StayHomePlan: Financial Planning Tool for Aspiring Stay-at-Home Parents

No. You guys cannot afford for your wife to be a SAHM - especially with a kid on the way. You're taking on way too much risk, and putting more eggs in the ESPP basket is just insane. If she's already a nanny, moving into a nanny-share role where she watches your kid and 1-2 others is much more realistic.

>So the plan would be to put ALL income (i.e. my actual monthly income as well as the ESPP chunk and the extra 2 paychecks a year) into an account, and pull our "monthly income" from that account. Say our set monthly allowance is $5500, so my $4268 income + $900 ESPP + $350 would equal $5518. So each month, the difference would be covered from taking bites out of the ESPP + extra paychecks chunk. Kind of a convoluted system, but at the end of the day, it would still be living off of just my income (not like I'm saying we'll constantly pull from our e-fund or anything like that). This would of course require savings contributions to stop (at least post-tax contributions like HYSA & Roth IRA). We would also ideally trim our expenses a bit; *I can see realistically trimming them by about $250 max, but this also isn't taking into consideration new expenses of having a kid* Ok i am at work so not really running numbers but this looks very confusing to me. First, do you guys have seperate bank accounts for post-tax/espp/retirement income? If so, I would strongly recommend combinging the vast majority (if not all) of post-tax/etc income into one account. It makes tracking way easier. Second, i feel like you are vastly underestimating the amount of costs for a baby. Diapers, formula (if needed), clothes, childcare (unless family members are helping out). It also gives you basically no buffer if you lose your job or arent getting raises like you expect. Overall, I don't think it is impossible to make a single income household work for you guys, but i think it would require a lot more slashing of discretionary spending. Based on skimming the numbers, I would recommend not planning on having your partner be a SAHM, but work on tightening the budget so she can work fewer hours. And if things go really well at your job, it can be on the table.

You would destroy her long term wealth and retirement and devastate her social security

As someone on the other end of a single income two child household, your plan needs a lot of work. Oh, and I'm a developer too if it matters. First, you're assuming your expenses will stay roughly the same. They won't. All of the following will likely increase: \- Medical expenses. Sure, there will be a bunch of wellness visits, but kids get sick, even ones staying home. Plus, your wife will need follow-up appointments post-birth. And what if there's an NICU stay or a bad bout of PPD for your wife? Medical costs can add up VERY quickly and could chew through what savings you have in your HSA in 12-18 months. \- Utility costs. Water, electricity, and heat will all go up. With your wife home, she'll have lights on more often. There will be more washing to do. There will be more bathing to do. Depending on where you live, costs to keep the living space at a comfortable temperature for a baby whose temperature regulation doesn't work well until they're 6-12 months old will go up. \- Food costs will go up. I mean, obviously because there's a third mouth to fee. Sure, initially, maybe your wife will breastfeed only but that will only last so long. \- Baby stuff like clothes, toys, shoes, blankets, sheets, cribs, etc. You'd be surprised how much stuff you'll need to furnish your home for the baby. Second, you did mention if constantly selling your ESPP shares would add significantly to your capital gains tax liability. And what if the shares drop before you can sell? Assuming the ESPP money is absolutely putting the cart before the horse. Third, you don't realize how much your wife will hurt her retirement prospects. Sure, if you file married joint you can continue to contribute to an IRA for her, but with $0 income of her own, that also means her expected Social Security amount won't grow either. Right now, my wife's estimated payment as my spouse is 160% of what she earned off her own income and that's half of what my payment will be. An additional restriction is that a spousal payment caps at what I could earn at 67 so even if I were to wait until 70 to collect, her max payment stops at my age 67 payment. Fourth, reentering the workforce is HARD. That large gap on the resume means she'll basically have to start over from the beginning, assuming she can get hired ahead of younger competition. Might be easier as a nanny, but still, there will be significant challenges to her going back to work. As such, you'd have to prepare to be single income for the rest of your life. So how did we do it? Easy, it was nearly 30 years ago and the world was a different place. We had help from family from time to time and our budget on my salary at the time still let us save the way we had been with some left over. We also got really (REALLY!) lucky in that my wife's employer was bought out. Her department was being eliminated but since she was pregnant and the optics would have been bad, she was offered a 44 week maternity package as severance. We had that entire time to get ready for a single income while not actually being a single income. At this point, while you're doing well at saving, that's only because your wife's nanny income is basically what you're saving. When you get rid of that, you won't be saving anymore and might even have to dip into savings. Not a great way to start out.