Do you NEED 2 incomes?

[disneysteve]

I hated being a SAHM, it's boring, it's hard work and overrated.

Again, I'm not suggesting that everyone needs to stay home, or wants to. I know several women who would go out of their minds if they had to stay home with the kids all day, every day. That just isn't their personality. They need to work for their own sanity. I get that. I'm strictly asking about the financial end of things.

[Seeker]

But the question is really a personal/family question. Each family has their own unique plans for the future and each family has plans for their "comfort" level with the financial ends of things. Each person within the family has also to decide what they want for themselves or each other (to work or not?; is usually a personal decision).

Me and DH both work. Could we "make do" on one salary alone? Probably, provided it were my salary. Definitely not, if it were his salary alone. If my salary were 50% of what it is now, then we'd need both our salaries.

And we have no kids. But we live in a high-COLA.

To buy a house in this state, almost certainly requires both people to have worked... and to be working... at least to quality for a house in the cities or the suburbs of the cities in 2008. Granted as little as 15 years ago, it would have been do-able on one income.... but house values have not come down to 1990's levels.

And I'd also have to admit, if I did not marry and did not change jobs, I'd have a very difficult time paying the property tax bill alone (because I bought in the early 90's) and now property taxes are based on the current property value (not the price paid). So, based on my own income, I would still have needed a doubling of my income to meet today's property taxes. Or if I had not changed jobs, and had not met DH, it's very probable that I would have had to sell, and go back to renting.

Times have changed greatly.

If it's true that 70% of people going into bankruptcy is because of medical reasons, then that's a valid concern. The medical system is a problem of rising costs, that are not within our control and nobody knows when or if it will hit them personally.

Education costs have also risen dramatically. Food, utilities, the costs of getting to/from work... all costs are rising.

Yes, having two incomes makes life and the future a little more comfortable. Is it necessary? Probably not.

All depends on your experiences; it depends on your personality, and your definition of "waste" and definition of "needs" versus "wants." Not everyone's definitions are the same.

Basically it boils down to you and the people whom matter to you (your family; your people) -- nothing else should really matter.

How come society is so "comparative?"

[asmom]

Again, I'm not suggesting that everyone needs to stay home, or wants to. I know several women who would go out of their minds if they had to stay home with the kids all day, every day. That just isn't their personality. They need to work for their own sanity. I get that. I'm strictly asking about the financial end of things.

Oh yes, I know. The time when my kids were infants were really the best days of my life but they were also the lonliest and most exhausting. It's hard to think of living on one income without remembering that.


But back to the financial aspect of things. When we bought our first house 14 years ago, I remember my best friend reminding me that the rule is to buy only enough house so that if one of you couldn't work you could still pay the mortgage and all your other bills. Pretty wise for a 25 year old. It really makes me uneasy that if something happened to one of us, we would be in dire straits. No we wouldn't lose our home or anything like that but things would be very, very difficult. This is the first time in our marriage that things have been like this. It's not a great feeling. Thankfully within the next 6 months, things will be different. I think we should all strive to be in a financial place where we don't need to have two incomes. I think most people don't even consider that to be a possibility but it is.

[cptacek]

We are working towards one income, or me working on the farm with him. Right now we are trying to expand quickly and it is just taking a lot more money to do than we (I?) thought.

A few years from now, we will be in a completely different situation (I hope). Farms take a lot of money to start and you don't get any income from most of your investments for at least a year, most likely more. Disasters and high inputs make it even harder.

We are sacrificing a lot to do this. We live apart most of the week (because there are no jobs around here that pay more than 1/2 of what I make in IT), and when I am home, we mostly do farm stuff. The honeymoon will most likely be the last vacation we take for at least 3-4 years.

If I lost my job, then our plans for the next few years would obviously have to change. But, I can sacrifice for a few years (or get a job where they let me telecommute...that would be perfect) to get us on the right track.

[seattlemanicurist]

You post some good topics steve!

We could live off of my income alone, but there would be very little left to save and payments on debt would be minimum. My SO brings in a few hundred a month less than me, and I don't think we'd be able to stretch it on just his income unless we found cheaper housing and/or stopped eating out and cut way down on phone and internet service. I don't pay for child care year round as we have split custody, and I pay child support regardless. In a few years she will be too old for day camps.

There is really no reason for us to not both work, and I couldn't imagine not working anyway. I love my job and my coworkers and my entire social life revolves around work. Even if SO were a millionaire I'd be working full time. As it is I take all the extra hours and overtime they can give me, and it's not just for the money. It's partly because I like being there, and partly because when it comes time for promotions they notice who is always willing to go the extra mile.

[cptacek]

I love my job and my coworkers and my entire social life revolves around work. Even if SO were a millionaire I'd be working full time. As it is I take all the extra hours and overtime they can give me, and it's not just for the money. It's partly because I like being there, and partly because when it comes time for promotions they notice who is always willing to go the extra mile.

You have the perfect job! Good for you. It is awesome to like your job so much...

[seattlemanicurist]

You have the perfect job! Good for you. It is awesome to like your job so much...

It really is a great job, and I feel very fortunate to have found it. I have worked jobs I hated before and it affects you whole life.

