Living on one income seems like an overwhelming prospect, with the unemployment rate in the United States at 8% to 9.5%. However, it is probably a smart idea to at least think about it, and set up a plan for living on one income in case the worst happens. In the hopes of helping you prepare, here’s my story about how my husband and I prepared and lived on one income for almost 13 years.
I met my husband when we were only 21 years old. We dated for three years, and agreed upon a life plan of career and no kids when we got married at 24. (I know. It seems so ridiculously young.)
For some reason after we got married, I, not wanting our great love to die with us (What can I say? I was melodramatic at 24), had a change of heart. I announced that not only did I want kids, but I wanted one of us to stay home with them.
Learn more: Becoming a Stay at Home Parent - Let’s Talk Money!
Living on one Income: How We Did It
After watching my husband’s head almost pop off, he graciously acquiesced (it took him 4 years to graciously acquiesce), and we created a plan for us to learn to live on one income. Here’s how we did it.
Step One: Gather Information
As I explained how to do in family budgets, my husband and I figured out all of our expenses. We looked at all of our fixed expenses and all of our variable expenses, and in looking at expenses we realized a few things.
- We were smart when we purchased our home because we bought it using only one of our incomes. Sure we could have bought more home if we had used both of our incomes, but for some reason we, being in our early 20’s, decided that we wanted to have lots of left over money for fun stuff like traveling. So we purchased our home with only one income thinking that the second salary would go into savings. Our need to travel saved the day for us concerning this big expense.
- The only debt we had were our cars and our house.
- Some of our expenses were because we were both working. For example, we had large commutes and our car expenses were high. Neither one of us cooked and our networking lunches cost us a pretty penny. Finally, work attire in those days was more formal (people still had to wear suits), and formal attire was expensive. The work expense list went on and on, and we quickly realized how much money we would save by one of us staying home.
- The baby would cost us additional money. Then we added in the cost of child care. This when things got interesting. Financially if things had stayed the same and we added in our child care expenses our 2nd income profit would be cut in half. If we had twins or a second child later, child care expenses would have caused us to lose money.
Learn more: 29 Ways To Prepare For Baby Financially
Step 2: We ran the numbers for each of us staying home.
The next step for us was to decide who would stay home with the baby. This was a pretty easy decision for us as my husband’s career was simply taking off way faster than my career. As we sat down and tried to project whose career would be more profitable over the long run the writing was on the wall. I would have to be the one to give up my career.
Step 3: We cut expenses.
After gathering information we realized we did not have to cut too much, mostly because the house we purchased was purchased with one income. What we were losing in our income, we made up for with the following.
- I had to start eating at home. This was actually a pretty easy task as anyone who has a new baby knows, it’s far easier to stay home and scrounge for food than to drag yourself and the baby to a restaurant.
- My car expenses dropped dramatically as I no longer had a long commute.
- All of my clothing expenses dropped dramatically. No longer was I having to dress in more expensive professional attire. My clothes started coming from Target, Ross Dress for Less, Marshalls, and other discount stores.
- I took over the grocery shopping and quickly developed a plan for saving money at the store. Grocery Shopping on a Budget outlines how I did this pretty carefully.
- We tracked our expenses to the penny daily, weekly, and monthly evaluating where we could cut expenses further.
Step 4: We had to get rid of a few things.
- We could only afford one car payment. We implemented some of the new rules before I quit my job and used the extra money to pay off one of our car loans.
- We got rid of all of our movie channels and switched to basic cable.
- We decided to forgo vacations for one year starting with when I got pregnant. (My husband and I were big travelers. This was a tough one for us.)
- We evaluated all of our insurance plans and re-negotiated the ones we could.
- We became less social with our non-kid friends. This was a big expense for us as we were super social. Amazingly this was the easiest one for us to give up. We were simply to tired to maintain the busy, expensive, social life-style of an adult who had no children.
Learn more: Cut the Cable and Save over $1000
Living on One Income: The Result
Finally after we did all of this work we decided that we could live on one income. It seems like a lot of work and sacrifice, but honestly, those first couple of years we really didn’t feel it. In fact we discovered that we ended up saving more money that first year on one income than we had saved any year before that. It was actually kind of a shock to us. And to this day my husband and I both would love to go back to the newly married 20-somethings and pop us on the head for not doing a better job with our money.
Do you live on one income? If so how do you make it work?
Kelly K.
