Most families with kids wish they could have more time together. One of the best ways to accomplish this is to reduce the time parents spend away from home at work. The problem with this scenario is money. Cutting back work time usually means cutting back income.
If this is something your family dreams to do. A few things to consider are what working actually costs you. Yes, you do have to spend some money to make money. When evaluating your budget to determine if you can afford to go from two incomes to one, keep these common savings in mind.
1. Childcare
This one is so obvious, but it would be silly to not mention it. In most cases, the number one cost of working when you have kids is childcare. Quality daycare can be extremely expensive and the more kids you have the more it costs. For some families, the cost of childcare can actually be as much as they bring home in their paycheck or close to it. Certainly this needs to be considered when evaluating your budget to see if you can have one parent stay home.
2. Taxes
This is another area that has a huge impact when your family’s income decreases, although it is usually tougher to estimate. If your family’s dependents stay the same and your income goes down, you will pay fewer taxes. The difficult part can be determining the exact amount for your budgeting purposes. One method is to pull your last year’s tax return and reformulate it with less money. That will give you an approximation of what your potential tax savings could be.
3. Social Services
In addition to taxes, being in a lower income bracket can often enable you to qualify for financial aid and other social services. These can vary greatly by area and state, so you may want to explore some income ranges with your local agencies to see what you potentially qualify for. It could be anything from food stamps to a reduced rate on your Y membership, all dependent on your family’s complete financial picture and lifestyle.
4. Automotive
Whether it is gas, insurance, or even the car itself, you should save some on transportation costs. Unless you work from home, you have to travel to a worksite. For some families, they may only save money on bus fare. For others, they may even sell an extra car and eliminate all the costs of car payments, maintenance, gas, and insurance.
5. Food
When both parents work, it can be difficult to juggle the demands of feeding the family. Therefore, these families often turn to eating out and buying convenience foods. Unfortunately, the cost of eating this way can dramatically eat up a budget. If one parent is home more, the goal would be to eat out less, make lunches for school and work, and buy more scratch foods to make homemade meals. This can actually be a significant savings.
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