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Seeking a lifestyle changeJuly 5, 2016 Lifestyle
New stay at home parents should think through some key decisions.
You may want to switch careers based on a desired lifestyle change. If you’re married, you may want one spouse to stay at home while the other works. Let’s look at some things to consider before going from two incomes to one.
- Evaluate your family’s financial situation. If you’re carrying significant debt, this may not be the time to consider this decision. If having one spouse at home is important to you, take a hard look at your needs and wants and decide where you can reduce expenses in order to make it happen.
- Be realistic about your partner’s job security. There are no guarantees in the workplace, but you should have an idea of the strength of the current company and the industry’s prospects. Even if you believe the job is relatively secure, you may want to have a large cash fund available to cover emergencies or to bridge the gap if the working spouse is terminated or becomes unable to work.
- Do the math. Evaluate the true cost of two people working. Yes, you’ll have less income but you may also have lower taxes, clothing and dry-cleaning bills, transportation costs and car maintenance. You’ll also save on childcare and perhaps housekeeping services. On the other hand, consider the long-term costs of not working. For example, you may not be able to save enough for retirement and you’ll forgo any employer match on RRSP contributions. It also may be difficult to re-enter the workforce when you’re ready