Many couples struggle with the decision to stay at home with children or continue their careers. A tradeoff is made harder by the fact that not all the pros and cons of either decision can be measured in dollars and cents.
My wife and I have been fortunate that during the beginning years of our four kids’ lives, we had a great family support structure that helped care for our kids. While our situation has changed over the years, we have always wrestled with the decision as to whether one of us should stay home or not.
An Emotional Balance Sheet
As Carl Richards points out in his article, An Emotional Balance Sheet Can Guide Hard-to-Quantify Financial Choices, having a parent that stays at home can be a real luxury that not all families can afford. The best piece of Carl’s article is that “I simply want us all to become aware of the need to write down our choices and assets even if they seem to defy calculation. Think of these items as lines on your emotional balance sheet.” This thought, however, can be applied to just about any emotional decision in life and not just who would stay home and raise children.
Carl goes on to say, “If we limit our view to what can be measured in dollars, most of what brings us happiness could be defined as bad financial decisions. Travel, time with friends, or long meals with parents could all qualify (or be disqualified, as the case may be) unless we’re also weighing the benefits that we can’t enter into a calculator. Real financial planning must acknowledge that reality.”
This last point is precisely why when I work with families to develop a wealth management plan, I talk just as much about life purpose as I do financial objectives. In my view, the planning process begins with envisioning the life you would like to have and then putting together action items to help make that life a reality.