One of the major decisions you will need to make if you are currently working is whether you will return to work or stay home with the baby. One factor in the decision is your personal preference. Do you want to be home? Do you dread the thought of leaving your career? The answer to these questions is a good place to start.
The next thing to consider is if you can afford to be at home with your baby. The first step here is to track all your expenses. Get out your past bank statements to help. Identify the expenses that are necessary and won’t change, such as the mortgage, utilities, food costs, medical expenses and other recurring bills that must be paid each month, regardless of whether you are working or staying at home.
Then list the other expenditures that are either related to work or not necessary. This would include money for gas, work clothing and entertainment expenses. Decide which you can live without and where you can cut the budget to allow you to be at home with the baby, if that is what you want to do.
Finances have a funny way of looking great on paper and then not working the same in reality. Fortunately, pregnancy is a great time to put it to the test. You have months of working ahead of you. Subtract your work related expenses and put the rest in a savings account. Don’t touch it for bills, car repairs or any other problem that may crop up. Do this for several months.
Can you do it? Can you really pay all the bills and other expenses without your salary? If so, you can probably afford to stay at home. If you are constantly tapping the savings to pay the mortgage or the electric bill, you may need to work, at least part time. Doing a trial run of living on one salary is a good way to know if you can make it.
In the meantime, you are building a savings account for the future. Things can and do go wrong. The car will break down and cost several hundred dollars to fit. Eventually your appliances will quit and need to be replaced. Unexpected medical bills or other household repairs will crop up from time to time. Having a cushion in savings can make a big difference when these things happen.