Thinking of leaving corporate world - budgeting advice from those who've managed it

[NYCDiane]

I'm considering giving up my job to be a SAHM, Disney obsesser, crafter, baker, homemaker, etc. My DH's job is requiring more travel and having both of us working full time is becoming difficult to manage logistically.

We both have to work late sometimes, he has to travel overnight about 1 night a week and sometime more. We don't have grandparents or family in town to pick up our daughter when we are both late which is happening more often. We both feel like we rush home to try to get a couple of hours with our daughter before bedtime and then trying to squeeze every minute of family time in on the weekends. That's fine, but then I realize that it's Sunday night and the laundry's not done, last week's laundry isn't all put away, I forgot to call my mom on her birthday, I didn't get together the 100 items for the 100th day of school, etc, etc., etc.

My husband makes enough that we should be fine financially, but we will have to change some spending habits. So for those of you who have taken the plunge from 2 incomes to 1, what ways have you found to save money? Any tips appreciated.

I did this when I had my daughter. I didn't want to leave her with sitters or in a day care. My boss at the time let me work from home for about a year and a half. It was great but then he started pressuring me to come back full time, offered me all sorts of extra money and incentives but I just did not want to leave her with sitters/day care.

I ended up working call-center type jobs. They offer a lot of flexibility even though the pay isnt' great. I always couponed but, after having my daughter, my couponing went into overdrive. I saved a ton of money that way. I also did a lot of selling on ebay and made money that way.

Another way to save is to look at every penny you're spending and cut out the nonsense from your budget. You'd be surprised how much money you spend on things that are not necessary.

 

[Teresa Pitman]

You will save money by not having work clothes, plus you'll have more time to shop sales. Consider checking out your local thrift and consignment stores. You have to be prepared to visit them regularly because the merchandise changes all the time, but there are often amazing deals.

Being at home means you can avoid eating out; you'll save on that plus you'll be able to make more nutritious meals for your family. Make as much as you can from scratch.

If you're cutting back on travel, check out the "staycations" opportunities in the area where you live. It's funny how many people travel to other places but miss out on visiting the local attractions.

Get to know your local library! If it's like ours, it not only has books and e-books but dvds that can be borrowed, as well as programs for kids and adults.

TP

 

[goodeats]

I'm currently a SAHM, I love being home but do sometimes wonder "what if".

One thing I wanted to point out it's important to look at your retirement. As a prosecutor I'm assuming you work for the government. Would you be giving up a pension? Are you vested? Can you roll it over?

 

[graceesmom]

Good luck! I've often considered it too. I need to start thinking about this more seriously and making a plan.

 

[allthingsmickey]

Thanks for all the good advice and encouragement. I have some planning and spreadsheets to make tonight after the family goes to bed.

 

[lost*in*cyberspace]

You need to think very carefully about leaving such a career. It will be extremely difficult to reenter the job force after taking many years off. We aren't talking about leaving a fairly unskilled job.

Before taking such a radical step, I would try hiring more help, as someone else has suggested and have your husband pick up more of the at home workload (if he doesn't already).

Your kids are going to grow up faster than you think; then what will you do?

 

[a742246]

You sound like a bright person with alot of common sense. I would say enjoy your kids now. Something will come up latter because you are a go getter.

My suggestion would be to get a home equity loan and do not use it. But have it "just in case". Take a deep breathe and enjoy your kids and life.

Who knows you might be the next "Baby Boom" businesswoman.

 

[MissDaisyofTexas]

I made this same decision almost 4 years ago. I was working a very demanding job, 50-60 hour weeks, and I felt like I had no quality time with my son! When we brought our 2nd son home I quit my job to become a SAHM. It took us almost 3 years to figure out how to live within our new budget.

Our biggest changes:
* We only go out to eat once a month. I cook 29 days out of the month. Eating out is very expensive! I pack my kid's lunches. DH works from home most of the time and eats lunch at home.

