Here is a wonderful blog post by Penelope Trunk about how to answer that question, which is (I know) difficult for many stay-at-home mothers.
How you answer the question “What do you do?” is important because it frames your story for you in a much more visceral way than it frames it for anyone else.
When I told people I was decorating the house, they were happy for me. And worried for me. Because I am not going to make a living as a decorator. But the best answer to the question “What do you do?” is “Here’s what I’m passionately learning right now.”
If I had answered in a way that focused on my worries about not knowing where my career was going, then there would have been nothing to talk about. But when I answered in a way that revealed my excitement about the house and everything I was learning, then there was a lot to talk about.
I tell you this to show that everyone has trouble answering the question at some points in their life, but the more comfortable we are being lost, the faster we can get unlost, and this is a good example of why—you can tell yourself better stories about yourself.
So here are some steps to help you get better at the process of answering the question “What do you do?”
She gives seven tips for coming up with the right answer for you -- which come down to re-framing the question as "What are you doing or learning right now that makes you different from everybody else?" Well worth a read.