What Is a SAHM and Is It Right for You?

Whether or not to become a stay-at-home parent once baby arrives can be a difficult decision. Welcoming a little one into the world is game-changing in so many ways. New moms and dads are quickly faced with a variety of decisions about their finances, career goals and even social plans. 

One of the biggest questions many new parents must contend with is whether or not one of them will hit “pause” on their professional path and become a stay-at-home caregiver. Here, several key points to consider if you’re debating between becoming a stay-at-home-mom (SAHM) or going back to work.

What does SAHM mean?

SAHM stands for stay-at-home mom, a caregiver who typically focuses on child and family care while a partner works professionally. You might also come across SAHP, or stay-at-home parent, a term that also includes stay-at-home dads.

You’ll often see the acronym SAHM on parenting websites or in online forums, like the What to Expect community. 

The percentage of stay-at-home moms

More than 11 million U.S. parents — or 18 percent — did not work outside the home, according to the most recent Pew Research Center analysis of U.S. Census Bureau data. The number of stay-at-home moms today is similar to statistics from 1989 (27 percent of moms stay home now, compared to 28 percent then), but these days, more dads are staying home too. About 7 percent did in 2016, up from 4 percent in the late '80s.

But while the number of moms who choose to stay at home with their little ones has remained mostly consistent over the years, there are more factors than ever for parents-to-be to think about when making this decision. 

Becoming a SAHM

Just as with any office job, the role of SAHM comes with a variety of day-to-day tasks and big picture responsibilities. Of course, every family is different, and there's no "right" way to be a SAHM. 

In general, though, you will likely be running the show when it comes to child and family care. Think: taking the reins on school pick-up and drop-off as well as extracurriculars, scheduling appointments and shopping for kids’ clothing. Over time, you may be working closely with your little one on hitting certain milestones related to their development.

Many SAHMs also handle housework (such as cooking, cleaning, laundry and grocery shopping), overseeing household finances (creating and managing the family budget) and handling the family’s social calendar. 

These parameters can vary, of course, depending on what works best for individual families. For instance, in some two-parent households, a working partner might enjoy grocery shopping, meal prep and cooking, so they take on those tasks exclusively — or share it with the stay-at-home partner. 

From doing the dishes to overseeing the kids’ morning or bedtime routines, just about any chore that’s traditionally assigned to a SAHM may be more efficiently completed when a couple decides to divide and conquer. That’s why it’s imperative to have a candid discussion about responsibilities and expectations with your partner while making this decision.

Your financial situation as a SAHM

If one parent’s income is less than or equal to the cost of childcare, staying at home can feel like an obvious choice, as long as the other parent’s salary can cover your family’s cost of living. But if your childcare costs are significantly less than your paycheck, you’ll want to ask yourself other questions about your finances, such as:

• Do we want to have another child, and might I want to stay at home after the birth of baby number two? If so, going back to work to build up savings beforehand might come in handy.
• Do we hope to retire early or buy a house? If yes, continuing to work may help you reach those financial goals sooner.
• How can we reduce our household expenses in a way that would make it easier for one of us to stay at home?
• Will we have enough of a buffer to pay for unexpected costs, such as an ER bill or expensive home repair?

Retirement benefits and social security as a SAHM

Retirement may seem like a long way down the road, but your decision to stay at home could impact your savings. If your current employer makes contributions to a pension or 401K account that you’ll be missing out on, you’ll want to factor that into your long-term financial planning. 

You’ll also want to think about the effect staying home might have on your social security retirement benefits. Experts note that the amount you pay in Federal Insurance Contributions Act (FICA) taxes each year is a function of how much you make. A percentage of your income (15.3 percent) up to a specified wage base is applied to FICA taxes for retirement, life and disability social security benefits; you pay 6.2 percent towards social security and 1.45 percent for Medicare tax, and your employer pays the other 7.65 percent.

When it’s eventually time to claim your social security, the size of your benefit is based on the number of years you paid FICA taxes. Generally, you must pay into the social security system for a minimum of 10 years to qualify for retirement benefits. The amount you receive in retirement benefits depends on the average of the 35 highest years of payments into the system. Your years spent as a SAHM could translate to zeros in the social security work records, and, in turn, potentially reduced retirement benefits. However, spouses are eligible for social security even if they don’t qualify on their own.

Stepping out of the workforce as a SAHM

If you’re already on your way out of a job you dislike or have been laid off, you might feel that stay-at-home parenthood chose you. For others, leaving the workforce is a conscious decision.

If you’re on the fence, reflect on what you might miss about your job, whether it’s career advancement, professional fulfillment or being part of a team. Some companies might allow you to keep one foot in the workforce when you become a parent — perhaps going part-time or working remotely — which could make the decision feel less all-or-nothing.

If you plan on reentering the workforce later, think about how you’ll maintain your skills and stay on top of shifts occurring in your industry. Will you attend seminars, take online courses, opt for continued education, listen to podcasts or read publications related to your field?

Maintaining your professional connections is also key. A LinkedIn survey found that as many as 85 percent of jobs are landed through connections, so staying in touch with former colleagues during your time as a SAHM can be smart. Think attending in-person networking events, catching up with old coworkers over email or coffee, or even working freelance jobs here and there.

Talking to your partner about becoming a SAHM

Although it sounds like a no-brainer, if you have a partner, it’s important to be on the same page when making this decision. For example, you’ll want to be forthcoming about any financial concerns either of you have as you enter this next chapter. 

You’ll also want to make sure you agree on future plans that could impact your finances and lifestyle, such as how you’ll handle big ticket purchases like vacations, how much you’ll contribute to savings and whether or not you hope to have more children. 

The ultimate impact of becoming a SAHM — or not

It’s possible that the decision to become a stay-at-home parent — or not — will set off a flurry of opinions from loved ones, friends, neighbors and even strangers. Some SAHMs report feeling as though only some people were supportive of their decision. But ultimately, this decision is yours and your partner’s to make.

Whether you choose to become a stay-at-home parent, continue working or figure out something in between (such as working part-time or from home), rest assured that you don’t need to stress about the short- and long-term impact on your little one.

Research from Harvard Business School found that children of working moms grow up to be just as happy as those of stay-at-home moms. Previous studies had also shown that young children and teenagers do just fine when their moms work, so hopefully this recent research offers additional peace of mind for working moms.

Ultimately, the choice to exit or remain in the workforce is a deeply personal one, and what’s right for one family may not work for another. In the end, all you can do is make the decision that best suits your family and personal situation.