Finding Financial Balance: Tips for Work-From-Home Moms

Young woman working while her daughter draws beside her at home.

Having kids can be one of life's greatest joys, but raising them is expensive. When you're a working parent—especially one who works at home with less separation between your job and family—you might face additional challenges, on top of the motherhood penalty.

If you need some help getting your finances in better shape while juggling parenting, working from home and other obligations, try these proven tips.

1. Set Specific Goals

Sometimes, just surviving another day is a parenthood victory. But your future self will be grateful if you find time to set specific financial goals and make an intentional, realistic plan to reach them.

It's helpful to consider the timing for each goal so you can plan ahead. Think about short-term goals (new couch, back-to-school clothes), mid-term goals (family vacation in two years) and long-term goals (retirement, children's college).

Then, set a dollar amount estimate for each goal. Some simple math can help you determine how much you'll need to set aside each week or month to reach those goals.

2. Get Strategic With Savings

Now that you have savings goals, organize your money so you can easily track them. Consider using separate accounts for planned vs. unplanned expenses, and for goals with varying timelines.

Keeping your short-term savings in a high-yield savings account is one of the best ways to maximize interest while also keeping your money liquid in case you need it immediately. Having separate accounts for different purposes streamlines planning and helps you easily track your savings' growth:

  • Emergency fund: Set aside money in a designated savings account to help you avoid wiping out other savings or taking on debt when an emergency strikes. It's ideal to save three to six months of living expenses and leave it alone except in true financial emergencies, like a broken-down car or a surprise medical bill. If you do freelance work from home or otherwise have an unpredictable work situation, an emergency fund can be especially important.
  • Sinking fund: Use one or more savings accounts for planned expenses, opposite of an emergency fund. You could set up separate sinking funds for different goals, especially if they're on different timetables: for example, one for a short-term goal of summer camp for the kids, and another one for a longer-term goal of a family vacation in a few years.

Short-term savings are only part of the equation. Make sure to also utilize tax-advantaged savings accounts for retirement, such as 401(k)s or individual retirement accounts (IRAs). Saving as much as 15% to 20% of your income in your retirement accounts can make a big difference when you retire.

Also, don't forget about education savings accounts for your child. Even setting aside a small amount starting when your child is born or very young can add up to a significant amount over time.

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3. Consider Costs of Working at Home

When you work in an office, the computers, phones and office furniture are typically provided, along with utilities. Your employer may also provide perks like free snacks or drinks. When working from home, you may be on your own for some or all of these expenses, especially if you freelance or are a contract worker.

If your employer or clients haven't offered to cover or subsidize any of these costs, and they're adding up, inquire if there's any way for them to contribute. If not, you'll need to work those items to your budget. If you're self-employed or a freelance or contract worker, hang on to your receipts for work-related purchases since you may be able to deduct them at tax time, along with your home office.

If you're having trouble separating work from home life, it could also be worth inquiring if your employer will subsidize or cover the costs of joining a co-working space. It can enhance your productivity since you're not surrounded by household to-dos; it gets you out of the house around other people; and these facilities often provide office essentials like desks, internet and coffee.

4. Be Realistic About Child Care

Some parents new to remote working might be tempted to skimp on child care. After all, you'll be home all day, and you could save loads of money by having your little one home with you.

But pause and think honestly about whether it's really doable. It can already be hard for work-at-home parents to ignore household tasks while focusing on work. If your kids are also home, what happens if the baby cries during an important meeting or a toddler won't go down for a nap when you need to meet a deadline? Is your elementary schooler able to be independent between when they get home from school and when your workday ends?

It may be feasible, but before canceling child care to cut costs, think carefully about if it would put your job (and salary, and perhaps sanity) at risk. You could explore other ways to save, such as a nanny share or asking for help from family.

5. Create a Budget That Includes Fun

Working from home and raising kids isn't easy, or cheap. Making a budget gives you and other adults in your household a clear view of how much money goes in and out each month.

It may not seem like it, but budgeting can actually add more fun to your life. Here's how: By ensuring you're living within your means and your expenses are covered, you're able to build in room for things that add balance and bring you joy.

Say you create a budget and have money leftover each month after essentials. Rather than spending it without a plan, why not work the enjoyable stuff into the budget so you know there will be enough money for it?

You could make a budget category for family entertainment, a monthly date night, summer or vacations. Budgeting might feel restricting at first, but remember that it can help you reduce debt, reach savings goals, improve your credit and ensure you have enough money each month for your needs and your wants.

6. Maximize Your Money

Work-from-home moms can benefit from being on the lookout for ways to make money go further. Here are some ideas:

  • Utilize employer matches. If you work for an employer that offers a match for retirement contributions, take advantage—it's free money! Max it out if you can, but every little bit helps.
  • Take advantage of interest. Traditional checking and savings accounts earn very little interest. On the other hand, high-yield savings accounts, money market accounts and certificates of deposit (CDs) offer much higher interest rates, especially in this current economic climate. As you tackle savings goals, these accounts can make your money go further.
  • Reassess subscriptions. It's easy to end up with more subscriptions than you know what to do with, many of which you may not even use. It can help to use a subscription management and cancellation service, like the one offered through Experian, to see where you can cut back on subscriptions your family no longer needs.

Learnings for the Whole Family

Managing and improving household finances isn't a one-time task. It's an ongoing process that needs adjustment over time as expenses come and go. That's not always a bad thing: Once a child starts school, ending paid child care frees up budget space!

As you gain experience budgeting, saving for goals and working on other strategies mentioned, remember that your kids are watching. It's wise to take advantage of moments that can also serve as financial literacy lessons for your littles.

There are many ways to teach your child about money and credit. Once they're old enough, for example, you could tell them your budget for a grocery trip you go on together and have them help you pay attention to prices and the total. Have them look over your shoulder while you check your latest credit report. Bring them in on the process of mapping out costs of a family vacation and why it's important to save for it in advance. Knowing they're learning positive habits from you may help you stay even more motivated to keep up the good work.