The money moves to make before you become a stay-at-home mom
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Leaving work to raise your kids is one of the hardest, most personal calls there is. Before you make it, here's how to protect your financial future, according to a divorce attorney, a therapist and a wealth expert.
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Belle Burden had a Harvard degree, a law degree from NYU and a husband she trusted when she stepped away from her legal career to raise their kids. Twenty years later, she discovered he was having an affair. He told her he was leaving, and within six years she became the center of one of the year’s most talked-about books.
Strangers, Burden’s memoir, debuted at number one on The New York Times bestseller list and set off a wave of conversations, some hushed and some very much not, about what women give up when they step out of the workforce—and what protects them if they are financially dependent on a marriage that unravels. Burden is a Vanderbilt heiress with family money to support her. Most women are not.
Stepping back from paid work to raise kids is one of the hardest decisions many moms will ever make, and for plenty of families it’s the right call. It’s also a financial risk that’s easy to underrate given all that’s on the line. “You’re putting yourself in a position of being completely financially dependent,” says Jacqueline Newman, a Manhattan divorce attorney and author of The New Rules of Divorce. That dependence, she says, quietly shifts the power in a marriage in ways that may not register for years. Newman tells clients to plan for what she calls the three D’s: divorce, disability and death. You don’t have to expect any of them to prepare for all of them.
The real cost is bigger than the paycheck
In a country where child care can cost more than a monthly mortgage, many families decide it makes financial sense for one parent to stay home and take care of the kids. But it’s more than your current salary that you’re sacrificing if you decide to step back. “You’re only looking at today,” Newman says. “You’re not looking at having a pension in that many years, or health insurance, or the things you build throughout your working life.”
Those are the costs that compound. Leaving work halts your retirement contributions and employer match, erodes your future earning power and put an end to job-tied benefits like disability and life coverage, says Adrienne Penta, National Head of Wealth Management at SCS Financial. Social Security takes your 35 highest-earning years into account, so time at home registers as zeros that lower your check for life. A Columbia analysis of two decades of family earnings found that women’s incomes roughly halve after a first child, including among women who’d been the higher earner, and the Institute for Women’s Policy Research ties close to 80 percent of the gender pay gap to the motherhood penalty, the systemic disadvantage in wages, perceived competence, and career advancement that women face in the workplace after having children.
The cost that tends to get overlooked, Penta says, is time. Time away from earning, building skills and staying connected. Newman is quick to point out the struggles of re-entry. The job you were good at 10 years ago may not exist in 10 more, she says, and AI is set to widen that gap for anyone who’s been out of the workforce.
Stepping away isn’t just a decision about income, says Kimberly Miller, a divorce attorney, therapist and financial planner who founded the divorce-education site PartWise. It impacts earning power, retirement, Social Security, credit, identity and a woman’s standing in the marriage. Given all that’s at stake, she tells couples to treat staying home as a major family investment rather than one partner simply giving something up.
How stay-at-home moms can protect themselves financially:
Finance experts can provide guidance, but the decision to put your career on pause often includes intangibles, like the opportunity to spend more time with your family. Everyone is operating under a different set of circumstances and priorities. Still, they recommend making the decision with your eyes open and protecting yourself against a worst-case outcome.
- Get out of the financial dark. Know what the family earns, owns, owes and spends, and where the accounts and documents live. “You cannot understand what you do not see,” Penta says. Newman is more blunt, telling clients to know the passwords to every account, because burying your head is how a spouse’s spending or debt quietly becomes your problem too.
- Put money and credit in your own name. Keep a card and a credit history that are yours, hold cash you can actually access, and fund retirement for the non-earning spouse through a spousal IRA. This isn’t meant to create a secret escape fund, but to make sure one parent doesn’t go financially invisible because her work is unpaid, says Miller.
- Have the money conversation out loud. The convo Penta wishes every couple had before one parent stays home is a plain one: How will we make decisions about money in this family? Name who controls what, and what happens if the marriage ends or someone dies. Newman argues a well-done prenup is a decent version of that same talk. You wouldn’t go into business with someone without knowing how they handle money, and marriage is a business partnership too.
- Know what a prenup or postnup can and can’t do. A postnup can set terms once you’ve actually stepped back, when the sacrifice is real instead of hypothetical. But “leaving the workforce” clauses are hard to write and easy to game, Newman warns, and what holds up varies by state, Miller adds. Don’t count on the courts to make you whole. In Newman’s experience, spousal support has been trending shorter and stingier for years.
- Insure against the other two D’s, and keep your earning power warm. Make sure you have life and disability insurance Newman flags. Keep your licenses and certificates current, stay in touch with your field and consider taking the occasional piece of paid work so returning later is easier. Think of earning power as an asset worth maintaining even while you’re not using it, Miller says.
The need for systemic change
The US doesn’t make this call any easier. It’s the only wealthy country without national paid parental leave. Only about 1 in 5 workers get paid family leave through a job, even though 82 percent of Americans say they want a national policy, according to the Bipartisan Policy Center. Workplaces that still expect total availability, late nights, travel, no visible caregiving, push mothers out fastest. In STEM fields, 43 percent of new mothers left full-time work within a few years of having their first baby, nearly double the rate for new fathers. Motherhood still reads as a liability in a lot of workplaces, which is why the private safety net you build for yourself carries so much weight.
Burden came out of her divorce cushioned by money most women will never have, in a country that offers parents little help and a lot of judgment. Staying home may be the right choice for your family. Just be certain to do it with the full picture, not just the parts that feel urgent right now. “You should not have to trade financial agency for caregiving,” Miller says.
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