(ARA) – Have you ever put a dollar figure on how much the stay-at-home parent in your household would earn for all the jobs they do? Or how about the adult child who is now caring for aging parents or other relatives?
So how much is a stay-at-home parent’s work really worth? According to Salary.com’s 2010 Mother’s Day Paycheck for Mom’s Job, the time mothers spend performing 10 typical job functions would equate to an annual salary of $117,867 for a stay-at-home mom.
Historically, families often undervalue the primary caregiver’s contributions, and that can lead to some troublesome circumstances in the event that there is a disability or unexpected death and the caregiver’s contributions are no longer available to the family.
The result is that many “stay-at-homers” have been inadequately accounted for in family financial plans, leaving both the financial and emotional stability of the family at even greater risk if funds aren’t available to help cope as a family rebuilds.
“When I talk to families who have made the decision for one parent to stay home, I’m surprised by how often families overlook the value of the work being done by the family caregiver, whether that’s a man or a woman,” says Kelley Gay, assistant vice president, Market Development for Massachusetts Mutual Life Insurance Co. (MassMutual). “Trust me, as a working mother, I know how many different hats that caregiver is wearing all at the same time, including caring for and nurturing kids emotionally, physically and intellectually, cooking the family’s meals, cleaning the house, racing in between playing with the kids and keeping the laundry moving along, running errands and driving all over town in the same pattern three times a day! The truth is that if you had to pay for each of those services, the cost can be exorbitant – even prohibitive. Families today need to make sure that they not only think about the value of the hours that are being worked out of the house, but also consider those hours being put into working in the home – and actually assign the true combined value that they’re worth.”
The demand for more information about the role of stay-at-home dad has also led to other studies, in addition to Salary.com’s. About 25 percent of America’s preschoolers are cared for by dad while mom is at work, according to the U.S. Census Bureau. In addition, 234,000 school-aged children are watched over by 140,000 fathers who stay at home.
Families reviewing their financial plans should look at the value a caregiver provides the family, and plan for an insurance policy that gives the family flexibility if something were to happen to the caregiver.
“Once a family takes a deeper look at both the value of the wage-earner and the caregiver, depending on the family’s needs, a whole life insurance policy can be a good fit. A permanent policy that provides coverage for the entire life of the owner, may also help create flexibility for the family through its cash value build-up in ways that can provide benefits to the family while the caregiver is living,” Gay says. “I have found that in many cases, a combination of term (or temporary coverage) and permanent insurance may be the ideal answer for growing families who need the coverage but also want to start the process in an affordable way.”
Gay suggests families also consider discussing other financial planning topics when formulating a well-rounded plan, including:
* Creating an emergency fund and developing a budget that both parents can commit to.
* Creating a will and assigning guardianship of the children.
* Defining and addressing retirement income needs.
* Preparing a college savings plan.
* Caring for loved ones, including preparing for long-term care needs.
“As a parent myself, I understand that discussing unforeseen life events can be unsettling. But not having that important discussion can leave families unprepared and truly in a place we hope a family never will be – without options,” says Gay. “Working with a financial professional can help families leverage tools like whole life insurance that can offer a solid sense of security for any family.”
