5 Ways Being a Stay At Home Parent Saves You Money

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The past 9 months have been the best investment we’ve ever made.

Kids are pretty awesome. And now that the iHB household has one, things have definitely changed a bit. Michelle has transitioned to being a stay-at-home mother and homemaker, which puts me as the sole provider for our family. This is a noble task that I was more than excited to accept, though there is definitely an added weight to my responsibility to make sure I am bringing home the bacon (mmmmm….bacon….). Getting pregnant prompted us to purchase life insurance, as well as go in depth on our budget plan and look at ways we could save enough money so we could continue to pay our bills. One of the cool things we came to realize as we went over our budget is that Michelle being at home was actually going to save us money in a few different places.

Here Are 5 Ways Being a Stay At Home Parent Saves Us Money

  1. Grocery Budget. Our grocery budget used to be a bit out of control. We were young, newly married DINKS (double-income-no-kids) working in fancy-pants-ville with a taste for good food and good wine. We also both worked full-time jobs and didn’t always have time to make lunches. I got free food at work, but Michelle did not. Our food budget was a bit higher due to lunches out, as well as more dinners out because we were both too exhausted to cook at the end of the day. But, now that Michelle is at home and we are using eMeals (<- affiliate link), most dinners are planned, Michelle has lunch at home and I get free lunch at work (as per usual). We are definitely saving money on our grocery budget, and eating healthier too!. Overall, we save about $50 a month on the grocery budget because of our kiddo.
  2. Diapers. Michelle posted about how we save money by using cloth diapers. If Michelle was not able to stay at home, we would not have been able to get started using cloth diapers, and therefore the savings would have been lost. Daycares DO NOT allow cloth diapering and require disposables be used, so this is not an option to do full-time without a stay-at-home parent. We could have done part-time, but we would have lost out on any savings. Overall, our savings by doing cloth diapers is about $35 a month.
  3. Gas Budget. We used to drop about $250 a month on gas for us to both drive to work and back. We were able to carpool a little bit, but not always. Now that Michelle is at home, our gas budget has dropped to about $150 a month. And, now that I am carpooling, I expect it to drop to about $100 a month. WooHoo!! So, overall, we’re going to be saving about $150 a month on the gas budget alone.
  4. Daycare. If we had to put our little guy in daycare, it could cost us upwards of $2,000 a month. YIKES! Heck, even J Money over at Budgets Are Sexy just posted that staying at home with his kid 2 days a week is saving him $900 a month! With Michelle at home, not only do we get the benefits of mommy raising our little guy, but we’re saving about $2,000 a month by having her stay at home.
  5. Taxes. Not only are we getting a sweet tax credit (and exemption) for the little guy, but Michelle being at home means we are bringing in less income than if she was working, therefore lowering our tax burden. I haven’t crunched the numbers, but I think it’s ballpark somewhere near $1,200 in tax savings just for removing her income. So that’s $100 a month savings by having Michelle at home with our extremely cute baby 🙂

Total Savings

I don’t think is an exhaustive list by any means, but just some of the areas we realized that we are able to save money because Michelle is staying at home. Our decision to have her at home raising our kids was not based solely on financial reasons, but finding out that it would cost over $2,000 a month if she kept working definitely reinforced our decision.

Overall, we are saving $2,335 a month by having Michelle at home!

Comments: Have you considered the cost savings of being a stay-at-home parent? Are there any other cost savings that you can think of that are not listed here?

Note: Things are definitely tighter financially in the iHB household, but we wouldn’t have it any other way. Like I’ve always said, managing your money is always about priorities, and Michelle being at home with our son is right up at the top. If you want some insight into the reasons we chose this, Michelle found a great post that she feels explains these reasons really well.

Jacob Wade

Jacob Wade

Jacob Wade has been a nationally-recognized personal finance expert for the past decade. He has written professionally for The Balance, The Spruce, LendingTree, Investing Answers, and other widely-followed sites. 
He’s also been a featured expert on CBS News, MSN Money, Forbes, Nasdaq, Yahoo! Finance, Go Banking Rates, and AOL Finance.

In 2018, Jacob quit his job and his family decided to sell everything (including their home) to take off on an adventure. They traveled the country in an RV for nearly 3 years, visiting over 38 states, 20+ national parks and eventually settling in the sunshine state!

53 thoughts on “5 Ways Being a Stay At Home Parent Saves You Money”

  1. I ran the numbers and we would have been able to make it as a single income family with a stay at home parent (most likely would have been me since my wife LOVES her job). But we both make more than enough at our jobs to cover the day care bill and still come out way ahead. Do I wish he could spend more time with us? Sure, but we have goals that require both of us to work if we want to attain them. I’m also not sure we would save over $2K a month with a stay at home parents. Our day care is pricey, but it isn’t terrible (got to love the midwest sometimes)

    I am glad that it is working out for you, and hope for continued success!

