Should I Stay Home or Should I Go?

by Robin

What finally opened my eyes to the value of spending wisely was this decision: should I stay home with my baby after my maternity leave? Or should I go back to work?

Ultimately, I chose neither and both. With a lot of reading and spreadsheeting and planning and fretting and negotiating I was able to craft a plan that would suit my need to be a hands-on mother and a wage earner. I wanted to work part-time.

With more expenses than before baby and less working hours to pay for the expenses, some fancy financial footwork would be required. Here's the steps I went through:

1. Set the goal.

My goal: working part-time, specifically half-time.

2. Track spending. 

I started this by tracking our spending for a month, then two, then three. (I have actually never stopped. The information gleaned from recording our spending has been incredibly valuable. I will go on and on about this in the future.)

3. Track money coming in. 

It's really less difficult than it sounds.  The credit side of any bank statement usually has much fewer lines than the debit - even now that we spend smarter.

4. Are we living with our means?

Subtract #2 from #3.  At first we were spending more than we were bringing in. This had to change.

5. Set a budget. 

Create a spending plan.  Make #4 as close to $0 as you can.

6. Do everything within your power to stick to the spending plan. 

Always keep your goal in mind.

I was also rewarded for my obsessive online research with a great website find. Today's Parent magazine has a great calculator called, "Can You Afford to Stay At Home". No matter how I put the numbers into this calculator, we needed to learn to spend much less if we were going to live the lifestyle we wanted.

The goal was achieved - I went back to work half-time AND we started paying down our debts. With some planning and care I was able to answer my question, "Should I Stay Home or Should I Go?" with a resounding, "YES!".

Falling into the Pool of Debt

I used to be that smug person who paid off their credit card balance each month. I had cash to top up my RRSP each year. I spent hundreds of dollars each month on new clothes. I knew the menus from all the local restaurants off by heart. I didn't really think once, let alone twice, about spending. Now I think wistfully about what I could do now with the money I blew on luxuries. I could buy groceries for a month for my family of four, for what I paid for the leather satchel I thought every professional woman needed.

But, my lifestyle of spending more time spending, than planning to spend, went the way of the dodo once I became...a mother? Did you think I was going to say mother? No, I needed to tighten my belt when I became the sole breadwinner for our family of two. My husband made the wise decision to change careers and I made the even wiser decision to support him in doing this. The challenge was, our lifestyle was "living two paycheques to two paycheques", now we had more expenses (tuition, gas for the commute to teacher's college, etc) and one lonely paycheque. What was also limiting our "lifestyle" was that we had the opportunity to buy the only house I wanted to buy - my grandparent's property - only this offer to buy had a best before date: during my husband's schooling. So we were in the less than enviable (though short-term - or so we believed) position of spending more than we earned. We learned a lot of good lessons through this year and made some dumb mistakes. I think because this situation seemed short-term we didn't fully embrace the frugal lifestyle. We ran up credit cards, we carried balances, we considered cashing in RRSPs (but I still spent hundreds on clothes each month - Silly Young Me). I was sure that we'd get on top of the bills. But we didn't. We were paying hundreds each month on credit card interest.

In the end things turned out well. My husband graduated teacher's college and he is a talented teacher who enjoys his job. We bought my grandparent's property and have since given birth to 2 children here. We paid off those credit cards. I no longer spend hundred on clothes, but I also don't really want to. I'd rather climb out of the pool of debt, than drown in it wearing a fashionable bathing suit.