Balancing motherhood and a career is no easy task.
A survey from Pew Research Center found that one in five working parents says they’ve turned down a promotion in an attempt to balance work and parenthood — 23% of them were women. Balancing both can become so challenging that some mothers feel they can’t do both and do them well.
A 2023 survey from Moms First found 42% of new moms have contemplated leaving the workforce once they had children. It’s a difficult decision that could impact your livelihood. If you’re in this situation and are thinking about leaving your job, there are some financial considerations you’ll want to make first.
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1. Covering your health insurance.
A lot of companies provide health insurance as part of their benefits package. However, once the job is gone, so is the coverage. If you’re considering leaving the workforce and you’re currently getting health insurance through your employer, you’ll need to find other coverage. An extension of your benefits through COBRA will be an option, but that typically lasts only 18 to 36 months and can be pricey at 102% of the premium.
If you’re married and your spouse is eligible for benefits through their workplace, consider adding yourself and any dependents to their plan. This can be a better, more cost-effective alternative than seeking coverage on your own.
2. Saving for your retirement.
In addition to health care benefits, a lot of employers offer retirement plans. Ensuring you have enough money to sustain your retirement is imperative. A report from Northwestern Mutual found the typical worker believes they will need more than $1.4 million to retire comfortably.
If you’ve been contributing to an employer-sponsored retirement account, now is the time to take ownership of the account. Consider rolling the funds into a traditional IRA or Roth IRA, if you can remain in the same tax bracket. Doing this allows you to make contributions, up to a certain yearly limit, that fit into your budget, and you can still save without fear of breaking the bank.
3. Adjusting your family budget.
Transitioning from a two-income household to a single-income household will require some financial adjustments. Unless you have a hefty emergency savings fund, this transition will likely force you to make some adjustments to your budget. Write out all of your expenses so you can see exactly how much money you have coming in and going out. With one parent staying home, expenses for gas, business attire and meals will be less, but you may need to cut back on discretionary spending. Skipping vacations, reducing entertainment and canceling memberships or subscriptions can help put a little extra money back into your pocket.
4. Downsizing your lifestyle.
If cutting extra expenses isn’t enough, more cost-effective measures may be required. In some cases, downsizing to a more affordable home may be a great option.
Shopping around for less expensive options on cable, internet and cellphone service will help you lower your monthly expenses as well.
Obtaining car and home insurance quotes from various carriers may prove to save you even more, especially if they offer bundling discounts. You may also want to consider selling or trading a vehicle for one that will be paid for to eliminate a car payment.
When it comes to balancing a career and motherhood, the well-being of yourself and your family is the priority. If you decide leaving your job is what’s best for you and your family, try to not take on the dreaded mom guilt.
If you’re concerned about financial stability, there are employment options out there that offer remote work, part-time work or more flexibility that will fit with what you are trying to create for your family as a mother. This could help supplement your income, while allowing you to be as present as you can be for your family.
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This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.
