For over four years now, my wife and I have enjoyed living off one income.
While our lifestyle might not be appealing to some, we absolutely love it. Every day I thank God that he has allowed our family to grow so close. It is a blessing my wife is a stay at home mom. She helps create such a healthy family environment.
Since this is a sensitive topic to some, let me remind you that this post is not designed to convince anyone to stay home. Nor is it to say you are a bad parent if you don’t. This is a personal reflection on our pathway, our experiences, and the blessings we enjoy. And yes, of course, dad can stay at home too. But, since a stay at home mom is more common we’ll stick with the stay at home mom theme.
Remember, the transition to one income with a stay at home wife does not come without sacrifices. In this post, I’m going to lay out the game plan we used to be able to comfortably live off one income.
Will She Be A Stay At Home Wife or Mother?
Answer this question possibility as soon as possible.
It would have been extremely difficult for my wife to stay home with the kids had we not made the decision very early in our married life. If you are married without kids, you need to have this discussion by the end of the week – will one spouse stay home with the kids?
It is impossible to make a plan if you don’t have a plan. The unfortunate reality is that far too many couples do not plan to live off one income, and when children arrive they cannot afford to live off one income. You’re marriage money relationship will suffer if you don’t agree on these goals.
Make sure the seeds you are planting today are seeds you wish to harvest tomorrow.
This post assumes you have decided that you want to live off one income.
Live Off One Income Today
From the moment you decide to have a stay at home mom, you need to start living off one income.
By living, I mean you need to reduce your regular monthly spending (excluding any debt payments) to one income.
This helps you in two significant ways:
First, you get to feel the spending flow and budget limitations of living off one income. Living off one income is different. Typically, it involves embracing a lot of frugal activities you once were able to avoid simply because “you didn’t want to”. Now you will do those things because you must.
For some families, the one income lifestyle will feel too restrictive and too limiting. Others, like my family, will find frugality a challenge that offers some gratifying rewards.
Second, living off one income provides some disposable income.
What do you do with the extra disposable income?
The first step is the most important – work desperately to get out of debt. It will be very difficult to live off one income if 15-25% of your income goes towards paying for things you already own – student loans, credit card debt, second mortgage … You goal is to be able to get access to and full use out of that one income. For my wife and I, it would be much more difficult to live on one income if we did not already pay off our debts.
- If you are in debt, use the second income to pay off debt. I do not believe my wife could be a stay at home wife if we had a lot of debt payments. It would consume far too much of our disposable income. While my wife was working, we saved enough money to buy a car with cash, pay off student loans, and pay cash for two master’s degrees (we both decided we wanted to get our Master’s Degrees before having kids).
- Use the extra income to fully fund an emergency fund of 6-9 months of expenses. I know this number is higher than financial advisors typically advise, but when you are living off one income and add kids to the mix, there is a lot more potential for emergencies.
- Use the extra income to save to pay cash for any before-kids-whims – for us, it was vacations and education. I think the two years before our daughter was born we traveled from Memphis, Tennessee to Papua New Guinea, Australia, New Zealand, Bahamas, Europe, and Canada. My wife finished her final Master’s degree class about a week before our daughter was born.
- Use extra income to prepare for additional costs associated with having children. Since the average cost of having a baby is now over $3,000, you will need to make some preparations. You will also need to spend money on kids to buy baby clothes and other baby related products. Furthermore, you may choose to help fund your kids’ education. That will be easier if you have some money allocated before the child is even born.
Make Purchases According to Your Goal of Being a Stay at Home Mom
House
When it comes time to buy a house, do not get a mortgage based on both of your incomes. Buy the house based on one income. You will be locking yourself into a long term commitment, and if you overextend on your house, you will lose your ability to choose if your spouse stays home.
Don’t try and buy the most expensive house. Buy a house that is comfortable enough for what you need.
Car
I buy cars with cash. I suggest people buy cars with cash. If you are a person who gets car loans, make sure the payments are affordable, according to your income and suggested budget percentages.
Both of you will likely need to accept the reality that cars now serve only one function – transportation. If it gets you from point A to point B, it is the right car for you.
By carefully monitoring your ‘big’ purchases you will be paving the road to have a stay at home wife.
Review and Cut Your Budget
Often times, your spending will need several amputations for it to fit into a one income budget.
Review the budget and identify everything that is fixed (consistent, reoccurring spending each month). This will include anything where you get a fixed monthly bill. Then mark everything that changes from month to month. Some families have too many fixed items in their monthly budget.
Frugality can involve cutting your disposable income, but you must still have some discretionary income with which you can use to make good purchases. If your fixed items are too high, consider canceling or reducing a service. For example, could one of you use a prepaid cell phone? Do you really need cable? Are you using your gym membership?