* Most of the activities I do with our kids on the weekend and during the week are free. Parks, library story time, etc. We rent movies from Redbox with coupons and rarely go to a movie theater (maybe once or twice a year).

* I use a pre-paid cell phone with no internet. I pay $20-$50 a year because I just use it for important things, not to chit-chat.

Good luck!

 

[bunny]

What I don't get on here is all the posts saying "you won't be able to get back into your field later". Really? I know a lot of women who left careers/jobs to be SAHM moms and they've all been able to go back to the work force when they were ready. Did they lose time/some income? Sure, but so what? The time they spent as SAHM's they feel was more than worth it. But, they all do very well and most actually do catch up in a few years to their peers since most people stabilize in their career paths in their 40's anyway. Not everyone will be the CEO, CFO, Senior Executive and that's true for both men and women. Heck, both my sisters never quit work and I make as much if not more than them. One has more responsibility but she picked a field and employer that don't pay as much.

What some also forget is besides spending less in gas money, work clothes, eating lunches out, etc. is that you'll save on taxes also. You will be in a lower tax bracket and only reporting one income vs two. When my kids were small, there was a report done (US News and World Report I think) that said to break even a woman with two kids needed to be making about 28K which at the time was pretty good money. A lot of women working thinking they "need" the extra income are really only paying for the child care, commuting costs, work related expenses and not bringing home any more than if they weren't working.

The OP is an attorney. I will assume she is making considerably more than 28K. That doesn't mean she can't survive on her husband's income but that cutting out cable and couponing shopping isn't going to make up for the lost income. Also I would assume you can't take a break from the legal field for 10 to 15 years and then just jump back in. Lastly the OP spent 7 years in higher education and possibly over a hundred thousand earning her degree. This is significantly different than most careers.

 

[lost*in*cyberspace]

The OP is an attorney. I will assume she is making considerably more than 28K. That doesn't mean she can't survive on her husband's income but that cutting out cable and couponing shopping isn't going to make up for the lost income. Also I would assume you can't take a break from the legal field for 10 to 15 years and then just jump back in. Lastly the OP spent 7 years in higher education and possibly over a hundred thousand earning her degree. This is significantly different than most careers.

+1.

And what if the OP has student loans to repay?

When you are a professional, you can't take a work break for several years and remain competitive in your field.

 

[NYCDiane]

The OP is an attorney. I will assume she is making considerably more than 28K. That doesn't mean she can't survive on her husband's income but that cutting out cable and couponing shopping isn't going to make up for the lost income. Also I would assume you can't take a break from the legal field for 10 to 15 years and then just jump back in. Lastly the OP spent 7 years in higher education and possibly over a hundred thousand earning her degree. This is significantly different than most careers.

Even if the OP is not working in the legal field, she can continue taking the courses the Bar Association offers on an ongoing basis. This will help her to keep up with changes in the law, procedures, etc. The courses are not expensive at all and it will also be a way to keep her mind active (as she WILL get bored being a SAHM and not using her "legal brain")

When her kids get older, she will be able to re-enter her field, either back in the prosecutor's office or by opening her own law office.

 

[amylevan]

I am and engineer and quit to become a SAHM in October.

When I looked at our budget before quitting, I knew it was going to be close, but I underestimated how much it COSTS to work. Between gas savings (I had a 40 mile commute - now I only go out a few times a week...), clothes, lunches, eating dinner out because I was too tired to cook and other convenience items, we are saving more than I thought.

I plan to re-enter the working world at some point, which means I have to maintain my license (fees + professional development hour costs that previously my employer covered). I'm not sure if there is equivalent lawyer license costs, but consider that. I am lucky that my employer expressed interest in hiring back whenever I'm ready.

 

[drcmk]

I plan to re-enter the working world at some point, which means I have to maintain my license (fees + professional development hour costs that previously my employer covered.

One more suggestion--while you are "out" of the workforce, if there is no part time work, consider volunteering, even a few hours per month, in some capacity related to your profession. I've read articles about how a SAHM has many skills that should be valuable to future employers, but a totally empty resume for many years will put you at a disadvantage when you compete against younger people, with fresh-out-of-grad-school skills one day.

 

[BWV Dreamin]

I quit my career due to the stress and very unprofessional co-workers. 30+ years total working full time. I raised my kids and finally had an opportunity to quit. It has made the world of difference in my stress level and now my husband and I can actually do something together on the weekend besides grocery shop and clean.

I have had to make behavioral changes in that we have to budget on only one paycheck coming in. Our spending money does not become available to us until the end of the month after all bills are paid and savings deposited. So many times I have to say NO when a sale comes up or spur of the moment purchases.

My problem will be health insurance. Since I do not plan to re-enter the work force full time, we are saving for when my husband retires and I will have to pay for independent health insurance. So we have 4 years to prepare for this.

Our life is sooo much better, and I understand not all have an opportunity to do so. There are sacrifices. The loss of adult interaction is also quite a change. I am looking to work a little something part time to add to some fun spending but also for some social engagement. All of my friends and neighbors work so not many home during the day. Still all in all, if you can do it, I commend you.

 

[2disneyboys]

The biggest thing is to start living on his salary only right now. Then cut as needed to do so. Meanwhile bank yours to build up an emergency fund. Don't spend a penny of it. If you can do that, you'll know you're ready.

A few of my friends &/or relatives did give up careers and managing fine from a financial standpoint, the only one who "did it well" by her own admission, is the one who about 6 months before she actually quit, stopped using ANY of her paycheck. She didn't even use her paycheck to cover her current work expenses. She had it go straight to a savings account and other than balancing that bank account each month, didn't touch it. If she went out to lunch or needed new work clothes, DH's $ is where it came from. When she did quit, she had quite the nest egg built up, as well as was already used to living on the lower income. If I ever were to consider becoming a SAHM, this would be the way I would do it.

I agree with a previous poster who suggested some type of volunteer work in your field. If you ever did want or need to go back into Law, even with keeping up on your credits and hours etc, as someone in HR, I can tell you that having kept your "foot" in the field, is going to help you get your foot in the door. This is not to say you would have a hard time getting back into the field, but it would certianly make it easier on you.

Good Luck!

 

[punkin]

Even if the OP is not working in the legal field, she can continue taking the courses the Bar Association offers on an ongoing basis. This will help her to keep up with changes in the law, procedures, etc. The courses are not expensive at all and it will also be a way to keep her mind active (as she WILL get bored being a SAHM and not using her "legal brain")

When her kids get older, she will be able to re-enter her field, either back in the prosecutor's office or by opening her own law office.

I left law shortly after DD14 was born. The original plan was to go back in 3 or 4 years. Well, let me tell you, tt is extremely difficult to go back to law once you have been away for a long time. Maybe I did not pursue it enough (I am not bored not using my "legal brain") but there is a huge overabundance of lawyers looking for work and it is not as easy as you make it seem to get a job.

 

[crisi]

I left law shortly after DD14 was born. The original plan was to go back in 3 or 4 years. Well, let me tell you, tt is extremely difficult to go back to law once you have been away for a long time. Maybe I did not pursue it enough (I am not bored not using my "legal brain") but there is a huge overabundance of lawyers looking for work and it is not as easy as you make it seem to get a job.

Law can just be a challenging field even if you are continually employed.

OP, I'd look at other recently options and do some research into what you might want to be when you grow up. Attorneys make good HR specialists, Sourcing specialists and writers. Don't assume you'll step back in when you are ready at the same salary. Once you are out, making time for those CE credits may turn out to be a lot harder than you imagine.

With one income it's really important to make sure you have a good, well funded emergency fund. You won't be able to do the "down to one income" cut and people with two professional incomes seldom get nearly enough money from unemployment to cover their obligations.

