Are you financially able to be a stay-home parent in Malaysia?

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Every new parent would think of it, you probably would too. Have you considered becoming a stay home parent? It is not a question about not working but spending more time to take care of your child because it is too tiring to work at the same time.

Not as easy as thought

Making the decision to stop working is not something that comes about every day. Putting the financial commitment on your spouse while you stay home can be exhausting physically and psychologically. It affects everyone in your family. While a lot of parents are thinking about this, perhaps you should consider the following before taking the plunge.

  • First, calculate your household income and then work out your expenses
  • This includes your commitments like insurance, mortgage/rent, bills, etc. You must also include your expenses like holiday trips, shopping, entertainment and such.
  • Then, calculate the difference.

Now do the same but base it on the amount of your income if one parent is not working.

Making the decision

Let’s say the household income for both working parents is RM200,000 and your expenses are RM180,000 per year. That means you have an extra RM20,000. But if one parent is staying home, the household income becomes RM140,000. That means you are short of RM60,000. That is quite a heavy amount.

However, you can take into consideration that if one is staying home, childcare expenses will be reduced. So that means you could take out about RM10,000 for the year which means you are about RM50,000 short. So, what’s next?

Reworking your expenses

The concept is simple. You will now need to reduce your expenses. The decision to stay home would require planning. Note down everything you spend on in a month and see which areas can be cut. This might include moving to a smaller apartment (which reduces the expenses significantly). You might consider renting out your home and then renting a smaller place.

  • Priorities – You might have to forgo your annual overseas trips to a smaller scale and not spending too much on entertainment. Typically, it is about moderation there.
  • Emergency fund – Since you are going to have a single income, it is very crucial to have a larger emergency fund.
  • Monthly budget – This is the time to see how you can spend less on your monthly expenses including your internet and mobile data bills, groceries and toiletries.
  • Side income – Since you are going to be at home, it does not mean you stop earning altogether. There will be ways to find income somehow. Think about doing something freelance or make videos. It will start small but could be substantial eventually.

So, what is it going to be? You can afford to be a stay-home parent if you manage your finances properly and is disciplined enough to follow the plan through. It would take a psychological toll on both of you because at some point you would be exhausted. At the end of the day, it is giving your child the attention and care he needs while having a more fulfilled family life for everyone.

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