Bloomberg recently shared that modern motherhood has economists worried, calling for a better balance between work and family life. This sparked quite a bit of debate in the forums regarding a woman's role, or particularly a mom's role, in a family. For many career women, this is an intimately felt and potentially intense topic. How do we approach this with coolness? What are some of the considerations that we should make?
Following the birth of your child, you may feel that both you and your spouse need to work to meet household expenses and maintain your current lifestyle. However, you may discover that one of you can stay home without seriously affecting your net income. Though you would have to do without a second income, let's factor in what you'd save:
Now, what are the adverse effects of becoming a single-income household? The most obvious, of course, is a reduced family income. Let's also not forget what effect a leave of absence will have on the stay-at-home spouse's career and your family's retirement plans. You may both be at a point in your careers where you are earning high salaries. Leaving your job now may mean having to start over lower on the career ladder. And if one of you leaves work, you may miss the opportunity to fully fund your employer-sponsored retirement plan. Further, with only one income, you are more vulnerable in the event of an economic downturn. Finally, the stay-at-home spouse may lose the sense of accomplishment and community one gets from working outside the home.
You should balance all the issues, both pro and con. And remember, although it may make sense for both of you to continue working, some non-financial considerations, such as the opportunity to raise and supervise your child in your own home, may outweigh your financial concerns.
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The new survey released by the National Foundation of Credit Counseling (NFCC) found that while consumers claimed to spend less, more adults now carry credit card balances from one month to another. While we don't have the 2016 data, the survey conducted by Bureau of Labor Statistics showed that average expenditures increased 4.6% to $55,978 in 2015 from 2014. As interest rates continue to rise, adding pressure to reduce credit card debts, it makes us think that financial literacy continues to be an important topic. So, take the mini quiz below for a spin and see how well you do.
Wan McCormick is a Certified Financial Planner and Accredited Financial Counselor. At Reliable Alliance Financial, our goal is to provide affordable and objective financial advisory to consumers with honesty and transparency.