Other than that, look carefully at your budget. If you are already shopping the clearance rack for work clothes and packing your lunch, you probably won't see a lot of savings in work expenses, but if you've been shopping at Nordstrom and going out every day, you will. Consider refinancing the house to a longer term and smaller payment while you a employed, just in case. Be realistic about what you can and can't manage...a friend who is very handy had no problems giving up her handyman...I don't have those skills. She is really good at gardening too, I just burn my lawn with fertilizer if I don't hire a service, or altnatively, it looks like crap.

Watch your kid expenses. We have a few thousand dollars each year into ski and snowboarding expenses. I can give up my clothing, and my husband can give up his lattes, but the kids would find it a sacrifice not to have season passes to the slope. My son in particular, as that is where all his friends are every weekend,

Keep an eye on your long term kid expenses and set expectations accordingly. A single professional income means you are unlikely to collage aid in any form other than loans.

You have an interest in crafting. Crafting expenses can eat up every bit of the money you currently spend on gas and lunch and work clothes. Be cautious.

The biggest issue I've seen is that it's that much harder to "keep up with the Joneses". Not a big deal if you don't care and can avoid it. Fatal if everyone isn't on board with "mid priced cars and maybe used cars from here on out" and "no season tickets for skiing".

 

[Colleen27]

The biggest thing is to start living on his salary only right now. Then cut as needed to do so. Meanwhile bank yours to build up an emergency fund. Don't spend a penny of it. If you can do that, you'll know you're ready.

While that is common advice, I'm not really sure it is good advice... We tried it and found it impossible because dealing with the expenses of maintaining two incomes on the proceeds of just one was ridiculously tight. Childcare took up pretty much everything that was left after rent, utilities, and other essentials and it was a struggle to cut back on dining out and groceries with both of us still out of the house 60+ hours/week. The actual transition to one income was a breeze, but the advice to live on one income first almost sank the idea before we really gave it a shot.

I agree with other posters who have said you have to be absolutely sure about leaving, because it is very possible you'll never be able to go back. In this economy even an advanced education doesn't make a person employable; when you return you'll be competing for jobs with people half your age with more stamina, more flexibility, and lower wage expectations. If you want to go back, find a way to keep a foot in the door. Otherwise it would be worth considering other options for using your education that might be more flexible (teaching, consulting) and thinking about a career change rather than dropping out of the workforce entirely.

 

[Claire&TheBoys]

When I was working full-time before my oldest was born, I was trying to make the decision about staying home vs. going back to work. I found an online calculator that estimated the "actual" salary I was bringing home, after accounting for a decrease in taxes and associated work expenses (extra eating out, dry-cleaning, extra gas, clothing allowance, daycare, etc). It helped me make the decision to stay home. Since that was quite awhile ago (~11 years), I'm sure the same one no longer exists, but if you google "second income calculator" you'll probably find something similar.

Good luck with your decision!

 

[ExPirateShopGirl]

This. From the other side of the desk I had 296 applications for a single staff attorney position within my department. Those were the number of candidates whose resumes were forwarded to me because they met the minimum qualifications for the posted position. I had to whittle the candidate list to 18 for scheduled interviews.

How did I do that? I tossed those with 6 years of experience or less. I tossed those who were not currently working as attorneys. I tossed those who had a significant break (or breaks) in work history. I tossed those who skipped from one employer to another with frequency. I tossed those who indicated we could contact their current employer (i.e., 9th year associates). You get the idea. After that I looked at which law schools they attended, class ranking, LR, Order of the Coif, etc. and other experience specific to this industry. Then I had their bar memberships verified and checked for any disciplinary action.

So, yes. It is very difficult to return to the legal field after a significant absence. Even if you maintain your bar card and participate in MCLE regularly. Doesn't mean that leaving it all behind isn't the right decision for the OP. Only she can make that determination.

I left law shortly after DD14 was born. The original plan was to go back in 3 or 4 years. Well, let me tell you, tt is extremely difficult to go back to law once you have been away for a long time. Maybe I did not pursue it enough (I am not bored not using my "legal brain") but there is a huge overabundance of lawyers looking for work and it is not as easy as you make it seem to get a job.