Women in the U.S. typically retire with lower Social Security benefits than men, because women tend to work fewer years. Ditto for company pension plans; if you quit work for five years, you'll pay the price later in the form of a sharply lower retirement income. So forget about the small loss today; staying home with the kids can pose a huge economic loss later. For more on this subject, turn to chapters 66 and 68.
Reason 4: The Parents Mental Health
Some people just are not well suited to stay home with their kids full-time. They need adult interaction. One of my clients, a working mom, had a job whose income was so low she actually spent $35 week more, net of child-care expenses, than she earned. When I mentioned this to her, she replied, "Well, it's cheaper than therapy!"
Reason 5: To Improve Your Child's Development
A friend who has a little boy once told me, "If my wife were to quit her job and stay home with Billy, he would have a total social circle of one person — his mommy. But in day care, he's learning social skills by being around 20 other kids." Point well taken: The value of interpersonal communication skills for a child shouldn't be dismissed.
So, should you work or stay home? Clearly, it's not an easy choice. Yet, more and more employers are offering flexibility that might help make it easier than before for both parents to work. Job sharing, flexible work schedules, and working from home are some of the options available in today's workplace that you should explore as you try to resolve this issue.
My point is that you have a choice. Too many parents do not realize that options exist. Too often, parents assume they must work without considering the alternative. To be a success with your financial planning, you always must examine your options. And proper planning is perhaps nowhere more important than when it comes to raising your children.
Ric Edelman is the author of the number 1 New York Times bestseller "Ordinary People, Extraordinary Wealth", as well as "Financial Security in Troubled Times", "The Truth About Money", "The New Rules of Money" and his latest "Discover the Wealth Within You". Ric hosts weekly radio and TV shows on WMAL AM630 and Newschannel 8 in Washington, D.C. For more of his financial planning advice, visit ricedelman.com.
Books by Ric Edelman
Ordinary People, Extraordinary Wealth
Ric Edelman discusses the 8 secrets of how ordinary people became wealthy.
Financial Security in Troubled Times
In this book, Ric Edelman discusses financial planning in these troubled economic times following the September 11 terrorist attacks.
The Truth About Money
Ric Edelman covers all the basics of personal finances in easy-to-understand terms.
The New Rules of Money
88 strategies for financial success.
Discover the Wealth Within You
Edelman discusses "a financial plan for creating a rich and fulfilling life".