Financial tips for stay-at-home partners
It can be difficult to adapt from being a breadwinner, to a stay-at-home. Here are tips for managing household finances as a home-based-partner.
The Covid-19 pandemic has caused many people to re-examine their family- and work roles. A record 4.5 million United States workers quit their jobs in November 2021, and while South Africans are less likely to resign given the scarcity of jobs, there is greater interest in work-life balance and mental health.
While a stay-at-home partner has traditionally been a mother caring for young children, someone could be in this new role for various reasons: retrenchment due to Covid-19, study, devoting themselves to caring for a child or elderly relative, providing family emotional support, or taking a break to recalibrate their lives.
This can lead to re-assessing the role that the stay-at-home partner will play in managing the family’s personal finances. It can be difficult to adapt from being a breadwinner, to the person who no longer earns, but spends most of the money.
“Keep in mind that even if you are no longer bringing in a salary, you are playing an extremely important role in the family,” says Shafeeka Anthony, Marketing Manager of JustMoney personal finance website. “You are providing, in most cases, stability and security at home, there are fewer care expenses, your kids face fewer stresses, and you all enjoy more flexibility and family time.”
READ: Four powerful tips to help couples master their finances
JustMoney offers six tips for making this transition:
Communicate regularly: Be part of financial decision-making and then keep yourself up to date. Understand the policies the family holds and know where to locate key documents. Have a clear idea of how much money comes into the household every month, how much debt there is, and what amount is allocated to spending and saving.
Get appropriate insurance: Whether you are a work- or home executive, both of your roles would be expensive to replicate. Ensure that you have sufficient life, disability and medical cover so that, should something happen to either of you, the school fees and household bills will still be paid.
Have a long-term financial plan: Even if you are not currently working, ensure that you have a financial strategy in place. Have savings in your own name, as well as a credit card. Use it and pay it off in full every month so that you have your own credit history and a viable credit score.
Update your will: A current will ensures that guardians can be appointed for minor children. There is a record of assets, and taxes are limited for deceased estates.
Pay off debt: Both partners need to be aware of how much debt is owed, both individually and on a joint asset such as a house. Open up and admit it if you have a debt problem. Professional help and advice is available.
Budget for affordable fun: While balancing the household budget, consider inexpensive activities that will make family life more fun. Ideas include a picnic in the park, a visit to a museum, an outing for an ice-cream and picking fruit at a farm open to the public.
“Being a stay-at-home partner alters how you view yourself, and also changes your role in the family,” says Anthony. “Having a clear understanding of the household finances, and playing an active role in managing them, helps to keep you upbeat and positive. As part of your long-term financial planning, it’s also sensible to have a work re-entry strategy in mind, given the current economic uncertainty and the increasing cost of living.”
The JustMoney website offers articles, money management tools, and a wide range of financial products and services. Over 200,000 South Africans subscribe to the newsletter to stay informed. Find the website here.
READ: Marriage and Finances: When women earn more than their partners
Image courtesy of iStock/ @kzenon