Stay at Home Parents - What's Your Safety Net?

There are good reasons to choose to be a stay at home parent, especially when the kids are little. Some choose to stay home with the kids until they’re all grown. It’s a good thing to do for your kids when your family’s situation allows it, but you should be aware of the risks. Life rarely goes as smoothly as we’d like, and that’s why every stay at home parent should have a safety net. Here are some options to consider.

Life Insurance

Having at least some life insurance on both parents is a generally good plan, regardless of who works or doesn’t. But if one parent has no income coming in, life insurance can be a way to ensure that in the event the working parent dies, they’ll get some money, which gives them some time to get things going again.

Don’t just buy a minimal policy if you can help it. Think about how much financial help your family would need if either parent dies while the children are still growing up. What is the financial value of each parent? How many years will you need that value to continue? What about medical bills and funeral costs?

Find a good insurance professional and talk about what kind of life insurance coverage your family should have. Be sure you understand the different kinds of life insurance. Get coverage on both parents, regardless of who earns an income. Stay at home moms and dads contribute significantly to the family in ways other than by earning an income. Money from an insurance policy can help the family deal with those issues after an at home parent dies.

Of course, life insurance only handles one of the potential problems that can arise for the family. It won’t help at all in many other situations. If divorce, disability or unemployment are causing financial issues, it won’t help at all.

Several Months’ Savings

Saving up several months’ income is another way to be ready for those problems life loves to throw at you unexpectedly. Having enough money to live on while you get things figured out for a few months is a huge help.

Saving up a lot of money may not be easy, depending on how close your expenses are to your income, but if you can manage it, do so. Living off savings is far better than using credit cards and having to pay them off later, believe me!

This should not be the same as your retirement fund if you can help it. By the way, you should have a retirement fund for yourself too, even if you have no other personal income.

Your Own Retirement Plan

Just because you’re a stay at home parent doesn’t mean you don’t need to contribute to a retirement plan for yourself. Whether you go back to work when the kids are older or not, contributing a retirement plan for yourself is very important. A lack of income means you aren’t contributing to Social Security, and that effects the benefits you would get when you’re older. There are a variety of plans you or your spouse can contribute toward for your retirement. Talk to a professional to learn more.

Up To Date Professional Skills

If you had to work outside the home, what would you do? What kind of work have you done in the past?

Make sure that you keep up on any qualifications for work you’ve done in the past, or work on qualifications for work you’d like to do. If you have to go back into the workforce because that’s the only way you can support your family, do what you can to make it the job you’d like, not just the first one to come along when you’re in a crisis.

Be very careful when choosing an online college or vocational program. Many programs are not worth what they cost. Others are excellent. You want a program whose graduates find appropriate work after graduation. If too many graduates have trouble finding employment related to their training, that’s not a good sign.

You can also read up on what’s happening in your industry. Read trade journals when you have the time. You can also consider joining a professional association. This can help you to keep in contact with people in your industry, which may become valuable if you go back to work, as well as help you be aware of changes in the industry.

Earn Income From Home

Of course, you can always do your best to earn income from home, as I and so many others do. There are many ways to do this, from working for an employer to working for yourself.

Don’t just look at how someone else is earning money from home, however. They’re doing what works for them. Look at what you can do. Other people can be an inspiration, but you’re more likely to succeed if you work things in your own way.

Do not expect earning an income from home to be easy. It rarely is. You have to figure out how you’re going to earn money and make it happen, while managing your at home life. It can involve using some kind of child care if your work requires more focus than you can manage with your children around. Alternatively, it may involve early or late hours, and less time for sleep.

Earning an income from home is my personal safety net because it doesn’t rely on how my husband is doing. If (god forbid) something happens to him, I’m still earning a living. My income has helped keep us afloat in the past.

Build a Support Network

If all else fails, or even if all else is working pretty well, make sure to have a good personal and professional support network. Your support network can help you get through tough times and may even help you find what you need to improve things, whether that’s a new job, the right doctor or something else. They might be there as a shoulder to cry on or bring a meal over to help you out.

Maintain or build your professional network on LinkedIn. Connect with former employers and coworkers. Look for relevant professional groups to join. Participate.

Keep in contact with friends and family in person as well as online. Getting some time with your parents, siblings, friends and so forth is important. You need time to be yourself, not just a mom or dad 24/7. Facebook, Instagram, Twitter and so forth have their place and you should take advantage of your preferred social networks, but for most people there’s still nothing like getting together in person and having fun.

Also network with your fellow at home moms and dads. Many of them will have had professional careers too. You may be able to help each other keep up with your former careers, even if they were entirely different. You can always compare how you each keep up with things.

Talk About What If Something Happens To You

Don’t just consider what happens if something happens to your spouse or significant other. What if something happens to you? I promise, it will be a significant impact to your family, and something you should plan for.

Go beyond the life insurance mentioned before. Stay at home parents can become disabled too… how would you handle that as a family? Is your health insurance good enough to cope with that, and what about long term disability? It may not hurt to look at the costs of long term care insurance for the stay at home mom or dad. If you aren’t earning an income, you may not be able to get disability insurance, which is meant to replace the income you earned by working. Long term care insurance will ensure that you receive care if you need it for a long time, so your family doesn’t have that strain.

If disability insurance is what you want, you have to have an income. If you’re working now, look into an independent disability insurance policy. Pay attention to the terms, especially how long you need to have worked before quitting for the insurance to be effective. Make sure your policy will continue as long as you pay the premiums – the coverage is based on your paycheck when you were working, even if you later quit. This will probably be more expensive than disability coverage provided by an employer, but coverage from an employer only helps while you have that job.

You don’t need to limit yourself to just one of these, of course. The more things you do to protect yourself, the better off you are if things go wrong.