Have you changed from double income to single?

[happybratpack]

Anyone here have any experience with this? I have a friend who is looking to do this because of their child, we've been going over and over her budget and I can't figure out how to make things work. Any input?

 

[OhMari]

I think a little more info is needed, but I will try.

There will be no child care cost,
if she works in an office setting she won't need working attire, but she might need new jeans and t-shirts.
She can save on lunch expense if she ate out for lunch.

Babies are expensive, she needs weekly diapers, formula if she isn't nursing.

Maybe she should reevaluate after 4 months and see how things are going and maybe she could work part-time a couple of days a week.

 

[bananiem]

Well, first look at the health benefits. Who currently carries those?
Next, cut out the extras...dinners out, movies, manicures, etc.
Look at how much she/he spends on gas to and from work, and on lunches out and work clothes, including dry cleaning.
Cut out day care expenses.
A big thing to think about is being able to jump back into the workforce later. Some careers are easier to do that than others.
I would tell them to try living on one income for 3-6 months, minus the expenses incurred from working. (see above.)
It's easier to plan from the beginning to possibly go down to one income, than it is to use both incomes regularly and then try to go down to one.

 

[bananiem]

And if they are not currently putting as much as they can into retirement, my previous thread is null and void. They must secure their future first, IMO.

 

[Parkhopper]

We never thought that it would be possible to go from two incomes to one, but found that with a little bit of belt tightening, it was fine. When I decided to stay home with my DS, I found that I was cooking lunches and dinners which was much less expensive than eating out. I no longer had huge dry cleaning bills, and I didn't need much of a wardrobe at all.

It was tough, but doable. I never regretted the time that I spent home with my DS when he was little.

Suzi

 

[jedi_librarian]

There are books on this topic, if that helps:

How to raise a family on less than two incomes :
the complete guide to managing your money better
so you can spend more time with your kids
by, Denise M. Topolnicki

You can afford to stay home with your kids : a
step-by-step guide for converting your family from
two incomes to one
by, Malia McCawley Wyckoff

 

[MrsNick]

There are books on this topic, if that helps:

How to raise a family on less than two incomes :
the complete guide to managing your money better
so you can spend more time with your kids
by, Denise M. Topolnicki

You can afford to stay home with your kids : a
step-by-step guide for converting your family from
two incomes to one
by, Malia McCawley Wyckoff

HAHAHAHAHAHA!

I'd like them to tell me how we'll pay our mortgage. And no, we don't live extravagantly - we're in a one bedroom/one bathroom condo. The cost of living alone has pretty much required us both to work.

 

[momof2inPA]

A wise friend once told me, "Never buy a house you can't afford on one income."

Other good advice is not to have a car payment. Drive clunkers if you have to, but car payments are a waste of money.

Finally, don't have kids until you are financially secure.

These probably don't help your friend, but it's what we did.

 

[ReneeA]

I left my job 3 weeks before I had my first child, and I made as much money as my DH.

It's not easy, but we live with only 1 car payment at a time (but don't have any right now since I paid off my van ), I shop for groceries on sale with coupons, I don't spend extravagently on anything.

It was really tough for the first 6 months, then we adjusted.

ReneeA

 

[jedi_librarian]

Sorry, I wasn't implying anything. I just looked up some books here at work.

 

[barkley]

also need to see if any of spouse's income is driven by potential sahm's current benefits (my dh's employer kicks back a portion of the what they would pay for employee's health insurance if the employee provides proof they are covered under another person/policy). this can result in loss of few hundred dollars per month.

also when doing a potential budget-need to think of all of the non regualr expenses during the year (besides car upkeep-car registration, property taxes or assessments, association dues, any co-pays for well baby or immunizations, perscriptions...) and beyond the normal emergency fund have an account set aside with at least one car insurance deductable and one homeowners/renters insurance deductable.

if they use a c.p.a. for taxes they can call and ask them to crunch the numbers on how the decrease in income will impact them tax wise (could result in lowering taxes but could also result in disqualifying them for some resulting in a higher tax liability).

i would suggest first trying to live on one salary (and keeping an accounting of what is going out relative to her working), then if possible-taking a leave of absence from her job to try it out for a few months (it's a whole different world-sometimes the lack of adult contact and interaction can make it very difficult).

best of luck to her whatever she chooses!

