Stay at Home or Work? 5 Factors to Consider After Being a Parent

Google+ Pinterest LinkedIn Tumblr +

Stay at Home or Work? 5 Factors to Consider After Being a Parent

Staying at home with the kids or working on a full-time job is one of the biggest, and easily the toughest, decisions that a couple has to take. We spoke to parents at BankBazaar, Inaki Del Rosario (Head of Brand Marketing), Tzyy Chin (Head of Business Operations & Customer Service) and Wui Liang Heng (Country Manager, Singapore), among others to find out what goes through the minds of working couples with children.

Here is some insight into the financial factors that need to be considered when making that choice.

1. You will need to plan for medical cover

One of the perks of a corporate job is the medical insurance that comes with it. Many employers offer insurance that covers the entire family, parents included. Any decision about quitting reflects directly upon your medical insurance. So, if you choose to give up your job and stay at home, carefully study the impact of the medical insurance.

Though all Singaporeans are covered by MediShield Life, getting additional insurance in case you decide to go the route of staying at home is always a good idea. MediShield Life is after all a basic health insurance plan that helps pay large hospital bills and only some outpatient treatments.

“There is a need to get more cover, especially for unforeseen situations like concern on parents’ health, unexpected deaths, as well as the health of the children,” says Inaki.

Related: 6 Common Misconceptions Singaporeans Have When It Comes to Life Insurance

2. Your savings will be impacted

Suddenly turning into a single income family affects your savings in a major way. “Savings will be affected by at least 20%,” says Inaki. Even with adjustments in lifestyle, savings will take a hit. While a lot of it will depend on how big the second income that you are foregoing is, anything earned between S$5,000-8,000 could impact savings by 40-50%.

You may have to consider switching your regular service providers or even cutting down on certain amenities to save money.

Tzyy Chinn believes that “Savings will be stagnant. In months where big-ticket items such as insurance premiums or quarterly management fees are due, you will notice that there will be negative cash flow for that month, and it takes a couple of months to top up the savings again.”

Related: 10 Practical Ways to Save on your Housekeeping Costs

3. You will need to cut down your entertainment and holiday budget

Apart from savings, travel and holidays make a huge dent in any budget. More often than not, this is one of the luxuries that is shifted to the back burner when one stream of income dries up. But a single income doesn’t always have to mean staying cloistered at home doing nothing; there are adjustments that can be made.

And here is what you can do:

  • Pay a little more attention to the fine print on your plastic and figure out how to get great travel deals and freebies from your credit cards.
  • Change your travel destinations. “We chose cheaper destinations. Instead of going to South Korea, Japan, Hong Kong or Europe, we went to neighbouring countries. We planned road trips to Malaysia or took the ferry to Bintan. We also planned staycations in Singapore and had fun!” recommends Tzyy Chinn.

Here are some ideas for trips within Southeast Asia and a list of the latest attractions and ways to entertain yourself if you decide to stay put in Singapore.

Related: 4 Financial Steps Every New Parent Should Take

4. Your future plans will see an impact

The shift from a double to a single income has a direct impact on future family decisions. These decisions could be anything from buying a house to having another baby. Since many future goals are dependent on your savings, it would mean having to save more now to meet those goals – which is practically impossible when you have just taken the decision to leave your job.

Some decisions change, as Tzyy Chinn found out. “We were originally looking to upgrade to a bigger house near our kids’ school, but this plan had to be put on hold until a later date.”

5. You will need to evaluate the cost of daycare or nanny versus keeping a second income

In general, it is very hard to quantify being away from your child, especially at a very early stage. Prohibitive day care costs in Singapore, as well as the cost of a nanny can give quite a blow to any budget. A stay-in helper is a more viable option, usually about half the monthly cost of daycare, if you choose to keep that second income flowing.

However, these decisions are personal and dependent on family structures. “I would give up a second income if it meant one parent will be separated from our child,” feels Inaki. Addressing this issue from a purely financial viewpoint, a second income obviously helps the family financially, unless the pay is really low.

Here is a glance at some of the expenses you will be incurring once you get pregnant. Alternatively, you might also consider taking up smaller side jobs that can give you an extra income while you take a hiatus from a full-time job.

Related: 4 Simple Ways Teach Your Children a Few Money Saving Habits

Share.

Leave A Reply

× AWESOME SAUCE!

Request received - loud & clear!
Returning you to where you were...