Wednesday, June 22, 2011

Can I Live on One Income?

When I was pregnant with my daughter, I took a temporary secretary position since we had just moved and I knew I was going to quit to stay home. When I was packing up to say goodbye to the bunch of engineers I worked for, many of the men asked me when I was coming back, and they were actually surprised to find out I wasn't.

My shock was that my co-workers thought it would be financially feasible for a mother of a newborn to come back to a barely over minimum wage job. But their constant questioning made me write it all out.

$8/hr for 40 hrs/wk= about $250 in take home pay

$250
-$20, $4 gas each day
-$5 wear and tear on car, more frequent oil changes, etc.
-$150 (the cheapest baby sitting service in the area)
-$15 brown bag lunches for the week that would be over what I would normally purchase if I ate leftovers
-$5 for approximate replacement clothing from extra wear
-$5 for the candy jar/donuts/sponsor my child/birthday chip-ins
-$15 disposable diapers for the sitter (since I intended to cloth diaper)
-$10 formula (since I intended to breastfeed)
[-$25 tithe (or more if you do off gross)]

Total money made=$0 ($25 if you don't tithe)

Yep, that's right, a big goose egg. And I'm not even eating out for lunch, and I'd probably go through more diapers and formula then I allotted, and who knows what other incidentals.

Did working 40 hours a week and handing my baby to someone else for no money sound attractive? Nope.

But how can you know if you can actually swing living on one income? I'd advise you to do what I did. I worked my entire pregnancy and spent none of the money on living expenses. We practiced living on one income while we had two.

My husband recently encouraged a coworker to do the same thing. She noticed that the discipline problems her children exhibited went away when she was home on extended vacation. But could she live on one income--they barely made it on two? (Of course, I wonder if she figured out how much of that second income paid for her to obtain a second income.)

She took his advice, and for 6 months, she used her income for needs like daycare/work costs that would disappear entirely once she quit but didn't touch the rest and set up a budget working solely off of her husband's income.

The great thing about practicing is if you fail, you've got that secondary income for a safety net and you're creating one in savings for when you leave. Once you have figured out what you need to do to stay away from dipping into that second income, you are ready to quit practicing and do it for real.

So do you think it's impossible to live off one income and work at home? I'd encourage you to:
1) Count up the cost of work--Is it really worth it?
2) Practice living it.
3) Quit work and stay home knowing now you can do it.

I did it. My husband's co-worker did it. I bet you can do it too.

7 comments:

  1. I tried figuring this out with my sister-in-law one day while she was pregnant. After all the daycare expenses & work expenses, she would be bringing home less than $4 an hour (BEFORE taxes).

    She still chose to go back to work. I didn't say anything more since it's obviously her choice, but it just seemed to me that it would be worth "losing" a $4 an hour job in order to spend that time with your child.

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  2. Hi Carolyn. The above example was what I remembered (I did this 5 years ago) but I remember it basically coming out like this: I would make maybe $20 a week, or I would have to learn how to save $80 a week. A $60 difference.

    It was definitely worth finding ways to tighten the belt by $80 to stay home rather than work for $20. (And much more Enjoyable!)

    Crazy enough, when I showed my co-workers the above chart I made, they STILL thought I'd come back.

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  3. I never sat down and figured the money out like Melissa did, but when I was pregnant, someone offered me a full-time, low wage job that sounded incredibly boring. I too wondered how the person who made the offer expected me to pay for child care on such a low wage.

    For me, the best choice was staying home, so I didn't really consider the job. But some women do well working too. It's just such a hard decision, and not one to be made lightly.

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  4. It's difficult to justify the cost of daycare and expenses that go along with working (new clothes??) And I have been blessed to be able to stay home with my kids...I have had friends whose husbands were hardly making money while in law school, but they still made that choice to be home with the family...hoping they would pay back loans eventually.
    That being said, I have felt, at times, and I know women who feel the same, that staying home is just not for them...they need that time away from their kids to be a better mom. So maybe that is why someone would take less than $4/hour?? Great post Melissa.

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  5. Melissa,

    I loved this post. I just finished reading the Total Money Makeover, so what you're saying here really resonates. I feel so blessed to say home with my kids (that too on a student budget). God has been teaching me that you can live on very little, but it does take discipline {and rice and beans;)}.

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  6. When we were first married, we lived off my husband's salary and put mine away in savings and for vacations, etc., knowing we wanted me to stay home after we had a baby. I live in the Washington, D.C., metro area where the majority of families have two working parents. My husband works in the editorial field, which is on the lower-end of the payscale compared with government and private-sector jobs in this area.

    I'm constantly amazed at how many women don't do the math and think they can't live on their husband's salary because of what they precieve as "wants" versus true "needs." I've been blessed to work from home and I make about what I would "bring home" after all the expenses Melissa mentioned above--plus some more, given that I have four kids. So I get to stay home, work and be with my kids without the hassles of a full-time, 9-to-five job.

    It can work for you if you take the time to explore your options carefully.

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