Going from 2 salaries to 1

[Minnie824]

Does anyone have any hints, tips, advice for having to go from 2 salaries to 1? DH & I both work full time but my company is going thru some downsizing, so I want to be prepared, just in case our household income gets cut in half anytime soon. Even the smallest suggestion of saving or less spending, or whatever would be great. Thanks.

 

[lovemygoofy]

Start tracking your paycheck. What % you are using to pay bills or buy household essentials.

If you need to reduce things to make 1 paycheck stretch look at cell phone bills. Do you have too many minutes? Really need texting? Just have to have internet on the phone?

Do you buy breakfast or lunch out? Switch to brown bag 2-3x a week and consider starbucks a treat instead of a necessary.

Do you have childcare expense? Can the be cut out if unemployment does happen?

Make a list of things in your pantry/cabinents to make meals. You'd be suprised how many meals you can make without several trips to the store besdies for some fresh things.

Best advice is to track all your money and spending habits. Write down how much you and your family spend in a month. You'd be suprised at how much people spend without really thinking about it like movies, popcorn, afternoon snacks, dessert out, cute hair things at walmart or new dvd.

 

[mrsv98]

Good advice from Tina. We found one of our biggest expenses was eating out/take out. When DH was laid off then end of August we quit pretty much cold turkey and it is amazing to realize how much money we were spending on food after I had gone to the grocery store.

Also look at the food you are buying. I have switched many items to house brands and honestly, there is little difference and it saves me about 15% on my grocery bill.

 

[monkeybug]

Chase what matters!! I know it's a slogan for an investment company now, but I heard it at a friends church shortly after leaving my job to be a full time Mom (long before the commercial). Before I left work I made more than my husband does now, and he's had three significant raises since then . It was an adjustment!!! So worth it though, and I wouldn't go back for twice the amount I made now.
I just had to focus on what matters. What matters more, what my home looks like, or how my home feels? What type of car I have, or that I have a car that allows me to travel safely with my family and still have money for making memories and new experiences? Having top brand clothing or not having to sacrifice any time with my family? After switching my focus from the material things that used to drive me, to the traditions and time with my family that builds lasting memories, the switch was much easier! (but I still miss Tiffany's and Coach and Macy's and eating sushi every weekend!! I'm not THAT well adjusted!!! ) I also learned to make a lot of things myself, instead of paying top dollar for some one else to do it!

 

[golfgal]

Start putting everything you make in a savings account AWAY from your current accounts (so you can't just transfer money easily) and start living off one salary-first you will boost your savings, second you will see where you need to cut.

Easy things to cut is to cut back on cable/satellite channels, cell phone plans, eating out, new clothing, etc. If you have any outstanding credit card debt, get rid of that fast so you won't add to that in the future. Carpool to work if you can, turn down the thermostat at home and add a sweatshirt. Switch to energy saving lightbulbs. If you have more than one car payment, get rid of one car, buy a used car for cash.

 

[Janet Hill]

This happened to us in February. I was amazed at how easy it was to adapt (and I was making >100k). No more commuting costs and lunches out cut a lot out of the budget. I started fixing all meals at home (another huge savings). I now dye my own hair (this was a hard adaptation). If you have a professional level job that necessitates business attire - no more shopping also saves a lot. I no longer pay to have my house cleaned (this was hard too). Gee after looking at all of my costs to go to work, I think I was really only working for the retirement benefits (and this is a good thing).

The worst is that I am no longer socking 20k into a 401K (I'm over 50 and eligible for catch up) and I don't have an employer making pension contributions for me.

 

[mickeymedic]

When I was out of work we were down to just my husband's income. I viewed it as my job to find ways to save money and make his paycheck stretch as far as possible. For starters, I made his lunch for him to take to work. I tried to send different things each day so that he would not get tired of the same lunch everyday and be tempted to buy. I drove my car very little - saved a bunch on gas. I started clipping coupons and really paying attention to what items were on sale from week to week. I also lurked over on the budget boards and got some really great tips - like cutting dryer sheets in half. They work just as well, but last twice as long. Good luck. If you starte making some of these changes now, you won't feel the shock so much down the road.

 

[monkeybug]

Consignment stores! If you find a good one you can get some really swanky stuff for a great price, and if you take good care of it you can consign it when your done with it and get some of your money back! My kids wear Janie and Jack, Gap, Gymboree, Pumpkin patch, Hannah Anderson and lots of other name brands, but I pay Walmart prices for them! Consignment stores are my BFF!

 

[kristilew]

This is all good advice. You might want to check out the budget board, too. Those are some hard-core penny pinchers!

 

[Pigeon]

Go to the public library and check out the Tightwad Gazette, written by a woman who was the goddess of frugality. Some of the advice is dated, some may strike you as too extreme. But some is useful and the mindset is what's the real gem to paring down your household costs.

 

[Sparx]

we recently started shopping at aldis for everything we can, instead of walmart. its a LOT cheaper. (usually 5-50 cents cheaper on every item, sometimes even dollars cheaper)

 

[WDWBarb]

Eating meals at home or "brown-bagging" can be a tremendous savings. If you clip coupons and shop sales, you can save even more.

Cut out all drinks that come in a bottle or a can and keep on drivin' right past Starbucks (this is the hardest for my DH to do!).

Buy your personal essentials and household cleaning items at Wal-Mart or K-Mart or Target to save some money and make sure you take advantage of your coupons. Buying paper towels, shampoo, soap, detergent, etc. at the grocery typically costs much more.

I think you'll be amazed at how much it has been "costing" you to work!

 

[minniebeth]

In addition to what was already mentioned, eliminate any landscaping services, dry cleaning (a huge savings right there), car washes (except in winter months with the salt/chemicals from the road if you live in a snowy area), greeting cards...I know we all "care enough to send the very best" but our best can be a nice hand written or hand stamped/created note or phonecall. Gift giving can be eliminated or cut back or creatively changed, such as draw names in families instead of buying for many individuals.

These are things that we've done to help with our budget and if you put it on paper, it's a big savings.

 

[MiniGirl]

Start putting everything you make in a savings account AWAY from your current accounts (so you can't just transfer money easily) and start living off one salary-first you will boost your savings, second you will see where you need to cut.
Easy things to cut is to cut back on cable/satellite channels, cell phone plans, eating out, new clothing, etc. If you have any outstanding credit card debt, get rid of that fast so you won't add to that in the future. Carpool to work if you can, turn down the thermostat at home and add a sweatshirt. Switch to energy saving lightbulbs. If you have more than one car payment, get rid of one car, buy a used car for cash.

This is exactly what we did when I was pregnant with our first and we knew that I was going to stay home. We started living on dh's salary before we had to. For the first couple of months, we did have to dip into my paycheck, but we soon got to the point where we were not touching my check at all.

 

[pipersmom]

Due to necessity (dd's medical issues) we live on less a month than a lot of people make in a week. My biggest piece of advice would be to continue saving, and save even more now while you can, as Suze Orman would say..pay yourself first. That being said..we do not have cable, have dial-up internet (4.95 a month), and eat out once a month and consider it our "special dinner". A lot of our clothes come from consignment shops and thrift stores though I refuse to buy shoes from them(Just something about the thought of someone else's stinky feet being there first..lol) and dd does also get new clothes when she starts school in the fall and again in the spring (just 2 or 3 outfits instead of 10 or 20!). I basically Christmas shop pretty much all year, and will do my own "christmas club" for large items. I paid for my car from savings, so no car payment. I carry liability auto plus collision with a 1000 deductible. I put the "tacky" plastic in my windows and leave it year round, keeps the ac and heat in so I'm not paying to heat/cool the outdoors. We use shammys for a lot of "paper towel uses"..I may use a roll of paper towels a month, we also don't use paper plates, cups, etc. What paper products we do use, I buy in bulk. I shop coupons and sales, but that can prob go without being said, lol. I know some of this sounds pretty drastic, just know that you can live on a lot less than you may think...

 

[Chicago526]

Before you can do anything else, you need to make a budget and see what your spending and where.

I make a budget for every month (expenses change every month afterall!) in a spread sheet and can easily subtract either of our incomes and then play around with other expenses, and then see if we're still short at the end of the month. It's great for playing "what if" as well as of course tracking our money week to week, month to month, and year to year.

