Motherhood and the Financial Consequences of Staying at Home

Today – more than ever in recent history – mothers are choosing to stay home with their kids rather than pursuing a career after childbirth. It just makes sense; employment prospects are few and the cost of childcare is prohibitive. But before you decide to become a stay-at-home mom and give up your job, consider these factors.

What’s Going to Happen in the Future?

Right now you may be in a stable relationship or marriage. I once was, too. My husband and I were like any young couple, starting a family with the dream of being together forever. Unfortunately, it didn’t work out that way and I am now a divorced mom raising two beautiful kids by myself.

Divorce is always a painful process but it becomes even more so if you find yourself suddenly alone, with no income and few, if any, employment prospects.

Look beyond the current moment and consider those factors which will work against your favor as a single head of household:

• The economy: still slow to recover
• Unemployment: no real growth in jobs yet
• Your employment history: big gaps don’t look good
• Consumer credit accounts: new rules are detrimental to stay-at-home moms

Unemployment and the Economy

One is based on the other; until the economy fully recovers, there will be little, if any, job growth, or at least not enough to make a dent in the steady, nearly double digit unemployment rate.

Because there are so few jobs to be had, competition is extremely fierce. Former Fortune 500 CEOs are lucky to find a job in this economy. If you’ve taken a year or more from the work force, your resume is not going to look nearly as attractive as it once did. In comparison to other applicants, you are more likely to get passed over.

If you are lucky enough to land a job after spending time as a Domestic Engineer, count on making less money. Most mothers are paid 4 to 15 percent less than women without children. Add that to the glass ceiling preventing women from making as much as their male counterparts.

No More Credit

New consumer credit rules meant to protect college students from receiving credit without income and the ability to pay back their charges also affect stay-at-home moms. The new rules state that you must earn a personal income and cannot rely on that of your household in order to be given credit. For the full-time mother, this makes opening a credit card in your own name improbable.

The banking industry as a whole is changing its credit rules, too. They are rarely extending credit to anyone and even those applicants who are considered good credit risks are being discouraged by high interest rates.

For the stay-at-home mom, this means it will be very difficult to establish any type of credit.

The Solution

If you are a mother who wishes to earn her own income while taking care of her kids, there is a solution. It’s call entrepreneurship.

Starting your own business from home (online businesses are ideal) is a great way to have the best of both worlds. You can choose the hours you work, set up an office right next to the kids’ playroom, and even ask your children to help! You will establish your own source of income and can apply for a credit card in your company name, protecting you from a negative financial situation in the future.

Savvy moms look beyond their current circumstances and plan for change. Don’t be caught unaware by a situation that may leave you the sole breadwinner for your family. Plan now and enjoy a stable financial future.