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Step 3: Realizing It’s Not Just About the Paycheck

In choosing whether or not to stay home with my son I really need to review the money that we will lose on a bi-weekly basis as well as all of the benefits that come with full time employment. Since my husband is self employed I took advantage of all of my employer’s benefits. They carried my life and disability insurance as well as dental and health insurance for my husband, son and I.

We can remain on COBRA for up to 18 months after my termination date, but the cost of medical and dental coverage is over $1450 a month! My employer will subsidize the employer portion for the first six months of my unemployment but after that we’ll need to pay the full amount. If I don’t return to work and remain on COBRA I’ll not only fail to draw a salary, but I’ll need to find an additional $17,400 a year to cover the cost of insurance! I know there are cheaper options out there, but for a family of three I’m not sure if we’ll get away with paying much less than $1000 a month, which is at least $12,000 a year.

I’ll also need to purchase my own life insurance policy. Surprisingly the insurance companies don’t seem to be too concerned with my past medical issues. They said high cholesterol and blood pressure are bigger red flags, but I won’t believe that until I have a policy in hand. I’ve been quoted rates as low as $500 a year for $500,000 worth of coverage. That’s not a whole lot of money to shell out, but it is additional money that we need to take into account.

The more I review the facts the more I realize that staying home to raise my son is not just about the paycheck that arrived every two weeks, but also all of the additional expenses that my former employment used to cover.


Sunday 29th of January 2012

Could you purchase a smaller amount of life insurance? Life insurance is a replacement for income; since you're not making any, your husband would only need money to cover burial costs, medical costs, and daycare. Also check out bundling - it can be cheaper. Like call your car, rental, or home insurance company - they might also sell life and will give you a discount since you already have an account.

One Frugal Girl

Sunday 22nd of January 2012

@Anonymous - Thanks for the comment. I have heard similar stories from other stay-at-home moms who said their marriages failed and they had no career to fall back. Although I love my husband I am concerned about this as well.


Tuesday 17th of January 2012

Here is a true story from the other side: I decided to stay home about three years ago after my second child was born. I had an excellent job with benefits that I quit. I had the support of my husband to quit. Immediately after I quit however, my husband changed drastically and began drinking heavily. His business, once lucrative, went into the toilet. We got divorced in October and now I am a single mother of two small kids working a job that is a lot worse than the one I had before. If anyone had ever told me this would happen, I'd never have believed it. My husband was a great guy! So, do whatever pleases you, I am just offering a flip side. If I could go back in time, I'd have kept my job. It is harder to get a decent job after a gap, and marriages change. If you do quit, try to keep ties to people in the working world and keep your skills current in some way.

One Frugal Girl

Tuesday 17th of January 2012

@Serendipity - I'm glad I can help.

@Cindy Brick - I am trying to find other avenues of income and possible part time work.

@Mrs. Pinchpenny - Health care does seem to be the big hurdle for us. Not only paying for it, but also making certain that it's good care! Did you get a job just for the insurance?

@WorkingMom - Thanks for the suggestions. I plan to check out all of them!


Tuesday 17th of January 2012

Check into the local Better Business Bureau, Rotary, and other groups to see if you can get a group insurance rate. My friend's husband owns his own plumbing business and they got a policy that covered big stuff with higher deductibles. Another friend (single mom with own business) got a group policy through her college alumni group.

As for life insurance, try SBLI (Savings Bank Life Insurance) - they tend to have the cheapest rates. If you can't stay home full-time, maybe something from home or part-time would give you enough to cover the insurance. It won't be easy, but it will be worth it!