Stay-at-home moms may not want to consider what would happen if the family finances change. However, smart financial planning includes considering a loss of income and a Fee-Only financial advisor can help you with this.
Emma of Wealthy Single Mommy does not hold back when dishing out advice, as is the case with her piece entitled “You cannot afford to be a SAHM.” (SAHM is an acronym for stay-at-home mom.) She swats away imaginary excuses from readers and focuses on the bottom line: you don’t know the future and your family will need money. It could be death, divorce, an unemployed spouse, or even boredom that motivates your job search and things may be very difficult if you’ve left the workforce entirely. She writes:
“Researchers at Harvard and University of Chicago found that when professional women leave the workforce for three or more years, they suffer a compensation hit of about 37 percent. For female MBAs who take time off to be with children, pay drop 41 percent relative to male MBA earnings.”
One commenter said that this advice fits if you have a “career” prior to children but not if you have a “job” and Emma replied that “you miss out on raises, promotions and new skills every time you step out of the workforce.” Emma also tells her own story–she was married to a man who earned a good living but she maintained her freelance business after having children. When her husband suffered an unexpected fall and brain injury, the marriage was irreparably damaged and she is now divorced. She imagines her life would have been very different if she’d decided to be a stay-at-home mom and hadn’t continued to work.
Her insistence that women cannot afford to be SAHMs does not include an insistence that all mothers maintain 9-to-5 jobs. Instead, she recommends at least keeping some presence in the workplace since “…we live in an age when part-time, consulting and freelance work is not only increasingly available to employees, but also growing in popularity among employers.”