Recognising the financial value of caring for your family

I was talking to a client of mine the other day. We were discussing how women often find themselves financially worse off than men, especially if they have had children. The gender pay gap is something that Emma wrote about a while ago. Women get pregnant, take time off work to look after the baby and are more often than not the ongoing primary carer. As a result, they are overlooked for promotions or have to go part time. This impacts their earning potential and in turn their pension contributions. As women usually live longer than men, their later years can, as a result, often be financially very challenging.

The main problem is that in our society, looking after family is still not valued as much as paid work. To be honest, caring in general is not valued much at all, even if it is your profession – you only need to look at the salaries we pay carers to know this.

And this brings me back to my client. A decade or so ago, she had her first child.  She received statutory maternity pay (a few hundred quid a month), but she was still making her half of contributions to the mortgage and household bills. This left her with no disposable income. Meanwhile, her husband, who continued to work full time, could afford to make the same contributions and still go out to meet friends, buy new clothes etc. Unsurprisingly, they realised this had to change.

Her husband wasn’t being deliberately tight. He’s a good guy and is always very generous. It was just as a couple they hadn’t thought things through – it was a completely new situation for them. Their household and work set up had completely changed but their financial set up had failed to keep up. This is not unusual. In fact, it happens in most families. The difference here is that they did something about it quickly – for many women this imbalance goes on for years, decades even.

They now have their finances arranged in a way that is fair and works well for both them. While her husband continues to work full time, she works part time and still earns less (they now have two kids). However, both their salaries are paid into their joint account where the money is pooled and used for all household bills, needs and wants – utilities, shopping, clothes for the kids, savings, holidays, restaurants etc. They also each take out the same amount to put into personal accounts to spend on what they want for themselves. They have personal pensions where their contributions are the same. Although the husband earns more, they are paid exactly the same amount. This may not be everyone’s ideal situation, but it is what works for them.

The important thing for the couple was that there was financial equity of course. But more importantly, that taking care of family was recognised as carrying as much weight as being the primary breadwinner. Her husband would not be able to progress in his career and work full time, if she didn’t take the lead role in looking after their children.

All too often, if a parent needs or wants to stay home to care for their family, this is expected to come at a financial cost to them. This shouldn’t be the case and it doesn’t have to be. All it takes is a conversation and a few very easy steps to bring in balance and give caring for your family the recognition it deserves.