6 signs you probably can't afford to be a stay-at-home parent
- Having one parent stay home with children means losing one salary, and it's not right for every family.
- Several signs that stay-at-home parenthood isn't right for your family include a high debt-to-income ratio, a negative cash flow, and a lack of an emergency fund.
- If you will face any of these financial situations, being a one-income family might not be right for you.
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Having one parent stay home isn't for every family. While it can be helpful for a number of reasons, including reducing childcare expenses and being able to give extra care to children who may need it, sometimes the numbers just don't work out.
If you're considering having one parent stay home, financial planner John Pak of Otium Advisory Group in Los Angeles, California says some red flags will pop up if you're not ready. From a high debt-to-income ratio to living paycheck-to-paycheck, there are seven signs that being a one-income family might not be right for your family right now.
1. You have a high debt-to-income ratio
2. You don't have an emergency fund
3. You'd have to stop saving for retirement
4. You'd be living paycheck to paycheck
5. You and your partner haven't had the money talk
6. You can afford childcare, but you can't afford to lose the extra income
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