Being a stay at home parent is a vital role in the long term success of your family’s financial well being.
Although your responsibilities don’t entail bringing in income, you do have a responsibility to maximize the income coming in. Learning how to stretch each dollar to work for you is key. Depending on your responsibilities, you have probably the most influential financial roles in your household. The majority of the money your family spends is going to be driven by your activities from groceries, outings, meals, shopping, maintenance, and more on top of your daily responsibility to raise your child(ren).
Unfortunately, finding deals and discounts won’t make you rich; however, the activities you and your family do can make you a massive difference in driving the right behaviors for your family. For example, when you have fun with other families are you going out to Dave and Buster’s and spending lots of money or are you packing a picnic and going to the park and making your own fun? Are you cooking your own meals and meal prepping for your family for lunches at work and school?
Being good with money has nothing to do with how intelligent you are and a lot more to do with your behaviors. The majority of people’s wealth comes from controlling emotions, not learning the technicals of investing or finance. Think about the last big financial decision you made. Did you make it based on an excel worksheet where you crunched numbers? Probably not, you probably made a decision at the dinner table with your significant other and said, “Hey babe, we need a new car.” Then you went online, read a couple of articles, found a highly rated vehicle, and said this is the one. But did you need it or did you want it? A new car is awesome, don’t get me wrong. I can and would love to buy a brand new Tesla but do I need one? No, I will continue to drive my 2004 4runner because I want to control my future.
Happiness comes from control. I want the ability to do what I want, when I want to, where I want to, how I want, for however long I want. But it will be really hard for me to get there if I am spending every dollar that comes in.
When you’re trying to figure out what is good vs bad habits the best advice I can give is to look at general trends. Don’t study one person, book, or newsletter, study the trends overtime that makes people wealthy. Things like don’t move the goalposts (goals) too much based on making more money or keeping up with friends that “seem” to be doing better.
Most people want to be rich so they can demand respect and be admired, but that doesn’t come with a bigger house and cooler car. It comes from being kind, having empathy, and having humility. Morgan Housel said “Wealth is what you don’t see. Modern capitalism helps fake it until you make it a reality. Wealth is cars not purchased, watches not worn, first-class tickets foregone. Financial assets that have not yet been converted into stuff you see. But we can’t contextualize what we don’t see.”
Wealth is the effect you get from your money-making money which is the result of compounding. Most people don’t let compounding work for them because you can’t see any immediate effects. Don’t interrupt compounding if you can because of an emotion like fear of the market being too high. If you find yourself making decisions based on fear give yourself more room for error by holding more cash so you don’t sell stocks.
Being a stay at home parent means you have to focus on good behaviors like savings as well. My brother once told me when I was really young to not set goals like making a certain amount of money because once you reach that goal you’ll inevitably want to make more. Learn how to be happier and more efficient with what you have.
More income doesn’t mean more wealth. More savings = more wealth. More wealth = more control. More control = Financial freedom. Financial freedom = Happiness.