Making the move to becoming a single income household

[Redraidernurse]

Our household has been a double income household for almost it's entire existence. (With the exception of the first year while hubby finished his masters) In 2 months after our second child is born we will transition to a single income while one parent stays home. It is up in the air if this will be a temporary situation for approx 1 year or if it is indefinite. We will be able to meet all the bills and have been putting away extra money in savings (besides the emergency fund) knowing this was coming. While the remaining income is satisfactory to support us I am realizing that not having a second income is going to make life very different around here! Any advice on transitioning from a double income to a single income household?

[Bob B.]

We made the same transition 9 1/2 years ago when my first child was born. Now, after four children, we still survive primarily on my income.

My wife has generatd somewhere between $7,500 to $10,000 per year in freelance income each year since we began having children.

So, my advice to you is that if the parent who stays home has any skills that lend themselves to generating freelance income, give it a try.

The way we generally make it work is that when she is busy working on a project, I take over child care activities, and let her work. BTW, she is a writer and PR professional by training. All work is done at home on the computer.

[disneysteve]

Look for ways to take full advantage of having a stay at home partner. When my wife didn't work, we lived much more frugally. We used coupons more, did more comparison shopping, cooked more from scratch, used fewer convenience products, ate out less, etc. We could do all of that because she was home to facilitate those things. With both of us working, we don't have nearly as much free time so we spend more for conveniences.

[Slug]

My one piece of advice is to define an end date and stick to it. Plan for it and be prepared to re-enter the work force. By having a set end date, you can remove a small bit of the pressure carried bye the primary earner.

[MonkeyMama]

Good Luck!

Our preparation for the same move was merely never living on that second income. I presume at this point you are saving the second income, entirely. The more used you are to not relying on that money, the easier it will be. (& the more savings you will have!)

Frankly, we just wanted my spouse to be home, initially, 2-3 years or so. 9 years later... Of course, we had saved so much that we weren't focused on retirement savings, etc., the first 2-3 years my spouse stayed home. We looked at it as a very temporary proposition, and my income was pretty low at the time. I have since saved just about every raise, and we can do fine for the long-term on one income. We can do even better if we have that one income to save again - but my spouse is only 35 - there are many years ahead of us to save a second income again.

My spouse has definitely focused more on economizing at home. I suppose the other thing we really focused on was keeping food costs down (eating all meals at home).

One reason my spouse has stayed home so long is in the *smaller kids & daycare years* we figured after daycare and taxes, he'd take home a whopping $10k per year. ($10k out of $50k income!) Sure, I could do a lot with $10k, BUT to work FULL-TIME with that kind of money? & all that stress with babies and all? Just so not worth it. There are so many ways to make money as a stay-at-home person, if you need more of an income. Babysitting, working nights/weekends, etc.

[disneysteve]

Originally Posted by Slug

My one piece of advice is to define an end date and stick to it. Plan for it and be prepared to re-enter the work force. By having a set end date, you can remove a small bit of the pressure carried bye the primary earner.

That's nice if you know the end date. Many couples don't. We didn't. My wife ended up not rejoining the work force for 10 years.

[MonkeyMama]

Forgot to say, also, we knew we would save a TON of income taxes going down to one income, so I was able to change my withholdings when my spouse stopped working, and increase my take home pay pretty significantly. Maybe 10% - 20% increase. If you prefer the big tax refunds, is fine. BUT, you will probably have more income than expected, in the end, whether you take it now or wait for bigger tax refunds. You'll likely drop to a lower tax bracket while also getting large tax breaks for having children. I find most people refuse to give up the tax refunds, but I have always taken just enough taxes to breakeven. It can make a significant different to a monthly budget when adjusting to only one income.

[snafu]

I've transitioned in and out of the workforce several times. Since my career had out-of- pocket expenses like clothes, grooming, 2nd auto operation, income tax, conveniences etc. I used those costs as a base. I was able to balance the benefits of my time with savings by finding ways to reduce cash flow. I also did a few work-at-home projects whenever I got bored. It's an interesting challenge to find ways to make-up for reduced income.

[Nightfly]

With a two-year-old and another on the way, my "better half" works full-time during the week, and I use my commercial driver's license solely on weekends and bring in money on Sat./Sun. We save on child care while I make a bit more than most part-time gigs pay...

[LivingAlmostLarge]

Same consider the real costs and stress as MM pointed out. My income while pretty decent would be eaten alive by daycare and taxes.

[thefrugallery]

My suggestion be to minimize your household as much as possible to save up extra money. Have a rummage sale, sell some books, sell unwanted things on Ebay or Craigslist, etc. Minimizing your household can be very liberating. The fewer things you have, the less can go wrong with it! I've been doing this the last couple of months while we prepare for a major life change, and I've been able to save up over $500. Granted this is not a huge amount, but if you're going to a one-income household, every bit helps!