Here’s What You Need to Consider Before Quitting Your Job to Become a Stay-at-Home Parent

The cost of child care has risen sharply over the years, adding to the financial burden on Americans. According to a KPMG analysis, the cost of child care has increased 263% between 1990 and this year. Another 2023 study from LendingTree found that the national average cost of raising a child is about $21,681 per year. So, it may seem logical and economical for the lowest-income parent to stay home if their salary is in line with the cost of child care they would otherwise have to pay. However, the day-to-day costs of child care aren’t the only thing to consider before quitting a job. Taking a break from work has several long-term consequences that parents should consider.

Gaps in CV

A gap in your resume is an immediate and compelling complication for a stay-at-home parent. While career breaks are becoming more acceptable, many companies still view them as a red flag, Emily Green, head of wealth management at Ellevest, told CNBC Make It.

So when parents decide to return to the workforce, they may have a hard time finding a job they deserve. Even for mothers who don’t necessarily take a break, it may be harder for them to get a promotion at work, according to a Harvard Kennedy School study.

Carry the burden

In many cases, the burden of staying home falls on the mother, as men typically earn more than women. While the proportion of stay-at-home dads has increased, the majority, 82%, of those parents are still mothers, according to Pew Research. In many households, Green says, mothers are quitting their jobs simply because their paychecks don’t cover child care costs.

Green added: “In households where there is a little more financial flexibility, women often don’t think about what they might be giving up in the long term, say 5 to 10 years, by leaving their job now.”

Missing out on pay raises

Employees typically receive a modest pay raise of around 2-3% per year. While this may not seem like much, it adds up over the long term. So people who stop working or take a break don’t get raises or benefits.

Additionally, with the burden of staying home falling primarily on mothers, they’re likely to pick up where they left off. Mothers already face challenges in the labor market due to the widening gender wage gap. According to a Bankrate analysis of data from the Census Bureau’s Current Population Survey, mothers earned 31% less than fathers in 2023.

Financial compromises

When people choose to leave their jobs, they not only lose their immediate income, but also the potential for growth in that income, as well as future retirement savings. In a CNET report, financial expert Farnoosh Torabi illustrates the example of a 32-year-old woman earning $60,000 a year. If she stops working for five years to care for her children, she will lose about $300,000 in take-home pay. However, she will lose an additional $400,000 in salary growth and retirement benefits, bringing the total cost to about $700,000. For those looking to calculate the long-term costs of full-time caregiving, the Center for American Progress’ calculator may be helpful.