How to Live Off One Household Income
Sat, Nov 28, 2009
It’s not uncommon to find both spouses working in todays society. For many this is a choice and for others it’s not a choice. In fact, as a Money Map Coach I’ve met couples who desire to live off of one household income, but can’t because their expenses or debt are too high.
At the point my wife and I decided it was time to start family planning we immediately knew we wanted to be in a situation to live off of one household income. At that particular time, we were both working full-time jobs and living comfortably on two incomes. We felt having her become a stay-at-home-mom would be a great opportunity to spend more time with our children and allow us to further instill our values into their lives.
Making the move to one household income wasnt easy, but it can be done if you set your mind to it. There are a few practical steps to take when making the transition.
Steps to transition to one household income
- Remove one income from the budget. Its better to put this income out of your mind and pretend it never existed.
- Determine if you have a shortfall and if so, how much it’s going to be for any given month. Looking at the shortfall will help stimulate conversation about changes in spending that may need to be made.
- List out all of your expenses and prioritize them from most important to least important. Most likely your basic living needs will be at the top of the list.
- Start from the bottom of the list and determine where you might be able to make cuts in spending, either by removing certain expenses completely or cutting back.
There are many discretionary spending reduction opportunities in a typical monthly budget. Much of the time these can be found in the entertainment category.
Sometimes its difficult to cut back on expenses for emotional reasons. For example, some people don’t want to cut back on eating out.
If this is the case, you have to weigh your goal of one household income against certain expense cutting opportunities and decide which is more important. Cutting back or removing expenses may require some tough decision making.
5. Once you’ve made spending adjustments based on your priorities determine if you’re still in the red. If so, its time to identify what else is keeping you there. Perhaps it’s debt or a large monthly mortgage payment that was once easily affordable with two incomes.
Overcome debt roadblocks
What do you do if debt is standing in the way of living on one household income?
I coached a couple one time that was so serious about getting debt paid off and living on one household income, the husband sold his truck and downsized to something that wasn’t as appealing to him. This reduced his total debt obligation and also his monthly payment. Sometimes downsizing is the answer.
If the debt is with credit cards or school loans, you obviously can’t make it disappear over night. Another approach is to try to generate more income to pay off the debt quicker. This could mean working an extra job a few days a week. If this doesn’t work, unfortunately, it may mean postponing the one household income goal until a certain amount of debt can be paid off.
Additional motivation to pay off debt
Basic expense cutting helped, but unfortunately didnt get us to our one household income goal. We had to get serious about paying off car loans and a student loan which provided us more motivation to pay off debt than what we had before.
We were able to allocate almost all of my wife’s income to our debt snowball. Obviously, we weren’t paying as much towards our debt as we could have before deciding we wanted to live on one household income. You can imagine this particular change greatly increased the velocity of our debt snowball.
When to make the transition to one household income
Looking back, I think our experience would have been better if we didn’t wait to figure this out when we decided to start our family planning. Everything is always more stressful or urgent when it’s time sensitive.
If you have debt standing in your way from making the transition and youre working against the clock, the stress factor can increase greatly. So, my recommendation is to try to live off of one income when you first get married. The extra income can always be applied to savings to help increase the size of an emergency fund or to pay off debt. Either way, you will avoid having to transition later.
Final thoughts
If youre doing your part, also know that God will do His part too.
The mind of man plans his way, but the Lord directs his steps.” (Proverbs 16:9 NASB).
If you’re having difficulty in getting to your end goal, keep planning and invite God to help you work in this area of your life. Should you cut expenses? Should you take on an extra job? Is having one spouse stay at home right for your situation? Seek the Lord to help guide your steps and answer these questions.
Have you been successful in living off one household income in your family? If so, what steps did you take to accomplish this goal? Let us know in the comments.
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Tags: Budgeting, Marriage and Money
Excellent post. I’m guessing this something on the minds of many couples who are thinking about starting a family. Thanks for putting it together—definitely going to get a bookmark from us!
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Andrew, thanks for your comment. Yes, it was definitely strong on our minds and I’m grateful my wife has been able to be a stay at home mom with our kids. I hope others will find this post helpful when considering doing the same.
Planning is key I think. Get on a budget, pay off debt, and get a good emergency fund in place. That would put couples in a better position to live in one income.
Well said. I think the budget or spending plan is key. I think it’s also helpful to start off by living on one income and adjust you lifestyle to that income versus two.
Thank you for putting this together! My husband and I have been working towards living off of one income recently, and it has been tough. I would eventually like to stay home when we start a family, and looking back, I wish we had started living on just one income right into marriage (its been a little over a year). Your post has lit the fire again though, thank you!
You’re welcome, Katy. I just want to encourage you to work hard towards doing this if it’s something you and your husband desire. With proper planning and probably some sacrifice it can be done! My wife and I are very pleased how here staying home has worked out for our family. Only a year into marriage? If you start now you’ll be ahead of where we were!