While some parents relish the opportunity to drop off the kids at day care and head to work, others feel desperate to stay home with their little ones.
If you fall into the latter category, this article is for you. Living on one income is undoubtedly a challenge but certainly not an unattainable fantasy.
Here are 10 tips to make it work for your family:
1. Have a Heart-to-Heart With Your Spouse
The first step to successfully transition to a one-income family is to get your spouse on the same page. This is a major change that will require lifestyle adjustments by both of you. If your significant other isn’t on board, you may find your efforts are sabotaged by your spouse’s spending or resentment that could irreparably damage your relationship.
If you think your spouse won’t be thrilled, approach him or her with the idea during a low-tension time, such as on a date or during a lazy weekend. Don’t insist that you’ll be staying home. Instead, say you’d really like to stay home and was hoping for some help in looking over the budget to see if it would be possible.
2. Create a Budget Based on 1 Income
Hopefully, this approach will leave your spouse feeling inclined to at least take a look at the possibility of living on one income.
At that point, you need to draw up a new budget, one that assumes you’re no longer in the workforce. These are a few of the expenses you may be able to cut completely:
- Child care
- Gas/public transportation expenses related to your commute
- Clothes for work
- Lunches and breakfasts on the go
- Mobile phone for work
Then, there are other line items that you could probably reduce. Maybe you can stretch the time between haircuts now that you’re not in an office every day. Or you may have fewer take-out dinners since you’re now home to cook.
Some people suggest taking this new budget for a trial run before you actually quit your job, but that many not be practical for some families. Until you actually leave the workforce, you’re going to need to pay for child care and other work-related expenses.
3. Cut the Fat in the Budget
Now that you have your one income budget in front of you, what does it look like? Are your expenses far beyond the money your spouse brings in each month? Don’t despair. We’re just getting started here.
You have to take a second pass on the budget and see where else you can trim.
- Can you eliminate cable television?
- Can you switch to a cheaper cellphone package?
- Can you shop around for better rates on insurance?
- Can you refinance your home to bring down your monthly payment?
- Can your spouse pack a lunch?
- Can you find a cheaper date-night activity?
You get the idea. Look at each and every line item with your spouse and ask: Do we need this and if so, is there a way to pay less? For more inspiration, read this article on how to slash your monthly expenses by $1,000 or more per year.
4. Drop Your Debt
Perhaps the best way to free up a lot of money in your budget is to get out of debt. If you weren’t making a $300 car payment or sending $200 to credit card companies every month, wouldn’t it be easier to get by on one income?
5. Consider Becoming a One-Car Family
One way to both drop debt and save money is to become a one-car family. This will require a serious lifestyle change for many families, but it can be worth it.
Getting rid of a car often means:
- Dropping a car payment
- Reducing your insurance premium
- Reducing the amount of gas you buy
- Cutting back on opportunities to shop and spend without planning
This strategy can be extreme, but I have friends who make it work. It’s easiest if you live in an area where you can walk to a friend’s house or a local park. It would also work well if you live in an area with good public transportation.
For those of you who live in rural areas, this may not be the best option if you think you’ll feel isolated and overwhelmed if you’re stuck at home all day.
6. Decide Whether to Downsize
Another major lifestyle change that can reap big financial rewards is downsizing your house. You could move to a smaller home or maybe to a less expensive area.
Take careful stock of your current home and future plans. If you have empty rooms and aren’t planning to have more kids, then maybe a smaller place is a smart choice. Not only could you end up with a lower mortgage payment, but your utility bills and property tax assessments could shrink, too.
It’s a seller’s market in much of the country now, so if you’ve been thinking about finding new digs, now may be the time to sell your current place.
7. Sell What You Can to Create a Cushion
Maybe selling the car or the house simply aren’t options for your family. That’s OK. Chances are you have plenty of other stuff in your house that you could sell.
You’ll want to sell all those extras because you’ll need a nice cushion in your bank account before you leave your job. No matter how well you think through your budget, something could throw you for a loop. Maybe the neighbor kids are always eating lunch at your house, which ups your grocery bill, or perhaps you end up running to play dates every week and use more gas than expected.
Your emergency fund is going to smooth out all those wrinkles in your budget. So sell your old, unwanted stuff for top dollar and bank the cash.
8. Review Your Insurance Options
Don’t forget to review your insurance coverage before quitting your job. What does your family get through your employer? How can you replace it?
It’s vitally important that you avoid gaps in crucial coverage so you need to figure this out in advance. For health insurance, the federal law COBRA may let you continue your health insurance after you leave work, but the price could be astronomical. Other options may be signing up for coverage through your spouse’s workplace benefits plan or buying medical insurance on a government exchange.
Regardless of the route you choose, check the prices and include any premiums and out-of-pocket costs in your budget calculations.
9. Get Creative When It Comes to Family Fun
Finding cheap entertainment is another secret to successfully living on one income — no more heading to the mall for no particular reason on a Saturday afternoon. You may also have to skip Disney in favor of day trips closer to home.
10. Look Into Other Employment Options
Even after you’ve gone through all the steps above, you may find the budget is still too tight to make one-income living work comfortably for your family. In that case, don’t assume that staying home with your kids means you have to forgo earning money completely.
Depending on your circumstances, you may be able to work out a telecommuting arrangement with your current boss that allows you to work part time from home. Another option would be to find a work-at-home job. Finally, don’t overlook other employment opportunities for your spouse. Maybe he or she could find a different job or apply for a promotion that will give your family the money you need to finally stay home with the kids.
I made the transition from working mom to work-at-home mom more than four years ago. I thought I had planned fairly well for the transition, but when the time came, it felt a bit like skydiving. You take the leap before you have time to change your mind and trust that your parachute (i.e. budget) will work.
If you, too, are ready to take the plunge, I say good luck and Godspeed.
More Money-Saving Reads: