I work full-time and have a small child. My husband and I are thinking of taking a couple of months to live off of one salary, using the second salary to pay off debt, in the hopes to see if we can actually swing living off of one income. This is so exciting and something we have wanted for a long time. Do you have any tips for how to go from two incomes to one? -Jamie
How exciting, Jamie! Here are some thoughts I had:
Get on the Same Page With Your Spouse
If you and your husband are not on the same page financially, it’s going to be hard to really get much traction or to achieve your goal of successfully going from two incomes to one. So before you even attempt to make the transition, sit down and talk openly about where you are financially and where you want to go.
Don’t nag and drag your husband to go along with your plan; put your heads together and find a solution that is a win-win for both of you. This will most likely involve some give and take and compromise, but it will be so worth it.
Make a Game Plan
Once you’re on the same page, dream together about where you want to be a year from now and five years from now. I think your idea to live on one income for a period of time is fantastic!
Think realistically about what sacrifices and lifestyle changes will need to be made in order to make living on one income a possibility. If your plan is to be able to live on one income by this time next year, look at your budget, figure out what you need to cut, and how much you need to save and increase your income in order to make it happen. Having a specific number that you need to save each month will help motivate you to find creative ways to lower your spending and increase your income.
Create and Stick With a Budget
The best thing you can do for your family right now is to get on a written budget. Many times, people don’t have an income problem, they have a spending problem.
Before trying to significantly cut your income, make sure you are being very intentional in how you spend your money and know exactly what you need to make in order to survive. I highly recommend getting a copy of The Total Money Makeover by Dave Ramsey from your library. If you can afford it, I also heartily suggest looking into going through Financial Peace University.
Both of these resources will walk you through how to set up a budget and how to stick with it. And Dave will motivate you and inspire you to dream big, work hard, and get your finances in amazing shape.
Pay Off Your Debt
Make paying off your debt one of your top priorities right now. This will probably mean some significant sacrifices in the short-term — working more hours and living on as little as possible — but the long-term benefits will be amazing.
Figure out how much you have left to pay off, set a realistic time frame for paying it off, and then divide the amount by the time frame to come up with the specific number you need to be paying off each month and week in order to hit your goal. When you break your goals down into bite-sized pieces like this, it makes them much more doable. And it also will motivate you to keep making short-term sacrifices for the long-term benefits.
What advice and suggestions do the rest of you have for Jamie?
Great article with excellent advice. We put all of my paycheck into savings and only lived on his income (for six months) after doing everything you mentioned in your article. It was our attempt to see how we could survive (and it built up our savings at the same time). We also went on a spending freeze for an entire month…which meant no spending on entertainment or groceries…eating only what we had in the freezer, fridge and pantry and only spending money on essentials (water, gas, electric). Makes you realize what you really NEED vs WANT. It worked great for us. When I quit my job it made the transition a little bit easier.
My husband and I have been doing a budget plan very similar to what you suggested. Next month we officially go to 1 income (I was a teacher and my contract is up in August). We are very excited/nervous/terrified all at the same time. We are trusting that we can be disciplined enough to make it work!
The key to my husband and I Living off of one income (We want to retire at a decent age so we put my entire part time income in savings) is that we always cook at home. We used to eat out a lot and spend an embarrassing amount of money on that, but since we made that 1 change, we can see such a difference. It’s hard at first, but then it becomes a personal challenge. I like to use the circulars in the paper to see what produce I can buy thats in season. My husband and I also go shopping at Costco and split everything up into little bags/ foil packets together to freeze so minimal food is wasted. We like to teach our boys (3&6) about not wasting and how hard we work for nice things and vacation so they will grow up knowing its not just free/ automatic.
Our family went from a two income household to one last year after my twins were born. Make an emergency account, car or home repairs could and most likely will happen. Plan out a budget with all expenses including medical. Sickness hit our home both babies and my other kids were sick. Dr visits, co pays and prescriptions add up fast thus breaking the bank. We have gone over budget and bled down our savings from these unexpected expenses. There are many times that I start to panic and consider going back to work. We know that would only solve the money part and place a mountain of stress on my husband and I.