[disneysteve]

You post some good topics steve!

Thanks. I try and post things that I often wonder about because I figure if I'm wondering, so are other people.

In a few years she will be too old for day camps.

I started at day camp when I was 7. I continued as a camper for 5 years, then a CIT, a Jr. Counselor and a Sr. Counselor. I didn't stop going to day camp until I was a 2nd year medical student, so about 23 years old, a total of 17 summers. The only reason I stopped at that point is because I no longer had my summers off, otherwise I'd probably still be spending my summers in day camp.

[tripods68]

[QUOTE=Seeker;186055]
If it's true that 70% of people going into bankruptcy is because of medical reasons, then that's a valid concern. The medical system is a problem of rising costs, that are not within our control and nobody knows when or if it will hit them personally./QUOTE]


Consumers Cut Health Spending, As Economic Downturn Takes Toll - WSJ.com

This article just highlight the rising cost of medical hospital plan/treatments that is often overlooked but a reality nonetheless.

[Like2Plan]

DS,
I think DH and I do okay right now, but I think I have always been more worried about retirement.
I think a lot of major expenses have been gradually pushed over to the employee. Some of these big bills are due a little bit each year (you have to keep saving), but folks can't fund or don't think about it being "real" until they have to actually come up the money--like when it is time for the child to go to college or being within 10 years of retirement.
Here are 3 big things that have changed:
1. health care--when I was growing up--it was not unheard of for an employer to cover 100% of the cost with no deductibles or co-pays. Now, I think it would be really unusual.

2. college costs--already discussed. I figure college costs now vrs then are about 10X as much when DH and I attended around 30 years ago. Starting salaries--only increased about 3 X (I looked at DH and my starting jobs then vrs how much the are paying these days).

3. retirement--used to be you stayed with one company your whole career. You received a defined benefit. Now, it is unusual to stay with the same company your whole career and you make your own contributions--if you are lucky you get a match. You take on all the risk in managing your portfolio. In a downturn (or your company goes bust and you didn't diversify or you didn't diversify and you "had a feeling" about tech stocks...), you don't retire because you can't.

I think the old rule was save 10% for retirement--that was in the day where you were going to receive a defined benefit. Now, I'm not sure 20% (just for retirement) is realistic to achieve a comfortabe retirement. You have to devote more of your paycheck towards health care. Paying for college for your kids may not be possible.

Doing it all on one income may be possible for some, but I think it is getting harder and harder to do. You won't really know for sure how well you did until you've reached the age of 100 or so...

[QueenOphelia]

I feel the way many do on this topic. There are obvious variables that affect the need for two incomes:

Do you live in a rural or small market where you can live comfortably on 60K or do you live in a major market/city where 125k barely covers the basics.

Are you frugal? Never had a brand new car or 5 star vacation? Do you clean your own home? Do you stick to community theater and never see a professsional play/concert when it comes near your town?

Finances are very personal and relate to how a person lives. I could never live the way some on this board do. I love to save.... but love to spend.

[ceejay74]

Very interesting question. The answer for my current situation is absolutely not, because all members of my family took on a lot of stupid debt in our pasts, and now we have to pay it all off. Between credit cards, personal loans and student loans, we absolutely need two incomes (luckily we have three) just to pay the minimums.

But then I took my budget sheet and pretended I did not have these debts. Subtracted those monthly payments, extra debt repayments, most fun money including travel savings, cable and Internet, cut cell phone in half, got rid of Netflix...and my income was just $489 short of being enough for the three of us to live on! If we got rid of the condo and moved to an apartment, we could do it.

I know we won't be out of debt for several years. But it is sort of exhilerating to know that when we are, we'll basically be able to live on one income, and save, invest and have fun with the other two--or have one or two of us stay home with babies!

[osadg]

At this point in time, my husband and I do need 2 incomes. The truth though isn't that we need the two full incomes, it's that we need about 1 and 1/4 to meet all of our current financial expenses, get our debt paid down, and save for retirement. In reality once our debts are paid off we could live off just one of our incomes, but like someone else said-it doesn't make sense for one of us to not work, and we would both go a little stir-crazy. Once all of our debts are paid off, we will be tucking more of that money into more savings and retirements.
I have to agree that most people don't actually "need" the second income. My sister gave up her 6 figure income to be a stay at home mother after not wanting to come back from her first maternity leave and yes, their budget changed drastically but they've never struggled with the adjustment.

[disneysteve]

Do you live in a rural or small market where you can live comfortably on 60K or do you live in a major market/city where 125k barely covers the basics.

Even that doesn't totally work because in those rural areas, salaries tend to be lower for similar work as in major markets. If you could live in a small town but earn a big city salary, you'd really be set.

[tripods68]

Even that doesn't totally work because in those rural areas, salaries tend to be lower for similar work as in major markets. If you could live in a small town but earn a big city salary, you'd really be set.

Thousands of Bay Area tech workers earns bigger salaries but lives/commute daily from Sacramento, Stockton, Elk Grove up and down San Joaquin Valley. They do it even with their average salary $150K can't barely cover a median condo prices mids $500K.