In Defense of Working Parents...From a Stay at Home Mom

Testing, testing...is this blog still on? :)

Hi LWGers! I miss you all! In fact, I really miss blogging in general. It is hard work keeping up with a mobile (read: nearly walking and getting into EVERYTHING) baby.

This cute little face definitely eats into my blogging time. Get it? Eats in? Oh, I kill me.

How is everyone doing, both financially and personally in this new year?

I know I don't blog as much as I would like, but I actually did over on my mom blog, Mama Mahvelous, and it combines both my love of personal finance and talking about parenthood, so I figured I'd pass it along.

You are probably aware that after careful consideration and over a year of saving, I made the decision to stay at home with my beloved Baby C. After a few months, I realized it looked nothing like any of the "Real Housewives" life (I mean, seriously - how did they come up with that title?!) and it was very hard and demanding work. I came across this article that tries to put a monetary value on the duties of a stay at home parent, and it equals a salary to more than $96,000 per year. But even as a stay at home parent, I felt a little conflicted. Are my skills really up to par with a counselor, a professional chef, a housekeeper, and a nurse? Outside of my own head, probably not. What about the parents that work full-time and still come home to a house that needs to be cleaned, dinner that needs to be made and laundry that needs to be folded? Anyway, it's a subject that I find fascinating - trying to assign a salary to a parent who stays home. To me, it's a priceless opportunity and I truly cherish being home, even when I have bad days. I'm heading back to school in August, so my time is limited and I'm squeezing it for all it's worth.

Read more over here.

But what do you think? Do you think you could (or should) put a salary on being a stay at home parent? Or do you think people are just trying to feel valued in a society that is career oriented?

The Decision to Stay at Home

As soon as we found out we were expecting, the very next conversation my husband and I had was how we planned to raise our child. Was I going to stay home or go back to work? (Note: it's not that we automatically jumped to me staying at home because I was a woman...my husband makes considerably more than I do, so it makes the most financial sense).

After looking at the costs of daycare and calculating what pay I would take home after childcare was paid for, I would net less than $500 every month. From that, subtract a car payment and weekly fillups at the pump, and I'm barely making enough to go to the grocery store twice a month. It didn't seem worth it to me when I feel like we can budget better in other places. We made the decision for me to stay home.

So how did we do this, and how will we survive in the future?

1) Practiced with one paycheck. My husband and I thought this might be a possibility when we found out I was pregnant, so we practiced living on one income. My entire paycheck for 10 months went into savings. Not only did we get the hang of what it would be like living on a single salary, but we bumped up our emergency fund, created a medical savings account, started a savings account for our daughter, and even fully funded a future vacation (Maui in November!). It took a little getting used

2) We are a one car family now. Even though my husband's main mode of transportation is the bus, he had an SUV that barely had any miles and came with a large car payment. My small commuter car wasn't conducive to our new lifestyle with baby and all the stuff that goes with her. So we traded both in for a Subaru Outback! Not only does this cut our car payments in half, but it decreases auto insurance, service and maintenance, and all of the other expenses that creep up when you have a car.

3) Cutting other incidental costs. Some spending naturally goes down when you have a baby - entertainment (unless you want to pay a babysitter, and then the cost doubles!), nice meals out, shopping for yourself. We're taking a hard look at cutting cable (mentioned here), and being smarter about every day choices.

I have no doubt that it's a little more unstable only having one income, particularly in this still shaky economy. But I think we're prepared for most worst-case scenarios. The only thing that is difficult about this for me is not being able to contribute to my retirement fund for a few years and getting used to not having my own spending money.

One interesting tidbit from Salary.com - the stay-at-home mom's regular duties add up to being worth over $115,000 a year! While you get no vacation days or pension plan, the benefits are pretty hard to top.

Any other families who grappled with this decision? What did you ultimately decide and why? Does anyone else have other suggestions or tips?

Lessons to Teach Kids About Money

As I'm weeks away from welcoming our little baby girl into our home, I am thinking about all the things my husband and I will have to teach her: sharing is caring, if you don't have anything nice to say, don't say anything at all, treat others the way you'd like to be treated, subject-verb agreement...the list goes on and on. But one thing I don't think enough parents tend to tackle is the subject of money. Studies show that parents have a hard time talking with their kids about the big three: sex, drugs and rock and roll...er, money. But it's hurting our kids - by the time children start to manage their own finances, they have an average of $2100 of debt on 4 different credit cards! Schools can't be guaranteed to teach financial literacy - most states do not have mandatory financial literacy units. I know we're still a few years out from talking to Baby Claire about money, but this is where my husband and I are thinking about starting.

Allowance does not equal an entitlement. I do believe that kids have to have their own money in order to understand how to manage it. That said, I don't think kids should get $10 a week just for being them or doing their basic household responsibilities, like keeping their room clean or making their bed. No one pays me to clean the house! It's just what I have to do as a member of the family. When kids want to take on projects that fall outside their realm of responsibility, then they should be paid according to their age and the level of difficulty of the chore. It shows they have to earn money, they can't just sit and wait for it to fall into their lap.

The importance of being earnest. Money is very complex, and should be taken very seriously. Yes, you can have fun with your money and you should! But money is for more than just having fun. It's survival, both short and long term. It's saving for a goal. It's giving to something or someone who needs it more than you. I love the piggy bank below because it accounts for all the various ways kids should view money (in my opinion anyway). Of course, kids should be able to spend money just like adults. They can get that toy they've always wanted, or they can buy something impulsively, never play with it again, and it becomes a teachable moment. But kids should also understand the importance of philanthropy and giving back to others. I want my kids to feel like they can make a difference - whether that's at their school, in their community or in the world. Philanthropy and charitable giving is a great way to make kids feel like they did something good for someone else. Obviously saving is a great value to instill in children - they might be saving for a big purchase or event, but teaching them to save when they're young will help them be better savers when they're older. And I love that there's an "invest" slot in the piggy bank. When you're ready to talk to your kids about how to invest and what the stock market is, that is a great tool to help facilitate that lesson. For allowance and cash gifts kids receive, I like the 40-30-20-10 rule: 40% long term savings, 30% big ticket purchases savings, 20% immediate spending and 10% charitable giving.

Image from Money Savvy Generation

Everything costs money. Or as my husband likes to say "There's no such thing as a free lunch." I don't think kids should be sheltered from the costs of things. Obviously, there are more appropriate ages to bring up the costs of a mortgage versus the cost of a pack of gum, but kids should know that everything has a price. I think showing monthly bills

or grocery store receipts can go a long way in kids understanding how money works to keep a house going. In order to get things that we need and want, we have to work and pitch in to earn money. At least until the money tree we planted last year starts to grow...

Practice what you preach. While we all want to raise financially savvy children, it's hard to do that when you have mass amounts of credit card debt, live in a house you can't afford, and spend money like it's going out of style. You are your kids' best teachers, but actions speak louder than words. Getting conflicting messages about money will no doubt confuse kids, so make sure to be a good role model yourself.

Are you a parent already teaching your children about money? What do you do that has worked? Did your parents give you any words of wisdom you take with you to this day? What are you planning on doing with your children?