Going from 2 salaries to 1?

[Minnie824]

Has anyone gone from 2 salaries to 1? Any advice or suggestions? Within the last year I've had a job change and would really at this point like to have a job change to not having a job. The problem is our cost of living and expenses. Obviously bills/mortgage/taxes can't change. Other than that biggest expenses are kids activities and vacations, both of which I'd rather not give up as well. I know it would be a matter of some sacrifice and budgeting and just wondering if anyone has done this successfully. Thanks.

 

[anabelle]

We did it a few years back. Hubby and I were both in the auto industry. I decided to take a buyout. We ended up moving to the DC area after that. We offset the loss of my income by taking the kids out of private school. You do save some money by not driving in to work. Insurance also comes down if you drive less miles. I started cooking at home and honestly that was the biggest money saver. I don't know your situation but you might have daycare costs to save. It's funny but even though I had been making a good salary, we survived just fine.

I have since gone back to work since my boys are in college now.

 

[sk!mom]

We did it years ago. To prepare we used my salary to pay off the debt that we had quickly. Once it was paid off, I quit and stayed at home for a few years while also taking classes to prepare for a career change when I did go back.

We did cut our expenses. I cooked at home. We quit taking DH's clothes to the cleaners. I ironed them. I got rid of my fake nails and that upkeep. No more child care expenses. It worked fine for us.

I think the first question is,

Does you DH make enough? He either does or he doesn't.

 

[danygirl]

We did it years ago.

You really need to document all your expenses. Then pick apart any that only apply if you work (day care ,housecleaner, meals out during the work day, commuting expenses (subway, bus , parking, etc).

If you don't coupon now you can save about 50% on grocery store expenses by couponing, eating all your meals at home, and planning your meals for the week ahead of time.

If, when you look at your expenses, you have enough money to stay home, plus a cushion each month for emergencies, and are willing to cut your budget down to stay home, then do it.

 

[crisi]

Today is my first day.

We did a lot of saving. My husband got a new job that will make up about half my income. The other half of my income is made up in having the kids college funded to the point I'm comfortable and the house paid off. Those were the two big places my income was going.

I'll probably go back in a few years, but right now, my husband will be working a lot and I'm needed at home.

 

[Praying Colonel]

DW is taking about an 80% pay cut as she goes from a full-time management position with good pay and benefits to a part-time job with no benefits. She couldn't stand what she was doing and she'll be happier doing this.

First we looked at our monthly budget to see if we could do it and if so, what our new financial reality would be. After we figured out it was doable, we decided we're going back to the old envelope system and live out of those to enforce some fiscal discipline and not overextend ourselves.

 

[MissVeronica]

We did it in January when I quit my job to stay home with DS2. Figure out a budget that you can live with on one salary. Try it out for a few months to make sure it works before you quit. Also, stockpile as much money as you can in the meantime. Good luck!

 

[100AcreWood]

We did it in January when I quit my job to stay home with DS2. Figure out a budget that you can live with on one salary. Try it out for a few months to make sure it works before you quit. Also, stockpile as much money as you can in the meantime. Good luck!

This exactly. I left work 6 years ago to stay home with the kids. There have been tough times where we ran tight but we're very adjusted to it now. We vacation differently and we don't have cable or a phone bill. We looked for every possible way to cut. If you eat out even once a week, cutting that really helps. If your kids are very active in extra activities you may have to limit their choices. Our kids are allowed one activity per week most of the year unless they find a class through parks and recs that is inexpensive. Past that we only go to the movies twice a year, etc. You get the point.

The best advice is live like you're on one income for 6 months before you make a decision. We had friends who did that and the wife decided they couldn't live with that kind of budget so she kept working. They were glad they tried it first (she is very well paid).

 

[worm761]

Figure out a budget that you can live with on one salary. Try it out for a few months to make sure it works before you quit. Also, stockpile as much money as you can in the meantime. Good luck!

This! We decided that I would stop working full time and get a part time job a few years ago. I tried finding a part time job for over a year and then got pregnant. So, now I am home. We adjusted by stopping a lot of things. We have always cooked at home but ate out on Saturday nights and we no longer do that. We might go to the movies once a year now. We vacation less and DS doesn't go to private school anymore. It was an adjustment but we made it work. Now, DH is being furloughed and we are looking at cutting back even more.

 

[jliehr]

A blog that might help, but before you click a strong warning, this blogger likes to be creative with his language, and can be fairly vulgar.

The premise of the blog is reducing living expenses to become financially independent and retire early. Of course he really attacks consumer spending, and if you go there and post you love Disney you will get hammered, but the general ideas of identifying and eliminating wasteful spending can be helpful.

http://www.mrmoneymustache.com/

 

[brymolmom]

Best advice is to sit down and document all expenses and compare to the 1 income that you'll still have. I would put them in 'need' and 'want' categories...ie: mortgage (unless you want to move), insurance, food, electric, car payment (if exists), water, taxes. Then under want cable, kids activities, etc.

Then after figuring out if it is even possible with the 1 income...I would put ALL your income into some savings account and DO NOT TOUCH IT for 4 months or so....See how you do.