 

[Kermit]

How old is the child? Have they been doing a budget for at least a few months? It's a lot easier to see where you can cut back when you know exactly where you're spending money.

A lot of books recommend trying to live on one person's income before the other person quits. I agree that you can defnitely do it if you can live on the spouse's income, but even if that doesn't work, it can still be possible. There are a lot of expenses related to working, besides the obvious ones, like daycare. If a woman comes home and makes being a SAHM and running her family on a budget her job, there are a lot places where it's possible to cut expenses. Of course, how much they'll be able to cut back depends on their life style right now.

One thing she can do is compare the percentage of her DH's income on different things and compare that to what financial experts recommend. You can find a tool from Crown Financial Ministries that lets you enter your annual income and then see what dollar amount they recommend you spend on food, cars, house, etc. You can find similar recommendations from many financial advisors. Some families will have to decide to make some pretty dramatic lifestyle changes, like moving to a smaller house or driving one car, to have one person stay home with the kids. Some people are fine making that decision when they make it for a purpose and realize that they'd rather stay home with their children than live the way they used to, and others aren't. To me, it does make it easier to make that decision when I realize it wasn't something I was forced into but rather something we decided we wanted.

Like I mentioned before, depending on how much they're used to spending, it may be possible to really cut back once she has more time. She'll be able to cook from scratch and shop for bargains. One thing that really helps us is making a few meals ahead of time and keeping them in the freezer. When I'm really busy, like when I'm about to have a baby, I'll put enough in the freezer so that I won't have to cook for a few weeks. But normally, I just keep a few things in there so that when we end up being really busy and I can't possibly cook dinner, I can get something out of the freezer instead of ordering a pizza. I have stuffed pasta shells and homemade Hot Pockets in my freezer right now.

If she has a baby in diapers, I find that using cloth diapers helps me save a lot of money and time. I don't have to clip coupons and always drive to whichever store has diapers on sale. I do have to wash them, but that's just an extra load of laundry. I washed once every 3 days when I had one in diapers; now that I have two in diapers, I wash every 2 days. If you want more information about cloth diapers, let me know. I just PM'd a lot of information about them to another DISer a few days ago.

Like someone else mentioned, there are a lot of good books out there. I really like Miserly Moms. There are several good cookbooks that can help, too. I think that most (not all, but most) American families can afford to have one parent stay home if they really want to. Not every family wants to make the sacrifices necessary, and that's fine, but there are a lot of ways to get it done if it's a priority for you. I always counsel newlyweds to live off just the husband's salary from the start if they plan on having the woman stay home at some point because that does make it a lot easier, but it's still possible for people who didn't do that.

 

[Cindy B]

A wise friend once told me, "Never buy a house you can't afford on one income."

Other good advice is not to have a car payment. Drive clunkers if you have to, but car payments are a waste of money.

Finally, don't have kids until you are financially secure.

These probably don't help your friend, but it's what we did.

We also did the mortgage papers on our house with just one income--DH's. In fact, they did get my paperwork for my part time salary, and they told me it didn't change anything! (I guess I should be insulted!)

We also drive two cars without payments... love not writing a check for a car.

Well, we did have kids younger in life. I guess 2 out of 3 isn't bad.

 

[Wishing on a star]

It CAN be done, if it is what your friend really wants.

I kind of shy away from from looking at it so much 'on paper'. This can easily make it seem 'easy', or 'impossible'.

I am assuming that your friend has a very young child/baby???

It IS a real lifestyle change!!! It is a real psychological and emotional adjustment for the mother. It can be easy to fall into the trap of feeling like "Hey, I used to be financially productive, and interact with intelligent adults." And it can be hard to adjust to the very demanding role of first time motherhood, dealing with the never ending dirty diapers, toddler tantrums, etc...

The husband has to be involved in this too!!! Perhaps he could take on extra work, or seek promotion, or a better paying position???? Perhaps there is away that he, or your friend, could bring in extra money on the side?

It is also an adjustment for the father. He must realize that his wifes new job as a mother is a full-time 24/7 job. He must be ready to take on his fair share and give your friend some REAL breaks. There is the all to common trap of thinking that SAHM's should be happy to be SAHM's, which means that they literally to stay home all the time!!!

