A SAHP's tips for paying off a mortgage
Parents, and expectant parents, rarely make decisions lightly. We analyse every detail, every possible outcome and every alternative route, to reassure ourselves that we’re doing the right thing for our family. So deciding to leave the workforce and the security of a double income to raise a baby, possibly several, while your partner is away all day – well that’s a huge deal (and one that may require several cups of coffee to get to grips with). If you have a mortgage to pay off, then the stakes are even higher. Have you got that coffee pot on yet? Read on for some practical tips on making SAHP-hood work for you.
Work out your stay-at-home savings
When you’ve nutted out your one-income budget, and factored in how much baby will cost, it’s time for some positive reinforcement. List all your going-to-work related expenses and calculate how much you’ll save by not going to work. Transport, petrol, food, work attire, dry cleaning, manicures and other personal grooming costs all add up (not all professions will incur those last three costs, but if you regularly interact with customers and colleagues, those things are expected) Don’t forget to add childcare and its associated costs to your stay-at-home savings list, plus what you’ll save on tax; with one partner working and one at home, just one income is taxed, and at a lower rate too, which means you’ll get to spend more of what you actually earn, instead of giving it to the government. Visit the IRD website to find out your tax rate.
Add it all up and behold: your first SAHP savings contribution!
Talk to your bank
Embarking upon SAHP-hood may mean having a chat with your bank about restructuring your mortgage. Your bank will talk you through the different options, such as restructuring your mortgage halfway through the term, or taking a mortgage holiday or an interest-only term.
Set savings goals
You’re more likely to save when you have specific goals in mind, so set up specific accounts for specific goals. All this makes for easy money management, and easier budgeting as well.
Embrace temporary or part-time work
Staying at home doesn’t mean you can’t work at all, and after few months (that’s just a guide, by the way!) you may feel able to take on a little part-time work. It’s a good way to keep your foot in the door of your industry – or perhaps even venture into another. Research ways that you could supplement your partner’s income in your industry. For example, book-keeping, proof reading, newsletter writing, baking, sewing, web design, being a virtual assistant, in-home child care.
Having a thrifty attitude
Using cloth nappies, homemade meals, being smart about sales, getting used baby supplies…being a frugal SAHM is a full-time job of its own sometimes! Little things like breastfeeding if possible instead of buying formula, or borrowing a breast pump instead of buying one can save you hundreds of dollars. Talk to other parents and research online for ways to upcycle, recycle, share and swap – check out these ideas from OHbaby! for decorating kids’ rooms on a budget, and ways to save around the house.
A one-income family will almost always earn less money than a two-income family, so give some thought to adjusting your lifestyle expectations. Being content with less is generally what budgeting is all about, so own it, embrace it, and remember it’s a season of your life, not forever!