One Income 101: Starting Out

Living on one income is not an impossibility for the less-than-wealthy as long as you are willing to get off the consumer track and live on a budget. If your goal in life is to have the biggest house, most luxurious cars, and latest technology, then you might not be able to pull it off. But if you're content with less and are willing to live more modestly, then I believe one-income living is a possibility for most people.



A few things to consider if you are wanting to have a spouse at home:

1. Evaluate your expenses. Analyze both your fixed and variable expenses. Housing is probably the most important fixed expense, and this is the one that can determine your ability to stay home or not. You can't pull it off if you buy more house than you can reasonably afford on one income. When Steven and I were house hunting years ago, we were both working, so we qualified for much larger mortgages than the one we wound up with. We knew, though, that I wanted to be at home, so we looked only at houses that we knew we could pay for on one income. Our house is smaller than that of most of our friends, but it's never been a problem to pay our monthly mortgage.

2. Evaluate your debts. We were fortunate not to have any student loans, car payments, or consumer debt, so admittedly, this was not an issue for us. If you have any debt, you'll need to figure out if you can afford to pay it down in a timely manner on only one income. If your debt is very large, it may make more sense for both spouses to continue working for a while.

3. Determine what to keep and what to chuck. I'm talking about variable expenses here. What is so important to you that you want to keep it in the budget? What are you willing to give up? One expense that Steven and I got rid of was cable TV. We like TV, but it wasn't that important to us. What was important was the newspaper. We changed our newspaper subscription from weekends only to daily delivery. That was a worthwhile expense for us, yet still much cheaper than cable TV. Can you pare down your food expenses by cooking more and eating out less? Can you lower your utility bills somehow? Can you give up the weekly mani/pedi and do your own nails? Are you willing to give less extravagant gifts to family and friends? What are you able and willing to do to lower your expenses?

4. Make a budget, then use it. Try living on only the income that you intend to keep. Put the second income into a savings account. This allows you to see if you can successfully live with a smaller budget, and it builds up the all-important savings account.

5. Make sure that you're still able to save if you have only one income. If you spend every penny you make on your regular expenses, you'll be in serious trouble when bad stuff happens. And the hard times will come. Things break, people get sick, layoffs happen. (All 3 of those have happened to us in the 9 years I've been at home.) You'll need savings to get you through those things. Also, you need to save for retirement. If you're unable to live on one income and put money away, then it's a bad idea to give up the second income.

6. Charitable giving. Steven and I are Christians, so we believe that everything we have is from the Lord. It is our responsibility to give back to Him. I realize that not all of my readers are Christians, so this is a category in which you need to do whatever you feel is best for your family. Maybe it's just some weird psychological thing, but we actually feel more rich because we do give a portion of our income away. I'm not one to say that the Lord will give to us materially if we just give to him (we don't follow the health-and-wealth version of Christianity), and I will admit that at times it does hurt to give, but we've never been without when we really needed something. Somehow, the money does manage to be there when we need it.

I don't claim to be a financial expert or anything, but these are the basic first steps that can help you to move towards the goal of having one spouse at home.

Tomorrow: Shopping strategies for saving money.