With increasing childcare costs causing financial problems for many families, we look at how some parents are choosing to stay-at-home and give up full time work to raise their children themselves. With the help of daddy bloggers, Dave, ‘TheDADventurer’, and Mark Bryce, from The Adventures of Sonny and Luca, this guide will suggest ways of helping to improve your finances in preparation for becoming a stay-at-home parent.
The cost of raising a child has reached £229,251, and with many parents having to pay up to £67,586 on childcare alone, some are spending 27 per cent of their household income on nurseries and child-minders.
With childcare costs higher than ever, some parents find that their family would be better off if one parent stayed at home to look after their children.
Dave, who started his blog, The DADventurer, to document his life as a stay-at-home dad, found himself in this situation. He says:“When we found out that the missus was pregnant, we had the option of me becoming a stay-at-home dad and looking after the little one or working full time. But after looking at the sums, it transpired that the majority of my salary would be spent on childcare and I would hardly get to see my family.”
While being a stay-at-home parent reduces the need for childcare, it can also be a shock for many parents when they have to support their family on just one income.
Dave adds: “Having a baby can be expensive business. You not only need to buy loads of stuff prior to the arrival of the little one, but then there are the everyday costs associated with keeping the baby clothed, fed, sheltered and entertained. This can be even more of a struggle when living on one income or when a large proportion of you salary is spent on costly childcare.”
It’s not only childcare that can cause financial problems for parents, clothing a child can cost £10,942, and paying for hobbies and toys can cost £9,377. With the overall costs of raising a child increasing each year, 44 per cent of parents have reduced their routine spending in order to make ends meet.
Thankfully, for those who decide to have one parent stay at home to raise their child, there are ways to ease the financial strain when you find yourself living off one person’s income.
Choosing the stay-at-home parent
For decades, women have of course outnumbered men when it comes to being the stay-at-home parent, and while this is still the case, the number of stay-at-home fathers in Britain has reached a record high. According to the Office for National Statistics, there are now more than 229,000 stay-at-home fathers – up from 111,000 in 1993.
For many, having the father at home while the mother goes out to work is a choice that makes perfect sense in an era where 17 per cent of women are the main earner in their relationship.
For parents looking to greatly reduce childcare costs, deciding which parent will stay at home can be a difficult decision. But most families find that it makes more financial sense for the parent who is earning the most to continue working while the other parent stays at home to raise the child.
Like Dave, Mark Bryce, who blogs at The Adventures of Sonny and Luca is another parent who decided to stay at home and raise his children while his partner returned to work. He says: “We both felt it was important for one of us to be home with the kids in their very early years if possible, so after scrutinising our finances we agreed it was just about feasible for us to swap roles. To do so meant making a lot of sacrifices and in hindsight far more than we'd first envisaged. Our household income more than halved, and I'll not pretend it's been anything but a real struggle.”
He adds: “When I first became the primary carer it was largely through circumstance. Shortly after our youngest was born I was made redundant. My partner was keen to return to work after two periods of maternity leave in as many years whilst I desperately wanted to spend some quality time with our two children as my job prior to this had involved working long hours, often away from home.”
Strengthening your finances
It can help to strengthen your finances in the run up to becoming a parent. This money can help to fund your monthly outgoings, contribute towards some larger purchases, or simply create an emergency fund for you to fall back on.
Dave says: “We’ve found that managing on one income is a challenge but not something that can’t be achieved. However, you need to plan well in advance and continue to keep an eye on finances once the little one has arrived. For instance, when we knew we were trying for a baby, we made a conscious decision to put more of our salaries into savings and ensured that our savings accounts were market leaders in terms of interest rates.
“We’ve always been careful with money, but ensuring that we have enough saved in the bank for emergencies and that we are careful on a day to day basis means that we can continue to live pretty much the same lifestyle as we had prior to the baby being born.”
Saving money can be a struggle, particularly when regular living costs and responsibilities need to be taken into account. But as Mark and Dave prove, there are ways of reducing daily expenditure so that cash can be freed up and used to make being a stay-at-home parent a little bit easier.
Dave says: “We have rarely bought any baby-related item at full price – there are so many sales and discount codes available nowadays making it very simple to save a few quid here and there which can then go towards other things.”
When Mark became a stay-at-home dad he also realised just how important it is to tighten up your spending habits to make your money go further. He says: “Everything needed to change, such as our lifestyle, our priorities and most importantly our habits.
“We stopped doing a weekly big shop in a single supermarket, instead shopping around for the best prices. Meal plans are drawn up and we only buy exactly what we need.”
Financial health check
Mark recommends regularly doing a financial health check to ensure your finances are in order and to see where improvements can be made. He says: “Prior to becoming a stay-at-home dad I'm embarrassed to admit I rarely changed utility providers or insurance companies. But now I do a financial health-check every six months. When contracts end I shop around and use comparison websites to find the best deal. Then I approach others to haggle. I was amazed at just how much you can save by doing this.”
A financial health check can make it easier for you to see where your money is being spent and enable you to find better deals. Whether you’re thinking about cutting energy costs or remortgaging your property, set some time aside to do the following:
- Review expenditure
- Assess investments
- Look for a better deal and switch if necessary
Although families have to stretch their incomes further than before, only a third of households have thought about what they would do if they were to lose their income. By making regular payments into an easy access savings account you can build up an emergency fund to fall back on if necessary. Keep a look out for an account with a good interest rate, as you’ll be able to maximise your savings. Since you may need to access your money at short notice, avoid fixed rate accounts as these will lock your money away for a set period of time. However, for more long term savings, fixed rate accounts can be a great way of making your money work harder.
When deciding whether to be a stay-at-home parent or return to work, it’s important for parents to make a decision based on their own circumstances. What may be best for one family, won’t be ideal for another. While there are parents who find that staying at home to raise their children themselves is ideal, 52 per cent of parents have either had to return to work earlier than they planned following the birth of their child. Others have had to take on extra work to make ends meet. Twenty six per cent of parents had to take on a part time job, while 15 per cent had to return to work full time, even though they’d rather work less hours.
If you or your partner would like to become a stay-at-home parent, there are plenty of personal savings accounts available to help you to maximise your savings through generous interest rates. For more information, please get in touch with Aldermore Bank.
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