Check out these other posts about Living on One Income:
- Steps to Living on One Income - Steps 1 to 3
- Steps to Living on One Income - Steps 4 to 6
- Steps to Living on One Income - Steps 7 to 9
- Kelly W’s story about Living on one Income
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That’s awesome! We have several friends were it made sense for the husband to stay home (sometimes they’ve been in school part-time, or have a side gig) and I love seeing that trend! I recently talked to an old friend whose husband is now staying at home even though the kids are approaching middle school and high school. They said it works great because he can do all the errands, cleaning, and such while they’re at school and focus on helping with homework and spending time with them when they’re home. It’s the reverse of what most people do, but it’s been working out great for them. Teens need nearly as much supervision as toddlers! 😉
This is awesome. My husband and I did this very thing - listed out our expenses and income - to determine that having him stay home with our son made more sense than both of us working and paying for child care expenses. He’s been a SAHD for a little over year now and we couldn’t be happier with the setup.
Alison Aikins says
You make this sound so easy….My husband got a better job in a different state, and I therefore have no job…Okay, so maybe not easy, but you definitely make this sound doable…however it is harder to do when it is forced, and not as thought out/planned. The good thing is that we do not have kids right now, so we do not need to worry about that expense, however my student loans cost more than some children do!! (even with a forbearance, I still have to have over $55,000 paid off in 6 years—on 1 income!) (Oh we haven’t paid for TV in 3 years-and I LOVE IT!)
Anyway, thank you for the motiviation to sit down and take something that was forced and turned it into a plan…and thank you for the other suggestions in the comments…those are some really good ideas…
Budgetmama1 says
Thank you for those great tips!
I wish I could go back and tell my 20 something pre-parent self to stop wasting money on unnecessary items because one day we may want to live on one budget. Great tips, Kelly!
JackieWalters says
Great post Kelly. Our family has been a one income family for 10 years. It was difficult at first but you find a way to make it work. We cut out Direct TV, newspaper & magazine subscriptions, eating out, daycare was eliminated, I made most of our meals from scratch and yes, I even washed out my Ziplock baggies. Since my kids are old enough and can fend for themselves I’ve been thinking about going back to work part-time or maybe not!
When I first got married, my husband and I agreed to live on one income. It’s easiest to start that way. Even if a couple doesn’t plan to have kids that extra money can be saved for retirement.
Feels like my life right now! We have been on one income for 3.5 years now. It has been challenging. We got rid of cable & use Netflix & Hulu Plus for t.v., have a strict budget and I hardly shop for myself. Still, we managed a few vacations, bought a house and have a little spending money. I do look forward to my own career (which I am preping for now) once my boys are in school. Any money I make will be extra fun money & savings. Just 1.5 years to go!
This is terrific advice that applies also for couples who want to have one of the spouses be entrepreneurial and have their own company. At various times in our marriage (23 years and 3 children!) we’ve each pursued entrepreneurial endeavors that resulted in reduced or no income from one of us. It wouldn’t have been possible if we hadn’t made the same decisions and instilled the same behaviors with us and the kids.
We’ve been a one income family for 13 years now (any money I make goes straight to retirement or college). However, what I’ve found is that cuts made slowly became less and less over time as we got more efficient with managing our money, or at least we stopped feeling them as cuts. However like you college makes me nervous as well. We’ve had savings for both of our kids since the day they were born that we contribute to monthly, but the cost of college now, even in state college, is pretty scary. We looking at increasing my work, but we also have considered more bare bones living like we did when my kids were babies.
It really is scary at first, for the one who’s becoming financially dependent upon someone and for the one who becomes the sole bread earner. And I won’t lie, it takes a lot of trust on both people’s parts, and it also takes a tremendous amount of communication. Also, just because partners roles are changing, it doesn’t mean that either one can check out of being involved. When you both work together it’s when it works the best. Good luck!!!
I think it’s pretty easy to go to logical when you have a partner that you trust implicitly. That’s the one thing my husband and I have always had in common, our opinions about how to manage money has always been the same. I think when things get more crazy is when you first have to get to the same place. Honestly I think until you get to that same place, no strategy will work whether your are a one income or two income family.
We ended up having me stay for for 11 years because it did not pay for me to work, day care and commuting expenses alone would have put me in the hole. It did require many of the same adjustments you mentioned, travel was cut, no cable or satellite, cooking most meals at home, but even with slow economy it has been working for us. Now that my youngest is in 2nd and oldest is in 8th I am looking at full time work again just to bump up savings for college.
It’s great to see how you tackled what can be a stressful and emotional life change so logically and strategically. I was raised on one income, although my parents pretty much started out that way so didn’t have to “downgrade” in anyway (meaning they never had two incomes to start). I think it may be easier that way, although this is a great strategy to handle cutting your income in half - whether by force or choice!
Jen@mamaZEN says
We will probably be dropping to one income very soon. Kind of scary since we have only just begun to plan and we have two little ones already. Thank you for telling your story. It is nice to hear how someone else did it - makes it feel more doable!