Our son has some issues that made him very high maintenance. There was simply NO way that I could have simply put him in daycare and worked. I had decided years ago that I would be a SAHM while my child(ren) were young. And, you know what, we did it!!! We made it work!!!

 

[momof2inPA]

We also did the mortgage papers on our house with just one income--DH's. In fact, they did get my paperwork for my part time salary, and they told me it didn't change anything! (I guess I should be insulted!)

That'll be me if I get a part time job around here. The Post Office pays about the best. IMO, you shouldn't even let the Realtor show you houses that you can't afford on one income. Then you won't be tempted.

It sounds like two out of three is working out well for your family.

 

[barkley]

another thing i just thought of-make sure there is a safety net in the event dh were unable to work due to job loss, illness...going from 2 is 1 is hard, from 1 to none is impossible.

i tend to shy away from the idea of dad seeking a second job, promotion or higher paying position- all three likely involve dad being away from the family more, and i can't see it benifiting a child to have mom at home and dad much less.

i dream of supermarket coupons (none anywhere near us offer any-it's the "great supermarket conspiricy" -i am counting the minutes until our walmart turns super on november 1st ), and moving to a smaller home is not an option-even the several hundreds of thousands (yes, hudreds of thousands ) our home has gone up in value over the past 5 years would not enable us to decrease our mortgage (a non inhabitable shack would cost every cent of equity and result in a higher mortgage payment, rentals go for more than my current mortgage).

another thing that should be considered is the cost of living in the area you live. compare it to both incomes. when i worked my commute costs ran around $200 a month, with recent gas and toll hikes i would be spending $700 so i saw an increased savings there, but the same cost increases resulted in higher expenses for my dh so the point was mute...and with increasing fuel and food costs it might be advisable to look at potential vs. current expenses).

just as an f.y.i. to those seeking part-time jobs (the post office post reminded me of this) call the government employer you are interested in working for and find out if they use a temp. agency to provide employees for vacant entry level jobs. the agency i worked for regularly used these as a means to find good candidates (who were strongly encouraged to apply for permanant full or part-time positions). a side benefit is that you can see what a job is like from inside and decide if it is a good fit for you.

 

[pattyT]

Been there - done that
A big thing we did that made ALL THE DIFFERENCE in the world...
we went from a single family home to a two family home -
someone else paid the mortgage...
When we needed more space - we bought a 3 family rentted out the old apartment - moved into the 1st floor of the three family and again someone else paid the rent!
5 years later (a sacrifice well worth it) we sold that two family and are building our DREAM home!
We saved sooo much from my not having to buy dress clothes, lunches, etc...

 

[wide awake]

We did this when DS was born. I'd paid things off while I was pregnant so that I could stay home if I decided to...good thing, worked for three days and said no way. It was a big monetary sacrifice...at least half our income...but we always had money for DS's Gymboree, books, and clothes...and we did w/o lots of other stuff. I went back to work later, but I have always cherished those 6 years I was home w/ DS. Even if your friend's family had to downsize their home I can't imagine they'd ever regret it.

 

[nwdisgal]

Been there, done that, and back again to DI. Still, I wouldn't have given up the time I had with the kids. It was worth it.

 

[JenDaveBrendan]

We just went down to one income about a month and a half ago. I left a $36,000 a year job to stay home with my DS 5 (I couldn't stomach paying the $1200 a month in daycare/private school anymore - also he was starting to HATE school because he was there so long- he is doing much better now in the half day kindergarten)
My husband makes $61,000 a year and I get roughly $10,000 a year in child support (my son is from a previous relationship)
We are sort of struggling on one income - we have had to cut back on going out and take out food (which we lived on....), also activities. We never really payed much attention to what we spent. - now we have to.
What bugs me most is that we were looking into buying a home - I just don't know if that is doable at this point on one income....... We live in a pretty expensive state - where a "fixer-upper" goes for about $350 - $400,000 in a decent town with good schools.
We pay about $1200 for rent, however both our car payments together come to about $800 a month, plus car insurance is an additional $200 a month!! This is our biggest expense. (no, we cannot go down to one car - it is definatly not feasable) My car is a lease and I can not get out of it at this point.
However, I think it is definatly doable to stay home and make it on one income if you can cut back on some things...... And it is also SO worth it to stay home with your child and make some sacrifices!!
Good luck to your friend!
Jen