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How To Go From Two Incomes To One
By Mommie | November 20, 2008
I was in the corporate world long enough to be laid off twice. What a wonderful feeling, going from knowing where your next paycheck is coming from to hoping to God that the unemployment check arrives fast enough so you can pay your rent. With today’s economy in the toilet and continuing down the sewer line, let’s go over how to deal with it if you or your partner gets hit with the lay off…
When I got pregnant with my son, I was making bank. Hated my job mind you, but I was making hand over fist cash. BMW in my garage, anything thing I wanted in the house. My husband makes good money, but he’s still a full time student, so we are still waiting for the fruits of his labor to kick in fully. I had decided not to stay home with the kids, I mean, why would I. I have my MBA, I’m a corporate rock star (delusions of grandeur to be covered on another post), I didn’t know if I’d like staying home, but it didn’t seem like a risk I wanted to take. It was just much safer and much more profitable to work.
So I had that in my mind until I was about 7 months pregnant. At that point the motherly instinct kicked in and sobs of “I can’t leave my baby” were heard nightly in our household. So I decided to see if it would be financially feasible.
Of course it wouldn’t be, I was making a majority of the money, there was no way we could go from 3 people living on 2 generous incomes to 4 people living on 1 income. It just would never work. I was wrong.
I ran the numbers. I was a financial analyst, so I actually developed models in Excel about what would need to occur in order to be able to stay home. I worked on these models everyday, surely there had to be a way to make it work, right?
Absolutely, it would just take the desire to stay home to be larger than our desire for “things”.
So what did we have to do?
- We cut out our extracurricular activities, mainly this was karate for my husband. He was so good at it and loved it so much, but he agreed to cut it out, saving us around $300 a month.
- We downgraded cable and our phone service.
- We decreased our eating out to about once a week. Many weeks we don’t eat out at all, but we still leave a little wiggle room.
- We paid off one car. That freed up about $300 a month.
- We downgraded cars. A BMW made my little heart happy, but it sure didn’t make my wallet happy. Repairs on that bad boy were a killer, so we switched for a car that my husband could do the repairs on.
- I learned to cook. Funny, I was 30 and still couldn’t bake a potato in the microwave. So I learned to cook. From what my hubby tells me (told me a few nights ago in fact) I’ve become quite a good cook.
- I’m frugal. I try to make everything I can myself at home, from scratch if possible. It’s the cheapest and healthiest way, overall.
- I refinanced my student loans, freeing up money with the lower monthly loan payments.
- I became a professional grocery shopper. A lot of our monthly income goes towards food, so it’s my job to keep that cost down.
All in all we changed everything. I consider us wasteful before, where as now we are less wasteful with our funds.
It’s possible to stay home and live on one income, trust me, I’ve done it. When I hear people say they can’t, it just drives me nutty. As always, anyone who has any questions or wants advice on this just contact me at Mommies Home.net. I’d love to help in anyway I can!
Topics: Money Matters |
November 20th, 2008 at 11:34 am
I know this is a little late when you are already depending on the second income but the best way to handle it is to never need that second income. When we both worked we never allotted the second income to anything essential but instead used it for savings and things we could do without (vacations, eating out, if ever we needed to go to one income. Living life this way helped us to retire in our early and mid 50’s with plenty of savings that had been socked away during the years when there were two incomes and we lived on one.
November 20th, 2008 at 12:30 pm
You said it - it totally can be done!
P.S.
It drives me nuts too, when somebody says it can’t be done. People can go so nuts spending money sometimes, that they forget to appreciate and enjoy what they already have …
November 20th, 2008 at 1:26 pm
I agree 100%. Thanks for the good post.
November 20th, 2008 at 8:50 pm
My wife and I went from two incomes to one when I went back to school. Once I graduated, I got a job in the corporate world so that she could stay home with our son. This was probably the best decision I have ever made (besides asking her to be my wife). If you really want it bad enough you can do it!
November 22nd, 2008 at 3:44 pm
I think the things you discussed should be done whether you have one income or two. We are a nation with a negative savings rate. You offer some sound advice towards getting ones financial house in order. My wife and I both work, but we [nearly] live off one income. The other is used to save, invest and to use for emergencies. Great post!