If you're considering the exciting journey of starting a family, you’ve probably asked yourself this one big question: Can one of us afford to stay at home while the other works? While the idea of staying home with your kids sounds like a dream, it’s not always that simple, especially with today’s cost of living. So, can it actually work out cheaper for your household finances if one parent stays at home? Let’s find out!

Step 1: Let's Talk Income First thing’s first: How much are you both bringing home every month? We’re talking net income here—after EPF and taxes. Make a list, and then think about what your household income will look like if one of you quits your 9-to-5 job. Will there be any side gigs or freelance work to bring in extra cash?

Let’s assume the stay-at-home parent can earn a side income of RM2,500 per month through freelancing. Here’s how the numbers might play out:

• Both parents working full-time
  Net monthly income: RM6,500 (You) + RM4,500 (Your spouse) = RM11,000/month
  Annual household income: RM132,000

• One parent stays at home (with side gigs)
  Net monthly income: RM6,500 (You) + RM2,500 (Your spouse’s freelance income) = RM9,000/month
  Annual household income: RM108,000

Step 2: Time to Tackle Expenses Now for the fun part: what’s your monthly spending like? If you haven’t been tracking your expenses, now is the time to start! Write down everything: home bills, childcare, food, car payments—the works. If you’re unsure, spend a month or two tracking every single expense.

Let’s break it down into categories:

Home expenses:

• Mortgage/Rent: RM1,300/month
• Car loan: RM1,500/month
• Utilities, insurance, groceries: RM1,830/month
• Miscellaneous household bills: RM250/month
• Annual home expenses: RM67,400

Childcare expenses (for working parents):

• Nanny/Babysitter/Daycare: RM1,400/month
• Annual childcare expenses: RM16,800

Work expenses (for the potential stay-at-home parent):

• Transport, meals, work attire: RM1,300/month
• Annual work expenses: RM15,600

Other family/household expenses:

• Vacations, celebrations, child-related, medical, etc.: RM25,000/year

Total annual expenses with both parents working full-time: RM124,800
Total annual expenses with one parent staying home (after eliminating childcare & work expenses): RM92,400

Step 3: Crunch the Numbers Now, let’s get to the heart of the matter—can you make it work on a single income?

• Annual household income with both working full-time: RM132,000
• Annual household income with one full-time parent (plus freelance income): RM108,000
• Annual expenses with one full-time parent: RM92,400
• Amount you're short (or ahead): RM15,600

In this case, the family is still in the green, even with one parent staying at home! But keep in mind, this example is based on a family with only one child in preschool. More children or additional expenses could change the equation.

How to Make it Work: Tips for Living on One Income

1. Cut the Fat:
   Look at every dollar you spend and ask yourself—do I really need this? Could you downsize your home? Cook more meals at home instead of eating out? Every little change counts!

2. Prioritize Wisely:
   It’s time to get honest about your priorities. Do you really need that new car every few years? Or maybe a staycation instead of an international trip? Think about what truly matters and what can be sacrificed.

3. Build a Contingency Fund:
   Unexpected expenses happen. A larger fund means you won’t have to rely on credit cards in case of an emergency. This is crucial when you’re living on a single income.

4. Stick to Your List:
   Make a shopping list for everything—groceries, bills, essentials. Stick to it. Don’t leave the house without it!

5. Rework Your Budget:
   A dual-income household budget is different from a single-income one. Rework it according to your new income and updated expenses. Don’t forget to set aside a little “fun money” for you and your partner—everyone needs a little freedom!

6. Get Creative with Income:
   Being a stay-at-home parent doesn’t mean you can’t earn! From freelancing to selling homemade treats, there are endless ways to make extra money. Plus, you’re not contributing to EPF or taxes anymore, so make sure you’re planning for retirement on your own!

Final Thoughts
Deciding for one parent to stay at home is a huge decision—financially and emotionally. But with the right planning and adjustments, it’s totally possible! Make sure both you and your spouse are on the same page, financially prepared, and ready to make the leap into a single-income household. After all, sometimes the rewards of more family time are worth more than a paycheck.