    • Thanks Brian. It may not be for everyone, but I wanted to crunch the numbers just to see if it helped us or not, and luckily it did a LOT more than we thought. And yes, babysittin is crazy expensive, but rightfully so. Sounds like you have some great prices out in your part of the country…lucky 😉

  2. These are calculations that we haven’t had to make yet – but if we ever decide to have kids, we’ll be tallying up the figures.
    I know that you guys really value raising your little one with someone around – so how did you balance the probability of a “mommy-track” tht Michelle might be put on if/when she returns to the workforce. This is something that I’ve talked about with friends, and many say they’ve encountered it…

    • Haha, I had to look up the term “mommy track”. Well, ours was basically, get the best job you possibly can out of college and get promoited as much as you can, and when we have kids, she would quit. Forever. That’s pretty much it. 🙂

  3. Wow that’s a great savings! When we have kids, one of us plans on staying home. We haven’t decided who yet. It used to be him who would stay home, but now we’re undecided.

  4. It’s crazy how much daycare costs. My wife and I looked into it several years ago, but now with three little ones we’d have to give up retirement to put them in daycare. We both work from home so there are a number of the things on your list that we get to take advantage of as well.

    • Another work from home-r. That’s a great option. Yes, daycare is stupid expensive, but they are taking care of our precious little ones, so they have a right to charge an arm and a leg.

  5. Since we don’t have any kids yet it’s always nice to read posts like this. My sister in law says it will cost her upwards of $18k a year to put her little
    one in day care. Is that worth it or is it price gauging because they know their service is needed? I know kids can be a handful just not from experience… what do you think? Cheers Mr.CBB

    • I dunno, I think it’s a little bit of both. Putting a price on your kid’s time is tough, so i think daycare probably takes advantage of that. But my kid is a handlful for sure, always crawling everywhere, wanting to put everythig in his mouth, and generally being an awesome boy! So I don’t know about others, but if we ever had to put him in daycare, we’d get our money’s worth 😉

    • Frankly, I think that daycare costs are inline. Gone are the days where you paid some poor SAHM $25/week, so you could earn much more. Most daycare workers view it as a professional business, whether it is a national chain or in-home. You can’t expect them to work hard for nothing!

      • Thanks Kiki, upon our initial search, we found that as well. Also, you CAN find cheaper daycare, but I would not like to put my kid there, based on what I’ve seen. The good ones are pretty much $2,000 a month around here, even more for a nanny.

  6. While I agree, you’re saving a TON of money, there are also costs that are higher because she’s at home. I’ll bet your electric and air/furnace bills are higher because of higher usage, for example.

    Great piece on something people forget: staying at home has it’s advantages! (Plus there’s the non-financial benefits of kids who get valuable time with a parent instead of stuck in a day care every day).

    • Yes, if you look at the tax implications and income generated, sometimes one parent could be working a high-end job, but making a measly net hourly wage due to all the additional costs.

  7. Hey, you don’t need to explain yourself! It seems to make sense for you guys!

    I like to work and I don’t like to stay home, but that is my personal preference. Plus, we live in a low cost area so daycare isn’t that expensive. My financial contribution is still substantial even after paying for daycare. I love my job and to be quite honest I need a break from my kids!

    Every family has to do what makes sense for them! I’m happy for you guys!

    • Cheap daycare, that’s great!

      I wanted to explain a little because there is a social stigma about it, whether there should be or not. And yes, this definitely works for us and enjoy the heck out of it 🙂

      • I wish there wasn’t a social stigma. Being a stay at home parent is awesome and something to be proud of. My mom stayed home with us and I have so many fond memories of the fun things she took us to do. Then once we were all school age she went back to work. It worked great for my parents and my mom has said many times that she wouldn’t change a thing. Kids are only babies once! If I had a different personality type and more patience then I might have chosen to stay home too. Instead, I am an OCD control freak workaholic. =)

  8. My wife has been an at home mom for 6 years now and we would not have it any other way. It has been tight for us as well but the day she goes back (next week actually part time nights), we are going to be killing it at that point.

  9. I feel you on this one. The house I live will need about 60k over the next 5-10 years to get it in great shape. The house has good bones but they are old bones(130 years). I should have listened to my gut feeling. We had one house inspector on a house we passed on and when I called to get him back the company told me they were sending someone else but that they were equally as good. They were not. I love the area though so I guess I am alright with putting the money into it…for now.

  10. We don’t have any kids yet and I know daycare would be a lot cheaper up here in Michigan than it is out there. One of the reasons why we are trying to get rid of our debts (including the mortgage) so fast is because we do want to start a family in a couple of years and we want the option of one (or both) of us being a stay at home parent. We haven’t decided who or even if we are going to do that, but it will be nice to have the option to choose. Great rundown on the financial side of being a stay at home parent. It’s good to see others experiences so we can learn from them.