We are a one income family, but now that the kids are a little easier to manage I am working from home. It isn’t easy, but with the tips here and just being patient it can be done.
get rid of cable TV
get rid of fancy cell phone
get rid of pets
stop eating out
shop at thrift stores
haha. simple, yet true.
Michelle H. says
I never thought I would want to be a SAHM, but once #3 came along 14 months ago it just seems more and more than home is where I need to be, so I am making the jump to SAHM this summer. We have been living below our means for years, and fortunately I will be able to take early retirement with a small pension, which combined with daycare and work expense savings will be close to what I’m making now.
It seems like a lot of comments are from moms who always planned to stay home once they had kids, and I would love to hear about the transition from a career mom who never thought she’d want to be home. I am worried about how to deal with full time kids, setting up a schedule/routine, and getting enough “me” time to keep from going insane. Because I am gone so much now I tend to make my home time all about the kids, and work is my “me” time.
I was recently displaced so we are potentially looking at one income. I am still trying to find another job, but we also recently moved to a small community that my skill set doesn’t jive with local needs….plus I am looking at about a 50% pay cut (based on the pay scale here). We have a 5 year old and a 3 year old. I can’t decide if I should even try finding a job where everything I make will go to pay daycare or just stay home a couple years until both kids are in school. We have no debt other than our mortgage – and although it will be tight, we should be able to manage on my husbands salary. It is just so scary going to one income….and then will I be able to get back into the work force? Any words of wisdom would be greatly appeciated! I feel like if I am going to be a SAHM I just need to pull the trigger and embrase it…but then I find myself sending out resumes.
Becki @Running with Team Hogan says
When we dropped to 1 income, I was blown away by how much I had been spending to go to work – gas, better clothing, work supplies (I was a teacher), lack of time to make less expensive, homemade meals (so our food was more eating out, expensive pre-made items). I actually saved a lot of money being home so that was a big help. Living off 1 income while earning 2 may not quite work since you may have work-related expenses, but we did it. (Leading up to me not working, we made triple car payments to help get us out of debt as well.)
Jessica Mckenzie says
Such great ideas & tips! My husband and I read Dave’s Total Money Makeover several years ago and I highly recommend it too. Now we are expecting our second child in 5 months and our oldest will be starting school. I really want to stay home with this baby and my husband seems to be onboard with it. (kind of scary but exciting) One thing we’ve not been able to figure out yet is dealing with insurance (health, auto, etc.) costs on one income (we’re both currently teachers)…Does anyone have any advice or suggestions?
Sarah P says
Jessica I don’t know what family health coverage costs through your school district but I would look into health care sharing. We participate in Samaritan ministries and love it. For $370 a month it was a huge savings over what it would have cost our family to be on my husband’s insurance through work.
Becki @Running with Team Hogan says
My husband’s a teacher, and I’m at home. All of our insurance (him, me, kids) comes through his school. (I used to be a teacher before I stopped working.) There are a few ways to deal with auto insurance. How we do it? My husband gets paid every 2 weeks, but we budget on 2 paychecks a month. The 2 extra pays in the car go into savings to make our 6-month car insurance payment (as well as other savings). I was amazed at how much money I could save by not working so that was a big help as well.
