How we prepared to live on one income

spending tracker appWhenever people ask me how I’m able to have three young kids, a full time job, a blog, and travel for work so often, I have one answer: I have an extremely supportive husband who is a Stay At Home Dad.

The next inevitable question: “Really?? How did you figure out how to live on one income??” Again, I have one answer: a lot of planning. So while this is not something I typically post about, but get asked about all. the. time., I wanted to share some about how we decided to go down to one income and the steps we took to prepare for it.

Caveat: this is what worked for us. It may not work for everyone!

Who stays home?

What feels like a million years ago, although I think it was only seven, we decided to start trying to have a family. Because we are Planners, we wanted to decide on a plan for childcare in place even before we started trying. Based on the hours required for our jobs, we pretty quickly decided it made the most sense for one of us to stay home. But who?

When we looked at our respective jobs and career goals, here are the questions we asked:

  • Who makes more money?
  • What is our individual job satisfaction?
  • What are our individual career goals?
  • Who actually wants to stay home?

What would our life looked like if I stayed home? What about if the Home Warrior stayed home?

Obviously it’s a lot to think about! Ultimately, we decided that the Home Warrior would stay home for the following reasons:

  • He had been in a high-stress sales job for almost a decade and was feeling burnt out.
  • He wasn’t satisfied with his career trajectory and wanted to go back to school.
  • I really like my job.
  • We both preferred what our lives looked like with me working and him staying home.

Looks like an easy decision, right? There was one catch: he made almost twice what I made. That’s right, if he quit his job we would have to learn to live on one-third of our current income. Plus we would eventually have a baby, and people kept telling us that kids are expensive.

We planned for a year

Once we decided on a course of action, we had to figure out the steps to make it happen. First, we took account of what we were currently spending, without actively making changes. After a few months of tracking, we had a pretty good handle on the things that didn’t change that much from month to month: mortgage, utilities, gas, car payments, credit card payments, and so on. Then we looked at the variable expenses: groceries, meals out, entertainment, shopping, vacations, and other fun money.  

At this point we knew what our spending looked like in the past, but had to figure out a reasonable way to make it work in the future. We listed every single anticipated expense, from cell phone to dog food to internet to groceries and so on. Then we added in baby expenses: diapers, carseats, etc. Finally, we figured out what we had spent in the past, and looked for places to compromise moving forward. Did I really need to spend $400 per month on clothes? (No!!) Did he really need to spend $300 on tools he would never use? (No!) Do we really need cable? (Maybe.) Can we drink boxed wine? (Uhhh….) We joined Costco, and our grocery spending actually went up but our overall food budget went down because we limited our meals out. All together we were able to cut close to 20% from our budget just by deciding to live a more frugal life.

We were about nine months out from our tentative “one income” date and had a proposed budget for variable spending in place. We had committed to it, but it still wasn’t quite getting us where we needed to be so we looked for other places to make cuts. We refinanced our house so our monthly mortgage payment was lower. We worked to pay off our credit cards. My employer introduced a deal on homeowners and car insurance, so we were able to save around $150 per month on those two items.

Eventually the only debt we had beyond our house was my car, so I set my mind to pay it off in six months. I had always paid slightly more than what I owed anyway, but had about 18 months of payments left. Anytime I had extra money it went to the car. All of that money I would have spent shopping went to the car. My quarterly bonus went to the car. My Road Warriorette income went to the car. And it paid off! I was able to get the car paid off in four months instead of six.

Save, save, save

This left us with about four months until the Home Warrior planned to leave his job. The final step: do a dry-run to see if we could actually live on my income alone. Since we had gotten our expenses down to our planned one-income level, it seemed doable, but we wouldn’t know until we tried. All of the Home Warrior’s income went into savings, letting us practice our new frugal lifestyle and also giving us a cushion. We were able to meet our savings goals, make some tweaks to the budget, and prove that we could do it! He was able to give his notice almost exactly a year after we decided to live on one income.

Note: The Home Warrior wanted me to convey that this was the most important part of our planning. I seriously can’t overstate the importance of this step! You will learn pretty quickly if your budget is realistic, but with a safety net. At the same time you’re building up your cushion, which will be critical if you have a month where you go over your spending plan.

Maintain

Fast forward six years. We have three kids, have moved twice, and I have the same job, but we are still living on my income. It takes a lot of focus, and more than a few sacrifices. The budget gets hours of scrutiny every month to make sure we are living within our means. We don’t go out very often unless family can watch the kids. I don’t buy much in the way of new clothes, and the Home Warrior doesn’t buy nearly as many gadgets as he used to. But we have so much time together as a family, we have way more flexibility than we used to, and we consider ourselves very lucky.

To sum it up:

  • Decide who will stay home
  • Track your expenses
  • Figure out what you can cut
  • Determine a budget
  • Live on one income to practice and save
  • Maintain the focus!

Here are some of my thoughts about what it’s like to be a business traveling mom and how to stay connected to my family while I’m gone.

Readers, do you  have any questions? Do any of you have a stay-at-home spouse? How do you make it work?

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  1. My wife is a stay at home mom, and it definitely takes lots of planning and sacrifice. But it is so worth it!

    And it’s worth mentioning that the travel my job requires makes vacationing possible for us. I haven’t paid for a hotel in 6 yrs and my wife always flies free. If it weren’t for that, we would never be able to go anywhere! 🙂

  2. Kudos to you for making it work! You accomplished in a year what I’m planning making happen over the next 10 years. I paid off my student loans, car loan, and one of my rental properties over the past 2 years. Am working on paying off #2 rental property this year, and #3 over the next couple of years. Then we’ll focus on paying off the house. My wife’s car and student loans will be paid off over the next couple of years as well.

    When everything is paid off, I’ll quit to focus on the blog, real estate ventures, and taking care of the kids (6 and 2 now), while Anna will be able to focus on advancing her career. You story is inspiring… keep it up!

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