But don't assume that if one of you isn't working that certain expenses will go down. You may not be driving to work every day after a lay off, but if you are looking for a new job you may be putting on just as many miles and using just as much gas going from an interview to a job fair to Office Max for more resume paper. Not to mention the cost of said resume paper!!! New clothes may be needed for interviews, classes may be needed to update skill sets, there can be all sorts of expenses to looking for new work. Plan for those as best you can.

Don't forget to factor in unemployment income. If you can make it on one income, great, but if not it's there as cushion. If the worst happens, be sure to apply right away. Try to find out what you'll qualify for before you're laid off, so you can budget appropriately.

Also don't forget to factor in COBRA if the spouse that's laid off also carries the health insurance. It's expensive and can take a huge chunk out of an already reduced budget, but is so important to have. One illness during a coverage gap could haunt you for years, even decades if you get labled with a pre-existing illness.

 

[mcco5543]

I left my job due to an impossible work environment. Yes I know we're in a recession.

We stopped going out and spending money for "entertainment purposes" i.e. eating out, magazine's movies, etc... and decided to only go out on special occassions and then, only go to the places we REALLY loved or out to see the movie we REALLY wanted to see on the big screen. If you really sit down and think about "what matters" like a previous poster said, you'll find that not much really does matter aside from health and safety. Also a big tip is rememebr you do have to keep sane , you have to spend money on some "fun" sometimes or you'll go nuts. But when you do make it special and make it meaningful.

Cut coupons

considering going in with a friend on a wholesale club membership. many things are often cheaper in bulk, but if you dont' need all that toilet paper or whatever else, you can split up the item with your membership buddy.

I also agree to some extent with start cutting your budget now while you have 2 incomes so you can get used to it.. It's not a "shock" per se, but it is a different way of living. If you eat out at lunch or order in , don't do it. cut out a few little non essentials. I wouldnt' neccesarily only live off of one income if you don't absolutly have to but cutting just some things now will ease your mind in case you do have to go to one in come and it'll be less of a transition....best of luck!

 

[manning]

we recently started shopping at aldis for everything we can, instead of walmart. its a LOT cheaper. (usually 5-50 cents cheaper on every item, sometimes even dollars cheaper)

And the quality is good

 

[GeorgeG]

I've been retired for a little over four years and we made adjustments to living on two salaries to pensions and Social Security. The best I can say is understand the changes and adjust accordingly.

For us, moving to Florida from New York made a huge difference. That's not always an option, but was for us.

Give a lot of thought to lifestyles and how much you spend on things that aren't really necessary. You'd be surprised at how much less you could live on if you paid attention to your spending. That doesn't mean you can't enjoy life, but an adjustment in priorities would help a lot of people, even those who have two full incomes. We're a society of spenders and we need to reel some of that in from time to time.

 

[barkley]

we had to do this when i became disabled while waiting for my pension to kick in, here's what helped us then and now:

bundled insurance (home and auto with same carrier-raised deductables so long as you have enough in savings to cover them if need be), you can also get a discount if you pay annualy or bi-annualy vs. monthly,

internet-i called my provider and told them the scandously low 'come on' rate one of the other providers had sent me an ad for and asked what they would do to keep me as a customer-they lowered my rate over 50% and would lock it for a year if i agreed to a one year contract,

cell phone-called my cell phone provider and reminded them how long i've been with them and asked what they would do to keep me from jumping to another provider who was offering me a better rate-they also reduced my contract rate,

garbage-i started recycling more so i could cut back on the size of the container we use (here it's the size of the container that drives the cost),


land line phone-figure out what you need/dont need-then find out the best cost (it's sometimes cheaper to go with a bundled package),

credit card debt/auto loans-explore the option of using a credit union. we have one localy that i learned would allow anyone to join. by opening an account and having the paycheck direct deposited we qualified to apply for a credit card and car loan. the car loan was 1/2 the interest rate we were paying, and the credit card allowed balance transfers at no charge with interest locked FOR LIFE at 6.9%,

consider looking at your withholding on the remaining pay-you may be able to change it significantly so you see more each month vs. giving the government an interest free loan until tax refund time.