I wrote this post after reading Ginger’s post on stay at home wives, and what the world generally thinks about them. Brainless, mooching off a husband, couch potatoes, lots of nice things come to mind.
To me, being an independent woman and staying at home is completely compatible. I have left the corporate world at the age of 29, and since then, have been working on my own projects. I bought a little house cash in Guatemala last year, and have been fixing it up and building an extension over the past few months, in hopes of turning it into a guest house some day. I also am turning a 90 acre piece of land into a residential development, running two personal finance blogs, overseeing my stock and real estate investments and running the household. So much for the boring housewife life.
Yet, when I tell people I don’t have a day job anymore, no matter that I am financially independent and my living expenses are covered by my investments, they tend to see me as a picture from the 1950s, waiting for my boyfriend to come home and rubbing his feet while he reads the paper. More than once, my boyfriend has had to explain to his friends that we go half way in all expenses, as they thought I was taking advantage of his money.
It is simply the life I wanted to create for myself, a life where I wake up with the sun, go out for a run, swim in a crystal clear lake, fix us breakfast, and then go on with my daily activities. If I have kids someday, I hope to home-school them and bring them up to be curious, tolerant, open minded human beings, always trying to learn something new. I believe life is too short to sacrifice 50 hours a week working and commuting to the office, and that even if you do not have a full time job, there are plenty of opportunities for you to help improve the household’s finances.
What you save from not working for the man
Daycare. If you have kids, daycare will eat a big chunk of your paycheck. You may also be denied a promotion that would mean longer working hours because you have to be at daycare by 6pm every day.
Transportation. Every day, you spend money to go to work. Your car mileage, gas, insurance, or your transit pass. Even if you cycle or walk to work, the time you spend commuting has a cost. It is time you spend away from your family or not doing something you love. You may not even need a second car if only one of you works, although if that means you’ll be stuck at home all day and run errands on the weekend, you should keep the car and have weekends to enjoy quality time with your family.
Clothing. You will not need to dress for the job anymore, if you work corporate, the savings can be pretty high.
Lunches out. Rare are the workers who brown bag it to work every day. $10 lunches out just once a week adds up to over $500 a year.
Miscellaneous expenses. Your coworker is asking you to chip in for his 5K race and you can’t say no. The secretary is retiring and you give $10 for a common gift. You worked so late there is no last bus, you take a cab home. A little here, a little there, it adds up.
Taxes. If you are a one salary household, you will pay less taxes and may lower the tax bracket of your spouse as well.
Time. Many days, you will be too tired after work to cook and will buy take out or convenience food for the family. You will hire a baby-sitter or a cleaner, or a lawn mower because you want time for yourself on your days off.
Bargains. When you only have two hours on Saturday to run your household’s errands, chances are you won’t be a very savvy shopper. If you stay home you will have more time to look for bargains, from food to clothes to holidays, and stretch the family dollars further. Weekends will be spent doing frugal-but-awesome activities that you have found out about during the week, instead of paying for overpriced popcorn and a movie.
If you add up all those expenses, and earn less than $50K per year, you will find out that your real net income, after you take off all work related costs, is pretty low. Especially if your salary made the household move to the upper tax bracket. If I make $50K and my spouse $200K, and we are taxed at 40%, we pay a combined $100K in taxes. If I stop working and our tax bracket goes down to 30%, we pay $60K in taxes, meaning my working for $50K only brought the household $10K after tax. If daycare is $1,000 a month, not uncommon in New York City for example, I am now paying $2,000 a year for the privilege of going to work. Plus transit pass, etc.
What I omitted in the calculations are company perks, like 401(k) contribution match, a free cellphone, etc. that add up to your gross income.
If the lowest earning spouse starts staying at home, you may break even or even have more disposable income if you start cooking all meals from scratch and watch every expense in your budget.
Now I understand that we aren’t all made to stay at home. I ran the numbers for my sister and she was making about $300 from her day job after all was paid. But she wants to get out of the house for her sanity and enjoys her job, so for her it makes sense to keep working. But if you are only so-so about your job, here are a few ideas you can try in order to make money from home and keep your financial independence. Because for as much as I love staying at home, I would hate not having at least my little fun money on the side, that I can spend freely without consulting my other half.
Make money from home ideas
Take in more kids. You can baby-sit your neighbor’s kids occasionally or run a small daycare from home. When your kids are of school age, you can do after school care, pick up kids at the school, and watch them until 6pm.
Bake and cater for parties. If you are a good cook you can charge to cater for other kids’ birthday parties and bake awesome cakes.
Customer service rep. Those kinds of work from home opportunities are usually flexible to work around your busy schedule.
Virtual assistant. You can find such jobs advertised on Elance or Taskrabbit, and get an ongoing 10 or 20 hours a week job.
Freelancing. From proofreading to translating to web design, there are thousands of jobs advertised online. However, people tend to bid really low, so your best bet is to ask your network first.
Trainer. If you like to exercise, why not take on a couple of clients and help them get in shape? This is typically a job where you just need an above average level to start teaching beginners.
Dog walker. If you have pets to walk around anyway, take the neighbors’ along!
Make crafts and edible goods. Have you ever received a compliment about how nice the skirt you made looks? How delicious your strawberry jam is? Make a batch and sell them at the local fair, online on Ebay or Etsy, or privately to your friends.
Those are all easy ideas you can start with no or little money down, and can bring you a nice little side income while fitting your schedule at home.
Do you work or stay at home? Would you choose to stay at home if you could?
This was a guest post by Pauline Paquin, you may know her blog Reach Financial Independence, Pauline has just launched Make Money Your Way to help readers diversify their sources of income with real estate, investing, entrepreneurship and online endeavors. Born and raised in Paris, Pauline writes about how she has been traveling the world for the past 10 years, while trying to build wealth and achieve financial independence, and how you can follow your dreams and reach your goals too. You can follow Pauline on Twitter @RFIndependence.