Being a stay at home parent can be a great thing for your family, but it comes at a cost. Without the additional income, many families would struggle to make ends meet. This is why some changes need to be made in most cases. Take a look at a few tweaks you can make to your family budget in order to pull off this change.
Adjust Your Health Insurance
Going from two incomes to one will involve more than just losing an income, it will also include some added costs. One will almost certainly be health insurance.
With two incomes, you likely have one part carrying the children and one parent on a policy of their own. Since most employers will pay the majority of the healthcare cost of their employee, this makes sense. But what happens when you lose this job? The other parent will need to be added to the main policy and this will come with a price.
To fight the added cost of insuring an additional adult, some changes might be necessary. There are several ways to reduce your premium, but it mostly comes down to raising your out of pocket minimum or your deductible. Changing this number can greatly reduce your monthly premium, but it comes with some financial risk. An analysis of your prior few year’s healthcare spending could show you how much you can reasonably raise your out of pocket maximum without causing you too much risk.
Put An End To Restaurant Meals
If you do not want to end them completely, that is understandable, but you should greatly reduce your meals at restaurants. If you currently dine out once or twice a week, switch to once or twice a month. While this might seem restrictive, pretty soon you will dread going out at all and here is why.
One parent should become a good cook. It really is not as hard as you think, it just takes a bit of effort. There are plenty of resources available to you online and even if you struggle with boiling an egg, you can become a qualified home cook in a matter of weeks. Just rake it step by step and o not be afraid to try a new recipe.
Before you know it, you will be cooking quality meals at home and saving hundreds of dollars in the process. With the average meal coming in at around 60 dollars for a family of four, you can easily save close to 500 dollars a month by virtually eliminating restaurants. Even better, you will never miss it because you will soon find restaurant meals disappointing. Why put up with so-so food and lackluster service when you can eat better at home?
Cancel Unnecessary Subscriptions
When you have two incomes, it is much easier to let spending get out of control. While subscription payments might not seem like a big thing, they can actually cost you quite a bit of money if you add them all up.
Cable & Satellite
The biggest offender in this category is cable and satellite subscriptions. Cable and Satellite companies like to lure you in with an inexpensive introductory rate and before you know it, you are locked into a long term and often high dollar contract. Once you become a one income family, you will quickly realize that the 1500 dollars a year you are spending on television could be put to better uses.
Cancel your subscription television and switch to one of the inexpensive streaming services like ad supported Hulu or save even more and us a free service like Crackle.
While cable and satellite are the most expensive subscriptions, all the others can be just as bad, in the aggregate. This includes services like Spotify and all of those little pesky apps. With most of these services, there are free versions, which can be frustrating at time, but they are free. As a soon to be stay at home parent, free is one of the best words you can hear.
Consider Moving To Once Car
With only one parent working, there may no longer be a need to pay for two cars. For most people two cars means two car payments, two full coverage premiums and two maintenance records to worry about.
The average car payment these days is just short of 700 dollars and you can imagine how much good that money could do in other areas of your soon to be budget. This is particularly true when you consider that you may be paying that much money for a car that doesn’t even move.
It does not start and end at the car payment however. Add the additional cost of insurance and maintenance and you could foreseeable save 900 dollars a month by becoming a one car family. That is 5 figures in savings over the course of a year.
To Sum It Up
Moving from two incomes to just one can be a real challenge, but for some it is worth it. If you are considering making the move to being a stay at home parent, take the steps to make sure that you can handle things financially. You might have to make some radical changes to your life, but your families life may very well end up getting radically better.