 

[zxrst]

Since you are asking, you are probably not there yet...My suggestions:

Big savings:
1. No private schools.
2. Downsize house.. especially the market is rebounding now

Modest savings: (save $100-200 per month)
1. Home cooking...few eat-outs
2. Prepaid plan (VM, straighttalk etc)
3. Basic cable (get rid of HD channel and premium channels)
4. One less trip per year

Small savings: clip coupons, watch sales etc.

Whatever you do, make sure you have 6 month emergency funds and life insurances for both you and your DH.

 

[danygirl]

Coupons can be big savings - check out couponingtodisney she taught me to save 400 per month

 

[AquamarineSteph]

We did it a few years ago, but before we reached that point we had worked out a careful budget of fixed expenses vs. discretionary spending.

We bought fewer new clothes. We shopped thrift shops and yard sales. Sometimes we just did without things, but sometimes you find that maybe you just don't really need something in order to survive.

In the end, we learned a lot about ourselves and changed a lot of spending habits for the best. But I feel like I should echo what other people have said above. Know what it actually costs you to live with your fixed expenditures. Make sure you have a budget in place to cover those costs. Be prepared to buy less and eat at home more. Know what you can and can't live without in order to be happy.

And make sure you have an emergency fund. It can literally be a lifesaver.

 

[crisi]

Bills, mortgage and taxes all can change.

Taxes will change by default - at least the income and FICA part of it.

Bills - pay them off, shop around for better deals, drop what you don't need (cable tv), turn down (or up) your thermostat, turn off lights, get rid of your landline.

Mortgage - move. Use your equity to refinance for a longer term at a lower rate. When we first moved into our house we had a fifteen year loan at 7% (it was a while ago). A few years later my husband came very close to losing his job (he was reorganized at three days before being let go) and as part of the preparations for being a one income family, we moved to a 30 year mortgage - and rates had going down. The required cash flow was cut by hundreds of dollars.

However, the thing to remember with staying home is TINSTAAFL. You will need to make some sacrifices, unless you've been living off one income already (and even then, wealth accumulation takes a hit - I'm looking at my retirement numbers, I'm pretty good, but its going to suffer). If you aren't willing to make them (kid activities, vacations), maybe you don't value staying home as much as you think.

 

[DawnM]

We did it. We both worked and both had pretty decent salaries. However, our change involved a move. We moved from a HCOL area to a LCOL area.

We made changes. We took the salary we were getting and sat down and worked a budget.

 

[Gr8t Fan]

Other than that biggest expenses are kids activities and vacations, both of which I'd rather not give up as well. I know it would be a matter of some sacrifice and budgeting and just wondering if anyone has done this successfully. Thanks.

Depending on how much $ your DH makes, you may have to limit kids' activities and rethink your idea of vacations. We made the switch from 2 incomes to 1 about twelve years ago and it's been worth it to us, especially as our older children are now teens. It hasn't always been easy, but it's definitely been worth it and we wouldn't have it any other way.

 

[Shelly F - Ohio]

We are a 1 income family.
You learn to shop wisely by couponing, preparing meals at home that can be served twice, a reading the sales ads.

I shop in bulk at BJ's and use the BJ coupons and mfg. coupons for my purchases there. Last year I saved $550 on coupons alone at BJ's!

Stock pile the freezer when I find meat on sale.
Just the other day our grocery store had discontinued Stouffers Family size Lasanga for $2.00 and I bought 10 of them. Each one will feed us for 2 meals plus a salad and mash potatoes so each meal should cost $1.75 per person.

Combine errands. Don't take big vacations. We do staycations around our state. One month I pick a fun activity that can or can not involve an overnight stay at a hotel and the next month DH picks.

Now that summer is apon us I will shop at the local road side stands for my fruits and veggie's. We eat a lot of tomatoes so I bought 3 plants for less that $6.00 total.

 

[amylevan]

I did it when our second child was born back in October. We are just making it right now. Where we saved:

-I'm actually saving more than I expected by not working. No daycare, no commuting costs, no lunch costs (I use to eat out for lunch or hit the vending machines regularly), no "work clothes" needed, and less convenience items needed.
-We were able to reduce DH's tax withholdings.
-Dropped Verizon wireless for a prepaid plan.
-Dropped my gym membership.
-Now that I'm not working, I have more time to "coupon shop". So our grocery bill has reduced.
-No more dining out. At all.
-Reduced college savings. Currently we are only putting $25/month for each child into a 529. (Plus whatever gifts they get from grandparents at Christmas.)

 

[Egdisney]

I was finally able to stay at home after my husband got a pay raise that more than covered my earnings. However, before that I was working only part time during times when mu husband was at home. I worked about 20 hrs a week. That may be an option to consider before taking the plunge. Some things I recommend:
1. Work until all debt except mortgage is paid off and have an emergency fund in place. Then you will have no worries about money! . My husband now makes way more than we made together when I worked but I am going to get a pt job so we can pay down debt further.
2. Go to www.irs.gov and check your tax withholdings. We were able to bring home an extra 300 a month by changing these!
3. Couponing can be daunting and frankly I am too disorganized to be really successful. I recommend meal planning, shopping the sales( walmart price matches so there is no need to go to every store). Also give up brand loyalties. Generics are great! If you have an Aldi near you, go there! Their products are wonderful!
4. Cancel cable or call around for better deals. Never hurts to ask!
5. What are the kids' activities? Are there cheaper alternatives available?