I know this is a topic that is especially unpopular for women, but it is an important one.  A lot of my friends and family are in the midst of expanding their young families and having multiple children and they are contemplating the idea of either staying home and raising their kids or working part-time.  I myself have thought about staying home but letting go of the stability of a paycheck makes me apprehensive.  Whenever I need accounting/financial advice from a woman I always go to my resident expert, Stefanie.  I hope you find this post informative, I sure did!  If you have any questions, please feel free to contact Stefanie at Stefanie@Booksplus.ca – she is the coolest accountant you will ever meet!
 
A bit about Stefanie, from Stefanie:

I knew that I wanted to be an accountant since I was 14 years old, how odd…I know. I still have hopes of making it to Hollywood, but until then Accounting it is for me.  I have an Accounting Diploma, Bachelor of Commerce, and most recently obtained my designation as a Certified General Accountant. I am a learner for life, accounting is constantly changing and it is important for me to keep up and be relevant. I have worked in Finance for the past 13 years for a world-wide corporation building my strengths in many areas within the accounting field, and have been preparing tax returns since I was 17. I am married with 2 children, a 4 & 5 year old. They test my patience daily but have brought me the greatest moments of my life.  Free time for me is sparse, but when it is available I relish the calm and quiet. It took me many years to truly understand the importance of doing nothing sometimes.  Now, as my kids are preparing to enter full day school, I am preparing to make my triumphant return to the working world. Good luck to us all!

 
Best Financial Advice for Parents Who Want To Be Stay-At-Home Parents
 
I chose to be a “Stay-At-Home Mom” long before I even imagined I was ready to have children.  This allowed my husband and me to make key financial decisions that would allow this desire to become a reality.  Unless your significant other has a sufficient income to pay your monthly expenses and then some, then it is very difficult to make this decision in the spur of the moment.  Being a “Stay-At-Home Mom”, from a financial perspective, requires thought, planning, and sacrifice.  It will not always be easy financially or even mentally as it can be very difficult to go from living a certain lifestyle to something that appears to be less than what you are accustom to. However, there are benefits and joys that come from having this opportunity that you cannot put a dollar value on.
 
I have outlined what I believe are some of the key steps in planning your finances in a manner that will either help you achieve your goal or make it easier if you are already doing so.  Make no mistake that for most who survive on one income, it is not an easy task.  If I had a quarter for every “must be nice”, I would have lost a few less night’s sleep.  There is an opportunity cost to every decision in life; it’s just a matter of what you deem to be a priority in your own life.
 
Step 1- You need to know what you are spending. Download your monthly bank & credit card activity and review your expenditures and determine what your fixed expenses are as well as those that you can cut out. 
 
Step 2- Come to an agreement with your significant other about the plans & projects that you are willing to put on hold i.e. Renovations, moving, travel, new car etc. 
 
Step 3 – One of the best pieces of financial advice out there is to have a “rainy day fund” equivalent to 3-6 months worth of income.  Especi
ally in cases where you are dependent on one income, this becomes very crucial.
 
Step 4- Review your current financing/lending situation:  
 
·   For most it is easier to make one consolidated payment versus trying to make a mortgage payment, car payment, line of credit payment and credit payments.  Consolidating your debt may be worth discussing with your bank.
·   To ease your cash flow woes you can talk to your bank about extending the amortization period of your mortgage to reduce your monthly payments. I would suggest onlydoing this while you are down to one income as it will increase your interest cost. 
·   Look at switching your Property Tax and/or Insurance payments to a monthly payment.  Most will find that trying to save thousands to make lump sum payments can be difficult.  By incorporating these costs into your monthly fixed expenses you can ensure that the bills will be paid and the “money set aside” not spent.
 
Step 5 – If you do not have a Line of Credit this may be a good time to consider getting one. If you are unable to put away the “rainy day” fund this can act as your backup in cases of emergency.  It also usually can be offered to you at a lower interest rate than your credit cards. 
 
A few extra considerations
 
·   For some staying at home 5 days may be impossible, consider 2-3 days.  This can offer you the home-work life balance that you need to live a happy and fulfilled life. There are always options; you just have to seek them out.
 
·   From birth to 6 years of age the Government issues $100 per month per child as the “Universal Childcare Benefit”. I strongly suggest taking this “free money” and directly depositing it into an RESP for your child.  For the 6 years that it is paid the Government will match 20% of your RESP contributions. So if you contribute $100*12mths x 6years, that is $7200, the Government will contribute an additional $ 1,440. That will create a balance of $ 8,640 in 6 years, pretty great start I think.  I’ve heard “use the money for diapers”, if you couldn’t afford the diapers prior to having the baby, you should be taking a very close look at your financial situation.
 
One topic that most couples fight about is money.  Aside from health matters, there is no greater stress to a relationship.  Always remember that when one person carries the burden alone, the weight is heavy and can sometimes lead to resentment or anger. As with everything in a marriage, you must always keep an open-mind, and have fair and realistic expectations of the life that you want and the life that you can afford to have.
 
Stefanie

 

With Love, 

Daily Tiramisu

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