    • That is a great goal to have. This was always a goal of ours, and we are truly blessed to be able to make it a reality. I hope you can reach that goal as well. heck, both being home would be pretty awesome as well, I’m nowhere near that option just yet 🙂

  11. When my wife stopped working to stay at home, I also included the gas cost of her driving to work. It was a 30 mile commute each way. It is not a huge amount of $$ saved, because she does drive around town. But hey, all the little things do add up. It is surprising what you don’t pay for.

  12. That is really impressive how much you can save. I’d love for my wife to be able to stay at home when we have kids but I’m not sure that will be able to happen. Only time will tell. $2300/month is a great amount of savings!

    • You should definitely crunch the numbers. We were surprised at the savings. Obviously, daycare was the biggest one, but the other things added up to a nice savings as well. And there are definitely other areas of savings, I just listed 5 of them here.

  13. Wow, good for you! I dream of being a SAHM (something I honestly never thought I’d want, I love my career) but it’s just not going to happen, not with this baby anyway. Even with the cost of daycare my income is too high and we have too much debt to pay off before we can justify my staying home. I am going back 4 days instead of 5 and hubby is hoping to work from home 1 day/week so we’ll only need childcare 3 days but we’ll see!

    • Catherine, you have a wonderful dream, and I hope you can see that reality, maybe not with this baby, as you said, but who knows 🙂

      Saving on 2 days a week of daycare should save you like $500 or $600 a month, so that’s awesome!

  14. Great article jake! I have enjoyed your newfound appreciation for budgets because I myself heart numbers. Couldn’t resist to call you out on your daycare estimates though. I know you are trying to justify your decisions, so a little generous makes sense, but in efforts of being non-biased and For all your loyal readers, I found this really cool site with breakdowns by state and type of day care.

    Seems like in your city, even with infant center based a more accurate statement would be average $1000 per month, not quite double that…food for thought.

    I’m glad you did this though, because it definitely seems at even 1500 a month savings (18K annually) or even at 2500(30K) it is hard to justify having second spouse working if they don’t make that annually. Granted, if they do beat it even barely, it is hard to justify taking much more than the early years off for child rearing considering even a 5K difference (23K nonbiased income or 35K generous income) over 10 years = 50K, a sizeable deposit in that same child’s college education if your child is truly that top priority. Years raising kids is very valuable, so like you said it will very by family income and family priorities where that cord is cut, 1 year, 5 years, 5th grade, HS, or never…

    Much love,

    • Thanks Drew for this awesome resource!

      After searching around a bit, it looks like our area would be about $300 a week, or $1200 a month or so for a regular daycare. To be honest, daycare was never something that we were going to make a reality, so we just did some basic searching to find our number. Also, if we had to, we would definitely be more interested in a nanny than a daycare and prices would be closer to the $2000 mark.

      Thanks again for dropping by 😀

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  17. I’d say the biggest cost savings from me being a SAHM come from eliminating most restaurant meals and daycare; however, the other biggie, in my opinion, is work clothing. I used to wear business casual/sometimes business formal attire to work and now I get by with workout pants and tank tops most days. Makes a big difference!

  18. Being a stay at home parent really helps a lot. very well illustrated by you. The benefits are double. Savings,true and also you get the wonderful opportunity to take care of your child.
    A great post indeed.

  19. I quit my job to stay at home with our son. He is now two, and I have no plans to return to work anytime soon- in fact, I am going to start watching another baby in order to bring in a little bit extra while staying home.

    We do spend less on groceries, gas, eating out, gifts at work, etc, since I left my job. And we use cloth diapers. And we don’t have to pay for childcare. BUT we also lost my entire salary and my benefits. So we now have to pay out of pocket for my health insurance. Also, if I was working and we were paying for childcare, we could claim that cost and reduce our tax burden (you can pay for childcare with pretax dollars.) And I was paying into retirement before I left my job, so we have lost that as well.

    We also lost the potential for me to be promoted and earn more money in the future. Even if I ended up just breaking even for a few years, I would have been gaining career equity and momentum. If I do return to work, I will have to start over from the beginning.

    It doesn’t seem like you took the loss of your wife’s salary into account here. When I factor that in, we are not saving money on me staying home. We aren’t losing the entire value of my salary since we save on childcare and other expenses, but we would definitely have more money if I was still working.

    Don’t get me wrong- I love being home with my son and my husband loves having me home. It is far less stressful for us than both of us working full time and having our son in daycare full time. But I would not say that we are saving money with this decision.

    • The post was more about the money NOT being spent as savings, not the net savings. You are correct we didn’t put my wife’s earnings in this post, at her request. Suffice to say, we were still savings money. The tax benefits help, but only offset SOME of the extra tax being paid when you are a two-income household.

      I think the best way to look at it is: With the lost money (in this case, about $2,300 a month), what is your TRUE hourly rate when working. Ours would be negative. Others might be a positive number, but something like $1.59 an hour. It wouldn’t be a stretch to say most people value their time MUCH higher than that.

      Thanks for your reply, and congrats on making a single income household work. It’s tough, not many people are that brave.


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