Financy* says during this uncertain period, women may be asking themselves, can they afford to work from home or be a stay at home Mum?
The thought might seem like the right thing to do from a health perspective – but how many of us can really do it with external work commitments or actually afford to do it?
So if you’re asking yourself, “Can I afford to be a stay-at-home mum?” know that you are not alone.
Let’s discuss what you might want to consider:
Family financial considerations
Having a baby is costly.
In Australia, we’re fortunate that Medicare covers many of the expenses associated with prenatal care and the actual birth.
However, those costs are just the beginning.
When you decide to introduce a new life into the world, there are costs you must factor in for life.
Overall, as of 2012, it was costing Australian families a total of $816,000 to raise each child, with experts estimating that the costs would be closer to a million dollars soon.
Childcare expenses
If you already have one or more children, you’re no doubt painfully aware that childcare is one of the most significant expenses associated with parenting.
If you’re a mum-to-be, the costs associated with childcare may come as an unpleasant surprise.
Childcare is quite costly and from July 12, the government’s free childcare stimulus is set to end.
The Brisbane Times has reported an estimated average childcare cost of $106.39 per child per day, before subsidies, nationwide.
In the Sydney CBD, the costs are more like $158.98 per day.
If you’re currently working, and you decide to continue after your child is born, you’ll most likely have to pay for daycare.
On the other hand, if you decide to become a stay-at-home mum after having been employed, your family will lose one income.
Either way, your family’s disposable income will drop dramatically as a result of your decision to have a child.
Doing the maths reveals to some families that it isn’t worthwhile for mum to continue working after giving birth.
That said, Financy stresses that when having a baby, any financial decision not to work should take into account dual incomes where it’s relevant plus superannuation.
Consider your debt to income ratio
If your family’s debt-to-income ratio is low, that’s a strong indicator that you could easily consider being a stay-at-home mum.
If it’s high, you’d need to be much more cautious about making that particular leap; it could be risky.
In this case, if you really want to stay home with your child, becoming a work-at-home mum might be the most viable compromise to consider.
Evaluate your cash flow position
Crunch some numbers to determine whether your family could meet all your monthly financial obligations on a single income.
Then determine whether you’d have any money left over for savings.
If you’d be living from paycheck to paycheck without being able to save any money, quitting your job would not be ideal.
This is particularly true if your family doesn’t already have an emergency fund available.
If you decide to keep working
In times past, it was usually a given that you’d have been able to keep your job if you decided you wanted to continue working during your pregnancy and afterwards.
Australian employers are not allowed to discriminate against pregnant women.
If you’re already employed in Australia, your employer is legally obligated to provide parental leave time for you and allow you to return to work afterwards.
The amount of time and time frame depends on your specific circumstances.
You can consult the Fair Work Ombudsman or your attorney for more information about Fair Work laws in Australia.
Some businesses won’t survive the Coronavirus crisis
Many businesses have been adversely affected by the coronavirus crisis.
It is likely that some businesses will fail as a result of one or more aspects of the pandemic.
You can’t count on having a job to return to if your employer’s entire business is at risk of failure because of the crisis.
This is something to seriously consider before planning a new pregnancy – especially if you’re working in an industry that has been deemed “non-essential” during the crisis.
*Financy creates and publishes a variety of content on women’s money matters.
This article first appeared at financy.com.au
