Financial Advice for Stay-At-Home Parents

Budgeting, saving and planning for the future can look pretty different depending on whether or not your household includes a stay-at-home parent. Whether you’re a caretaker who stays home or a primary earner, here are a few pieces of financial advice to keep in mind.  

Discuss Your Budget as a Team  

Budgeting is even more important when you’re running a household on one income alone. Ideally, both partners can sit down once per month and talk about upcoming expenses, plus any recent bonuses or salary changes. This is also a great opportunity to discuss any instances of over or underspending during the previous month, which may indicate a need to tweak some aspects of the usual budget. You can use a budgeting app such as EveryDollar, or find more budgeting ideas on the Harvard FCU blog. 

Share Accounts—Or Don’t!  

Every family has a different approach when it comes to combining finances. Some couples may set up a joint checking and savings account, while others prefer to maintain individual accounts. When one partner earns a salary and the other works inside the home, it’s particularly important to find a system that works for the whole family. Many couples opt to create a joint account for household expenses (groceries, vacations, back to school supplies), while using separate accounts for personal spending.  

Maintain a Good Credit History  

As a stay-at-home parent, it’s still important to maintain or build your credit score. Making regular purchases with a credit card—and paying off your entire statement balance every month—is a good way to keep your credit in good shape. If you don’t have a long credit history and don’t qualify for a credit card, you can become an authorized used on your spouse’s card in order to build credit. You can also opt to put utilities in your name. Just make sure bills are always paid on time!  

Plan for Retirement  

Living on one salary typically means only one person is adding money to a 401(k) or pension scheme—making it all the more important to build your household retirement savings in other ways. If the primary earner’s workplace offers 401(k) matching funds, consider contributing additional money as a couple in order to max out that account. Each partner should also look into opening an Individual Retirement Accounts (IRA) to increase tax-advantaged retirement savings from more angles.  

Consider an Insurance Policy  

A life insurance policy helps to ensure that if anything should happen to the household’s primary earner, the other members of the family won’t find themselves in financial hardship or be unable to cover the bills for jointly owned property. Having a life insurance policy can be particularly useful when one partner has been out of the job market for many years, and may be unable to regain their former earning potential should they unexpectedly need to return to work.