Saving Money Is As Valuable As Making Money
Some people are masters at spending a little time and saving a bunch of money. Sometimes the money you save is more valuable than the money you would have made.
A stay at home mom can save a lot of money by doing any of these money saving tips:
- Cook from scratch, clip coupons, make a list, plan a menu – avoid the restaurant by eating at home.
- Shop second hand
- Take care of your laundry service in house
- Make household items you would otherwise have bought
Earn Extra Income
It is quite possible that even after trimming the budget you simply don’t make enough to make your payments. In this case, one of you might choose to work an extra part time job to help pay the bills. This might even be a home based small business or a hobby that evolves into an income. Many people have found that Ebay is a good source for extra income.
The earlier you prepare, the more likely you will be able to live comfortably on one income.
Any other suggestions on how to comfortably live on one income? What did you do so that you could have or be a stay at home wife or a stay at home mom?
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{ 10 comments… read them below or add one }
Craig, this post is provides advice that’s nothing less than brilliant in all aspects, but the savings tips were the most significant for me.
6-9 months in reserve is a better cushion than the traditionally recommended three months. The economy is MUCH less certain than it was when the 3 month rule was popularized, and a larger savings account may be the single best insulation we can have against this.
“Saving Money Is As Valuable As Making Money”–people knew this and practiced it for thousands of years, only now do people ignore this with the availability of credit, insurance and unemployment benefits. Saving was, is and always will be a basic survival strategy.
.-= Kevin@OutOfYourRut´s last blog ..Good Retirement Planning Should Include a Low Cost/Debt Free Lifestyle =-.
Living off one income first and paying off all debt is what we did.
Looking back I wish we would have built a bigger emergency fund (debt free 2/2008 and our child born 7/2008) but circumstances cut our plans short. Trying to increase it on one income has been a challenge.
Mentally it is tuff giving up cable, cell phones and other “necessities” that we have become use to while we had dual income.
@Gholmes. Great point about the emergency fund. When you live on one income you are more vulnerable during an emergency so getting that in place before dropping down to one income is a great idea.
As far as giving up extra things we found the initial transition was hard, but within months we hardly missed those things any more.
@Kevin
As always, thanks for your kind words.
Like I said @Gholmes having a bigger emergency fund is more important in this stage. Because if you do need to use it in a significant way it may be harder to rebuild it. This obviously depends on what the salary is on the ‘one income’ you keep.
I do think focusing on saving money is a great strategy – it is all within the individuals control.
When my wife was pregnant, we evaluated if we wanted to have her stay home (or me) or for her to work. The problems we had were, her job prospects were mainly entry level type jobs or starbucks type work. So she would be either working 40-60 hours at an OK job or not making enough to cover the extra costs and quality daycare. So my wife has worked a few part time jobs and is now starting a photography biz part time. My work schedule is real flexible so we can do that. That way she is a stay at home mom but is still working, getting out of the house, and a part of the rest of the world. Some days are real tough, as she enjoys working and the kids can make anyone batty (my wife is also ADD so it effects her there too) but she has such an awesome love for the kids and just rocks at being home with them. Her photography biz is growing to where- when the kids are in school she can ramp it up to 3/4 time right away and get back into the swing of working. Or if her biz takes off- I would gladly stay at home with the kids and do some part time gigs. Thanks for the post!
.-= Ted´s last blog ..Letter to My Mother =-.
@Ted
Small biz projects are a great way to do things half way. Your own business typically provides the flexibility necessary to be a parent and make a side income. Thanks for your comment.
I am a stay at home mom. We have cut a lot of costs by simplifying our food budget and eating only wholesome fresh stuff. It is amazing how much money you waste on “stuff” like popcorn, chocolate, soda etc.
We have also got just 1 phone, a smart talk perpaid from Walmart. It costs just $30 a month for 1000 minutes, and 1000 texts, which is plenty for us.
I’m a work at home wife (newly wed) and my husband is also working at our home office. We plan to live a simple life but still leave with convenience. Before we get married, we already bought appliances for our apartment. We both have credit card but we always pay in full each month. I hope we could be able to raise our savings this year so we can afford to invest more.
Thanks for the great article. Though my children are grown, I am in a place where I may have to return home. I am living with fibromyalgia, which along with recent foot tendon surgery, is making everyday activities difficult. When I was last working before the surgery, just getting through the days was so hard. I am a health care professional, so not being on my feet all day is not an option. I am exploring my options, but your article has given me a new direction and food for thought. Please keep up the good work, it is so needed. Thank you.
he he, I am glad you mentioned the stay at home dad / husband too
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Even if you do not plan to stay at home I think it’s a fantastic idea to still live off one income… The savings can be incredible and really bring long term comfort to a life.
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