Five Steps to Become an At-Home Parent

American two-income families earn 75 percent more than their single-income counterparts of a generation ago, but actually have less discretionary income according to Elizabeth Warren and Amelai Tyagi in their book The Two Income Trap.

The idea that your family earns more money but has less to spend may be discouraging unless you’d like to be an at-home parent. The truth is jobs, particularly second jobs, are expensive. When I worked outside the home as a social worker, I made about $28,000 per year, which combined with my husband's income, was a decent income. But we were always broke, running out of money before the end of the month. It seemed like it would be impossible for me to quit my job when we could barely get by as it was. But then I learned about the dual-income myth and when I ran the numbers, I discovered that 2/3rds of my income paid for work-related expenses. Of my $28,000 per year income, only $7,900 actually contributed to the family budget. The rest paid for things so I could work.

If you would like to join the 5 million moms or 3 million dads who stay home, here are some tips to help you afford it.

1) Determine how much your second income costs: When I worked, the majority of my income went to taxes, childcare, extra expenses for nicer second car, commuting, work
clothes, convenience foods and dining out, "I-deserve-this-because-I-work-hard" and guilt items for the kids.

2) Determine what you need to live on: Now that you know how much your job costs you, what would happen if you quit? This exercise will show you two things; 1) how much short, if any, you would be by having online one income and 2) areas that you currently over-spend that you can cut back on.

3) Cut back on food costs. You can save a significant amount of money by menu planning and shopping with a list. You can also save by not buying packaged foods and instead cooking from scratch. Not only will the food taste better and be better for you, but also it often only involves a couple extra steps. Avoid dining out including lunches, vending machines, and the coffeehouse.

4) Nickels and Dimes. This is usually a bigger area of excess than most people realize. Spending a few dollars here and a few dollars there doesn’t seem like it would make a big difference. But when added all together, it can cost several hundred dollars per month. Items in this category include things like coffee at the local cafe, magazines, paperback books, manicures, a quick snack on the way home, etc. The best way to avoid wasting money on the small stuff is to not carry cash or its equivalent (credit cards/checks), shop only with a list, use libraries and barter groups for books, videos and other items, and learn to pamper yourself at home.

5) You can cut back on home and auto expenses easily. Making sure your home is weather sealed (your utility company will likely have tips on this) and keeping appliances clean and tuned will help save on your electric bill. Install low flow water faucets to help save on water costs. Get rid of extra features on your phone and shop for the best long distance based on your use. Forgo the movie channels and opt instead to have basic cable or satellite service. Use your library to rent movies instead of pay-per-view or movie channels. For your car, opt to get a quality used car that gets good gas mileage. These not only can save you on payments and gas, but also on personal property tax, registration and insurance.

For many families, even savvy shopping doesn't completely eliminate the need for extra cash. This is particularly true when debt is involved. However, if you eliminate work-related expenses, cut unnecessary items from your budget, and learn easy ways to save, the income you need to earn should be significantly less than you originally thought.

In my case, I didn't have to replace a $2300 per month income. After I cut out work-expenses, sold my car and got a less expensive model, and cut back on household expense, I only needed to earn about $600 per month to stay home.

I could work 40 hours per week for $658 in discretionary income or I could stay-home, work part-time from home and earn the same. Hmm ...what choice would you make?

If you’re like I was and need to earn some extra money to stay home, its not hard if you go about it the right way. Do lots of research and heed the experts' warnings about envelope stuffing and other scams. Don't fall for "pay for a job" scams or sign-up to do nothing schemes. Working at home is work no matter what work-at-home schemers would have you think. If you do your research right, and choose the right work-at-home option for you, there is no reason why you can stay and work at home.

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