you a SAHM or WAHM? What helped you be able to stay home financially? Share your story below. And do you know friends who are looking to make this transition, pin this post!