Diana Clement: Stay-at-home spouse can add to coffers

The at-home partner or spouse is a slowly dying breed in New Zealand. But every year some people do give up their jobs to look after the children (or for another reason) and manage the house.

There are significant costs to being an at-home partner. They include:

* Increased economic vulnerability - it's a job-loss hedge if both partners are working.

* Reduced employability and market value when the at-home spouse returns to work.

* Stagnating retirement savings.On the other hand, costs involved with staying at work include:

* Childcare, which can be a real financial killer.

* Wardrobe.

* Commuting.

* Takeaway lunches.

Giving up one salary is not always the economic death knell some young couples expect. Instead of being financial dead weight, the at-home partner can make an economic contribution to the family in many ways. That may be by earning money, managing it, or reducing financial outgoings.

The most obvious way for an at-home partner to contribute economically is to get a part-time job.

Before you pooh-pooh the idea, see what your friends are doing. Some may have skilled work in their erstwhile industry, others may work Saturdays in a shop. The income adds up either way.

Self-employment can be more flexible because you choose the hours. I asked accountant Michael McCook of AccountabilityNet if he had any at-home clients who were "economically clever". His first thought was of several spouses making good money selling health products part-time from home.

I'm no fan of network marketing companies and don't believe in the self-medication people do to buy health products. I also don't like the idea that as a salesperson you have to spend hundreds of dollars a month in many cases on the products.

These companies work in similar ways. The individual signs up to recruit customers from their networks and sell the products. The real money comes from recruiting more salespeople, from whom you get a cut of every sale.

Cynical as I may be, I do have to admit there are people who swear by their businesses. McCook, who sees his clients' detailed financial accounts, can attest that some home-based spouses have been successful selling wellness and household products from USANA Health Sciences, Melaleuca and Life Force.

It's not unusual to earn $1000 to $2000 a month doing this working about 15 hours a week on average. These are people who have developed the skills to be successful at network marketing, says McCook. Not everyone is.

He has also seen clients who have developed and honed business skills by selling through these network marketing companies when the children were young and have gone on to use what they learned to leapfrog into business at a later date.

One advantage of network marketing is it is home-based, so it has tax advantages.

As soon as you set up a home office, it becomes tax deductible. That means, for example, if your home office is 10 per cent of the floor space of your home, that 10 per cent of costs such as power, tea, coffee, mortgage/rent and maintenance become tax-deductible. This can add up to a few thousand dollars a year. A cut of your vehicle costs also can be deducted.

Other home-based businesses qualify for the same tax savings. And the types of part-time businesses that can be run from home are very diverse, depending on your skills. Some common ones include computer repair technician, mobile beauty therapist, business or career coach, catering, or tutoring.

Where the main breadwinner is self-employed, the at-home spouse can become a paid employee of the business. This lowers the gross income of the self-employed person, which has tax advantages too.

If planned well, the at-home spouse can also qualify for KiwiSaver. Indirectly this increases the household income through the Government contributions, although it is put away for retirement.

McCook also has clients where the at-home spouse manages a portfolio of property rentals. The property management side of that will save about 8 per cent of rent, which would otherwise be paid to a property manager. On a $350-a-week rental that's $1456 per year.

Other savings can be made if the spouse can either do maintenance and repairs on the property or organise them more cheaply than a property manager might.

Some spouses will also be good at actively growing a rental portfolio (or any investment portfolio).

The stay-at-home spouse (or partner) can make a huge economic impact on the family budget. Most people simply don't know where their money goes. Once they do, they can begin to make changes.

Learning to budget if you can't already can make the single family salary go further and can help with the move from two incomes to one.

Plenty of families can save $50 a week on food - or $2600 a year - from what I see in their trolleys at the supermarket. Most would probably eat more healthily on a reduced budget. Simply making lunches for your working partner can save $1000 a year or more.

There is a lot an at-home partner can do to streamline family finances.

It doesn't take long if you tick off one task a day or two, such as reviewing insurances and cancelling unused memberships, to get through an entire financial tune-up.

Having two children myself I do know that the at-home partner doesn't do nothing all day. But it's possible to manage your time to squeeze in all sorts of activities around your children. I used to do two to three hours's work a day when they slept in the middle of the day or after they went to bed at night.

A friend pointed out that the at-home spouse can save bucket-loads of money on house renovations. One Devonport mum I know - let's call her "Jane" - project-managed the family's house extension and saved many thousands of dollars in architect fees alone.

Jane was on the spot day in, day out to make decisions for the builders so that they didn't have to wait around or, even worse, redo work.

"It meant decisions could be made quickly and mistakes didn't happen so easily," she says.

Jane could also spend time shopping around for supplies. For example, she visited reclamation yards looking for recycled kauri floorboards. The builders started giving her lists of items to buy.

The amount of money she was saving hit home when she asked the architect to source some tiles and was hit with a $202 bill just for his time.

Jane also recouped thousands of dollars selling off old windows and doors, the old kitchen and other unwanted items on Trade Me.

"I made thousands of dollars selling off the old crappy windows that would have gone in the builder's skip otherwise," she says.

An organised at-home spouse can also sell off unwanted goods around the house. There are thousands of very enterprising spouses doing just this on Trade Me.

It's hard to make a business of this on Trade Me that would compare to returning to the paid workforce if you have a professional job. But if you're going to be home anyway for several months or years, it makes sense.