You can do it! We did it! We do follow Dave Ramsey’s baby steps but we found him a month after we went down to one income so that I could stay home with the kids. We found Dave Ramsey because we were in a huge hole every month and were not tracking our spending at all! We set up a budget and switched to cash for fuel and groceries and sold all of our toys (ATV’s, motorcycles), watched our power use, thermostat temperature, rate shopped auto insurance, lowered cell phone package, canceled cable and bought a $7 antenna (for the local channels) and a $40 roku box and pay $7.99 per month to steam Netflix (mostly for the kids). I know there is more stuff that we did but that is the big things that I can think of. We also started saving money every paycheck, even if just $5, just something
As a mother who stayed home with her children until they were all in school, I loved being home with my children! It was a sanity saver! And yes, when you figure the cost of working, gas, clothing, out to eat luncheons, etc. it often makes sense to stay home as those years pass by quickly. I would like to mention to remember future savings, like retirement and college. Those things seem to be forgotten when a parent wants to stay home. As I have since gone back to work, I have not been able to keep up with current computer software, etc. and I am now low man on the pay scale. I encourage women or men to try to maintain a part-time status. By doing that you are keeping a foot in the door as well as keeping your skills current. It is hard to come back to work ten years later with a decrease in pay and yet have retirement and college to think of. Just a thought on trying to maintain a part-time status.
Mr Ikonz says
My wife and I have spoken a few times about taking the hit and living off one income, but seeing as I just got rid of my debt, there’s been no catalyst to do it.
I think if we have kids and she takes maternity leave, we’ll get the practice then to see what it’s like to life off one salary.
Any extra money we can start saving then will go towards paying off my investment properties.
Kemi Quinn says
Good for you Jamie. An exciting and scary time. Paying off debt is key. And not only making a budget but really scrutinizing that budget and seeing what you are paying for.
I heard a great quote from an elderly man once. I can’t remember it word for word but it was basically if you can’t afford to pay for it with cash (not credit) then you can’t afford it. (disclaimer to omit medical care, etc.). We’ve used this rule for our entire marriage. If we want something we save up until we have enough cash to pay for it.
Let us know how it goes.
There will be money that you don’t have to spend because you work (daycare, food, gas, maybe even another car, clothing, etc.). My husband and I are thinking about doing this and we looked to see what else we can cut. Refinancing the house with a lower interest payment or getting rid of some bills (such as a gym membership).
We used the parents.com stay at home calculator (http://www.parents.com/pregnancy/considering-baby/financing-family/calculator/) to help figure out if we could go down to one income. While I don’t totally agree with their results, it helped us figure out areas we could cut from our budget (for instance we cut cable). We also started Dave Ramsey’s baby steps in January and have been able to cut our debt payment by $450 a month!
The only other thing to keep in mind is future kid costs – for instance our oldest is starting preschool in the fall, that’s an extra $1300 a year for us.
When you are talking with your husband about your goals and planning ways to cut expenditures, be sure you are both realistic. If there are some small things that you just don’t want to give up, say so- say, you love your Starbucks mochacinos. Then find a way to incorporate those little indulgences in the budget in a practical way- agreeing to cut back to one trip to Starbucks per month or every six weeks. Budgets are like diets; if you make your budget so strict that there is no room to breathe, you won’t stick to it, if you don’t have to.
Also, consider buying a second-hand freezer. You can buy in bulk and do once-a-month cooking.
If you aren’t sure that living on one income is for you right now, you could save half of an income as an intermediary step.
One thing I waited doing and wished I had done sooner was call around for car insurance (house, life, whatever insurance you have!) and get a cheaper one if you can- asap! That is saving money right away!
Shop at thrify stores, etc. use consignement shops if you can- I use one and leave my credit there if I know we will need some clothing soon or if we are in a bind I will go withdraw it.
Budget is the big one- figure out what is realistic and stick to it- is there anything you can give up to save? Make more food from scratch? If need be are you willing to work at times to help out (thinking ahead- that’s where we are at- I work a few hours a week when he is home with the kids)…good luck!!
Stephanie @ Mrs. Debtfighter says
We did the same thing when we made the decision that I would stay home with our baby (children). We lived off hubby’s salary and put mine into savings while I was pregnant. We sold hubby’s truck with a hefty payment and bought a cheap car for him to drive since he mostly drove a company vehicle anyways. As part of the budgeting you realize what you are buying that you need and how much you are splurging on. Good luck!! Such a great idea to do this as a way to pay off debt!!! 🙂
I wrote an entire series when we went from 2 to 1 income!