I’ve been asked a few times what changes we are making as a family to afford my taking a step away from the workforce to be home more. After all, we will soon be living off of less than half of our annual income. We are very fortunate in that my husband’s salary is now enough for us to live off of without mine; that hasn’t always been the case. That being said, there are still changes we need(ed) to make in order to adjust to a new lifestyle. Don’t get me wrong, we’ve never lived lavishly by any means. Being millenials, we’re strapped with a whole lot of debt, mostly from Sallie Mae, who just so happens to be my arch nemesis and owns my soul until 2032. So, while these decisions are never one-size-fits-all and our situation may be vastly different than yours, today I’m sharing the changes we’ve made to make one income work for us.
Plan in Advance. We made the decision for me to leave my company way before the loss of any income occurred which gave time to research, strategize, and save. The decision to live off of one-income should never be taken lightly.
Eliminate Credit Card Debt. Thankfully, we didn’t have a ton of this – mostly just a couple of big purchases we made before making this decision (new mattress/bed and kitchen appliances). Be sure to pay off the debt before eliminating the income.
Cut the Cable. We invested in a Roku with Netflix and Hulu and kept a very basic, non-HD cable package only because our provider gave us a great deal. We already have an Amazon Prime membership so we can stream through there, too. We also kept WiFi, of course. This was a $100/month net savings.
Refinance the House. This may not be an option for everyone but it was the make-or-break in our situation; everything hinged on this working out. We bought our house at the end of 2011 when the housing market was the lowest it ever got and so our house was a steal. Since then, the value of our home has increased significantly. We capitalized on the appreciation by refinancing our home with a cash-out option. We used the cash to…
Pay Off a Car. In 2014, for the first time in my life, we bought a brand new vehicle – an SUV for me. Later that year, Todd got a new car, too. As you can imagine, two new car payments are expensive. We considered downgrading our vehicles to afford the monthly payments on one income but we were still coming up short. Being able to use the cash from our refinancing to eliminate the monthly payment altogether was a huge blessing. We decided to pay off my car only and use the rest of pay off a student loan that had an interest rate higher than the loan on my husband’s vehicle. Some families decide to sell one vehicle and share the other but that isn’t a viable option for us.
Gas. Eliminating my 66 mile round-trip commute per day was financial savings in itself of at least $150/month or so. Be sure to factor gas and resulting maintenance savings as a credit to your budget.
Cleaning Services. Sadly, we will be retiring our monthly cleaning service which will save us $100/month. This one hurts me the most. It’s a luxury, I know, but one that I love.
Groceries. Much to my husband’s chagrin, I’ve always been one to pay for convenience. That said, spending more for groceries at Publix and Target has never been an issue for me because they’re closer to my house and shopping there really is a pleasure. From now on, though, we will do most of our shopping at Aldi (do you know they have a ton more organic stuff now?) and I’ll start coupon clipping again for other stuff when I can. I’ll have to make more trips to Wal-Mart vs. Target, too. It’s definitely not as convenient and we won’t have name-brand everything (we actually buy a lot of Publix and Target brand stuff now) but it’s worth it. We anticipate about $125/month savings or more from this. Groceries is the one bill that you have 100% control over, so this is where you can really get the most bang for your buck.
Eating Out. We don’t do this a whole lot (because kids) but we’ll do it even less frequently now. The great news here, though, is that Todd works at the HQ for a restaurant chain and so we eat there for free. So, if we ever get the urge to dine out, we’ll always consider going there first. Then we’ll run through the list of places where kids eat free… but Todd hates all of those places so we’ll end up eating at home. That said, it’s a no brainer that eating out as a family of 4 can be costly; this is an easy expense to cut.
Pre-School. My 4 year-old was in preschool 5 days/week and is now going 3 days/week. This change saves us about $150 per month. However, even with the savings, her preschool was the one thing Todd told me would have to get cut completely because paying for it would have made things too tight for us. So, I found a way to make sure it was covered which was…
Find a Side Hustle. You’re looking at mine. While it was never the intention, the partnerships I’ve made with this blog have already provided the extra we needed to pay A’s 2017 preschool tuition and I’m so thankful for that. In the fall, she’ll be old enough to go to GA Pre-K (which is free). Todd’s income will pay for all of the necessities and any blog income I make going forward will help fund the “extras” like dance classes for the girls and vacations and whatnot… and, maybe even a cleaning lady if I hit the big time! Other moms I know plan events, do online surveys, work as Virtual Assistants, do photography, run Etsy shops, provide in-home daycare, and even clean houses on the side. In addition to blogging, I plan to pick up consulting jobs and part-time contract work here and there; I’m not counting on it as income, though, since it won’t be guaranteed.
Practice. Start trying to live off of one income before eliminating the second. Treat the second income solely as savings and use it to pay off any outstanding debt. See how your new lifestyle works for awhile before taking the plunge.
We’ll, of course, have to temper our day-to-day spending but that’s a given. So, tell me – how do you make living off of one income work for your family? Share your tips below!