Becoming a new parent is one of the most life-altering moments there is. You go from having to worry about yourself, and keeping all those things you’ve got going on straight, to a whole new level of responsibility and decision-making. It’s the ultimate test in #adulting, for sure. One of the biggest decisions people are faced with during the parenthood transition is whether or not one partner will stay at home once the baby is born. It may be the most complicated (and guilt-laden) issue facing young households today. There are so many pros and cons to consider, and every situation is different. Ultimately, you and your partner have to hash it all out, and decide what’s best for your growing family.

Now, we’re talking about a complex topic with multiple variables. Looking at the financial side is merely scratching the surface, but at least it can help you get the conversation started. Here are some talking points to consider:

What’s the value of a stay-at-home parent?

A simple question at first glance, but clearly a challenging one to put a dollar amount to. Being a stay-at-home parent is a hard and oftentimes thankless job. Yet, it seems to be undervalued by society as a whole. It shouldn’t be. Think about all the tasks a stay-at-home parent performs on a weekly basis. Then consider the comparable labor costs in the U.S. today. You’ll quickly see just how much your household is saving by having someone handle all these things, free of charge. Keep in mind this snapshot isn’t all inclusive, and the hours would obviously fluctuate depending on your family’s circumstances and priorities.

Here is a sample breakdown of a stay-at-home parent’s week:

According to these very rough numbers, a stay-at-home parent’s annual salary (or what it would cost to replace him/her) lands at a very conservative $87,000. This doesn’t include holidays, corporate benefits, paid time off, or breaks on the weekends. It’s difficult to even put a monetary value on those employment benefits. And it isn’t even taking into account how much childcare costs. According to a recent nationwide survey, “nearly one in three families report spending 20 percent or more of their annual household income on childcare.” Clearly, having a parent stay at home offers a household a real value, and a mechanism to greatly lower monthly expenses as a whole.

What’s the value of two working parents?

On the flip side, two parents staying in the workforce certainly has its benefits as well. The long-term monetary advantages for both parents can include:

• Higher gross household income;
• Steady career advancement;
• Accrual of Social Security;
• Being able to participate in employment package benefits (access to healthcare, corporate retirement plans, pension);
• Potential to contribute more to retirement savings over time (access to company match).

In reality, many of these benefits aren’t realized until well into parenthood, as childcare costs when kids are infants and toddlers tend to be the hardest on your wallet. And just as there’s a lot of guilt surrounding stay-at-home parents in our society, the same goes for parents who both decide to remain in the workforce. It seems parents are judged no matter what we do.

What’s the end game?

Well, it completely depends on your personal situation. One of the best ways to see how it will all play out in the numbers is by checking out different scenarios in your financial plan. There are so many other factors to consider as well. The most important thing to remember is that in the end, you and your partner should be comfortable and happy with whatever decision you make.

If you’d like us to take a look at your own household situation to provide you some additional guidance, we’d be happy to do so. Just reach out!