When I was in high school, I met a woman named Kathy who changed my entire conception of how I could balance motherhood and work.
Kathy was my grandmother's next-door neighbor. A mother of two, she ran a small accounting business out of her home — carefully balancing clients and projects with diapers and play dates.
To me, she had it all: time with her kids, meaningful work, and the freedom to schedule her life the way she wanted.
Kathy hired me to babysit for her kids one summer, and I was thrilled to peek into the inner workings of her life. As a high-schooler, I didn't know exactly what career path I would head down, but I knew that by the time I had kids, I wanted to live like Kathy.
So, when I got engaged to my husband three years ago, I told him of my intended plans. I told him I wanted to stay at home with our future children for at least the first two to three years of their lives (maybe longer, depending on life circumstances), while holding down my own small business doing financial planning that I could scale based on my family's needs.
Of course, I knew that my desire to stay at home wasn't the only solution. Both my and my husband's mother worked full time and raised well-adjusted children. Plus, in these economic times, having two steady incomes makes life much easier. Was it really necessary for me to ditch a traditional career to spend extra time with my children?
For me, that answer was yes.
With the work world becoming more flexible, I believe that it's possible to have a fulfilling career that supports, rather than detracts, from motherhood. And I'm crazy enough to think I can engineer that life for myself… if I start working on it now.
Always supportive and practical, my husband asked me what we needed to do to make my vision happen.
Here's what we're doing.
First, we determined the cost
After running some numbers, I estimated that it would cost roughly $50,000 to $75,000 over three years for me to stay home with two kids. That takes into account diapers, clothes, and food (for them), but also big-ticket items like light child care, health care, and unexpected expenses I cannot yet foresee.
Since we plan to have children in three years, we have time to save roughly $30,000 (barring any large emergencies). Doing the math, that means we'll have to fund $20,000 to $45,000 of our child-rearing expenses with income.
We devised a savings plan
Currently, my husband and I both work in finance — he, in business development for a bank, and I, in investor relations for an asset management firm. We have no debt aside from our mortgage (more on that later), so we are able to save $1,000 per month toward the baby fund. Our baby fund is part of our emergency savings fund now, although we've talked about separating it out to be clear on where the money is going.
Combined with contributing heavily to our 401(k)s at work, and my maxing out my IRA (seeing as how I may not be able to contribute when the baby comes), we're saving roughly 25 percent of our pre-tax income.
While this may sound like an uncomfortably high savings rate for most, the truth is that we make a great income (almost $120K pre-tax) and we've been in savings mode for almost three years now (first for our wedding, then for a house!). We haven't let "lifestyle inflation" catch up with us, so we just keep plugging along like we're making 25 percent less than we actually do.
We started cutting costs now
We've actively made the decision to reduce as many essential living expenses as possible so we have fewer required bills each month.
A major example is our mortgage. When we purchased our home, we got a mortgage that we could afford on one salary — first because it extends the life of our emergency fund, but also so we could live more easily on one salary.
In addition, we've reduced a lot of our other fixed/recurring expenses. Over time, we've cut cable, opted for a limited cell phone plan, and stopped paying for "extras" like gym memberships. As the cherry on top, last year, we paid off all of our non-mortgage debt so that we don't have monthly debt bills.
It can be frustrating to live so frugally — especially considering that our combined income is well into six figures. "Six figures" is the point most people associate with financial smooth sailing — as if surely you should be able to save well and live well at the same time. For us, that hasn't really been the case. We still have to actively decide to make frugal decisions, delay gratification, and save for a future that's hard to visualize.
It's made easier by the fact that we hold each other accountable, and try not to deprive ourselves of the little things that keep us happy — like a date night once per week, and time out with friends.
I'm building up my business
In dreaming up my ideal work-from-home business, I wanted something I could scale easily and feel really excited about. I decided to pursue financial planning. I recently received my certificate in financial planning, the first step in my journey toward becoming a fully fledged Certified Financial Planner. While I fulfill my experience requirements, I've started offering budgeting, saving, and debt repayment services to young women and couples.
Right now, I'm keeping the business small and focused to build consistent income and a good reputation. My hope is to earn somewhere in the neighborhood of $25,000 to $30,000 per year to supplement my husband's income and our baby savings.
After my children have gone off to school, I don't plan to reenter the workforce, but to ramp up my business instead. Although maybe I should be concerned about rejoining the workforce after time off, I'm surprisingly self-assured. I feel certain that there will always be a job for a motivated financial planner, and especially one who has shown she can bring in business.
We've discussed what will change when the baby comes
When the baby comes, I plan to take off the first three months to adjust to motherhood. My husband plans to continue working full time, providing income for the family and continuing to grow our retirement savings.
After the newborn phase, I plan to get back to my home-based business, working in the mornings and spending time with my children in the afternoons. Like Kathy, I hope to hire a part-time nanny or babysitter to help take care of the children while I work.
If I'm able to bring in income beyond what I need to supplement the baby expenses, I will contribute to my Roth IRA.
Then again, I acknowledge …
From the outside, I am sure it seems crazy to be saving and planning for a child who doesn't exist yet. What if I don't like being a stay-at-home mom? What if my business fails? What if my husband loses his job? What if I don't ever conceive? There are a lot of moving pieces, and I know that I can't predict the future will play out as beautifully as I have planned.
However, above all, I think I'm giving myself options. Very few people ever regretted saving for a big event, and very few parents would be disappointed to have a financial cushion for their kids.
In conclusion, I find a lot of comfort in saving up to stay home with my kids, and I find a lot of excitement in building a business that can support myself and my family. I'm sure one day far in the future, my children will be thankful for my efforts, and that will make it all worth it.
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