Financial Impact of Giving Up Work for Children

photo credit: HAMED MASOUMI

Many new mothers dream of being able to give up work completely and devote their full attention to bringing up their children, especially in their pre-school years. However, as Girls Just Wanna Have Funds points out, many women are not completely aware of what a financial risk this step could be.

From a financial point of view, they suggest that you should, at a minimum, consider these issues while you are deciding whether or not to stay at home with your children for an extended period of time:

• Calculate how much impact not working will have on your retirement funds
• Consider how you will maintain work skills, knowledge and contacts for the time when you want to re-enter the workforce
• Calculate loss of income in terms of not only the loss of pay from not working, but the lower rate of pay you’ll most likely receive by taking a break (that is, if you’d stayed employed your salary would have probably increased more over the years)
• And, something nobody wants to think about - do you have an understanding (preferably in writing) with your husband about financial support in the event of a divorce

There are also considerations to be made about flexible or part-time work hours - if this is possible in your industry, it’s important to negotiate an appropriate package with your employer, especially in respect to benefits like health insurance.

Tags: children | Emplpyment | Financial Planning | Saving Money