Many women who make the decision to raise their family don’t realize they have a job. It may not be in formal employment and they may not get a paycheck at the end of every month, but raising children is not less meaningful than reporting to an office every day. However, most women will define themselves as not working. I met some women during an event to celebrate International Women Day recently. They are in this situation and were wondering where financial management comes in for them.
I had a chat with them and here are some of the insightful tips that came out of that conversation.
Many women who make the decision to stay home and raise children believe what they do is not a job. This makes it hard to become part of the financial decision making in their households.
The first thing women have to come to terms with is the fact that it is a job. A job that deserves no less recognition than your partners’ job in the official workplace. Once this fact is established, agreeing on financial matters becomes easier. This is because you now know you are not approaching this conversation from a point of disadvantage, something many people have felt over time. The foundation of this discussion is that if it was a joint decision. That you decided, one person should stay home and look after the children. The corresponding decision, therefore, is that money management discussions and decisions will be a joint affair.
One of the ladies I spoke to put it in these exact terms – “If my efforts are going into raising our children, your efforts are going into earning our money”. If you are about to stop working, then ensure that this conversation is had and agreed upon.
Let’s be clear about one thing, don’t assume it comes automatically. If you never had this conversation and feel disadvantaged when it comes to money decisions, the solution starts with this discussion. Remember, the value that someone brings into a family is not simply driven by how much money they earn. Once this foundation is established, you can work out the practical things you can do.
Every relationship is different. Come up with a system that works for you. Different people have done different things. If you find the system doesn’t work, change it. You can completely operate the funds as joint like “the salary” comes into a joint account and is withdrawn for the various needs.
Other couples feel that they need a certain level of independence. You may not want the amount spent at the salon examined with a magnifying glass. You can decide a portion of the salary goes into personal accounts for personal expenditure and another account for any bills every person is responsible for. For example, if you are responsible for getting the electricity paid, and I mean the physical effort of paying it, then the money for electricity goes into your account.
According to another lady, paying bills despite the fact that you did not directly earn the income, goes a long way. It creates assurance for both parties that the stay at home parent is contributing financially. It also ensures that you remain financially in tune with the household budget realities. When you are completely not handling bills (or not handling payment of the “needs”) you may have a skewed view of what financial resources are available for the “wants” in your life. You might think there is more or less money than what is actually available. This creates a burden on the person earning the income. I have met many men who have gone into debt just to please their spouses who do not understand the limitations of how much money they have at their disposal. Being on the same page creates easier conversation.
“If you can get this conversation right you may find yourself at a huge advantage”
I personally know a couple, let’s call them James and Maria. Maria stayed home when they had children. James earned the income but Maria used her time to research, learn, and network so that they could build investments. She formed relationships with banks that enabled them to access credit for some of the investments. Their investment portfolio has grown to the point that they have even hired an investment administrator to manage it. Effort is just as important as income. Even if James stopped working today, their investments would be able to sustain them.
Deciding to work at raising a family does not mean you are not economically productive. Especially when your children do not need you quite so much you can decide what the next steps are for you. The same skills you have used in raising a family are the same skills that can be used when you are ready to do what Maria did and invest, start a business or even go back to work.
Happy International Women’s Day ladies!
Waceke is the founder of Centonomy. If you want to know more about their program on Financial Freedom in Retirement get in touch on waceken@centonomy.comTwitter@cekenduati