Could your family survive on one salary?

Some couples choose to go to one income: to have a baby, to go back to school, to start a business. For others the change is involuntary and terrifying: layoff, illness, a business going under.

Those who seek change have the option of preparing for it. Those who have change thrust upon them can only scramble to minimize the damage.

I interviewed two couples, one from each camp, for “How to become a one-income family,” my current Living With Less column over at MSN Money. They discuss what they did (and didn’t do soon enough) to deal with the challenges.

The “choice” couple’s story might encourage those of you dealing with debt. They started out $70,000 in the hole: student debt, a HELOC and an auto loan. Within two years they’d paid most of it off and created a $23,000 emergency fund. To do this they sold a bunch of stuff (including the car they’d just purchased) and slashed their expenses ruthlessly.

These days they don’t have to be quite so careful. For instance, each now gets $100 a month in mad money vs. the $25 a month of their bare-bones-budget days. Yet they still live frugally, especially since they’ve had a second child. What’s interesting to me is that neither of them has a full-time job, but they earn decently and spend carefully.

Has your family made — or been forced to make — a similar change? What advice would you give to folks looking at voluntary or involuntary downsizing?


11 Comments

  1. In a sociology class cross-listed in Women’s Studies, I mentioned that women did not HAVE to work, that a family could make it on one salary. Well, the young women were ready to riot. The professor, younger than I by about ten years, shushed them and told them to listen. The gist of what I had to say–women do have the right to work, but it is not necessary to work for them to live and not do without. It is the second car, the car for every child that becomes a teen, the TVs in each child’s bedroom, excessive fast food consumption, not cooking from scratch, throwing out to get the latest in whatever, our consumer culture.

    What does that have to do with your question? Well, people don’t need all they think they do, all they must have. Sudden job loss is a hard one to overcome.

    Of course, either parent could be the breadwinner and either could care for kids.

    The prof agreed with me–our culture and patterns of living were what necessitated both parents working. Societal expectations were the blame.

    We did not make a change; we started off out of debt and stayed that way. I stayed home, sewed, cooked, did not want or expect things others had. However, I loved to sew and cook and clean. Yes, I was/am a sick woman. I sacrificed to be able to stay home with my children because that was what I wanted.

    Geee, it seems I went far astray.

  2. My husband and I are lucky that we have not been forced to live on one income; however, we are striving to do just that. January 1st, 2010, we had over $25,000 of debt (over $800/month in revolving payments!). To date, we have less than $10,000 (and just $385 in revolving payments with the car payment of $227 dropping off next month.) We are on track to be debt free by the middle of 2011 with a fully funded emergency fund by the end of 2011.

    Our motivation is that neither of us likes our job. I want to be able to live on less so that my husband can get out of the factory he’s been in for over 5 years and take a job that may not pay as much, but he would be much happier doing. Also, we want to start a family here in the next few years. I would like the option to stay at home if I want to and not have to worry about the bills.

    Like Practical Parsimony, my husband and I dont feel that kids need as much as everyone is giving them. That is fine for others kids, but we have talked about what our kids will have and how they will be raised. They will NOT live in a family with ANY debt other than the mortgage (which we are working toward paying off early as well.) We dont want alot of “stuff” for the kids. We want to limit time in front of the TV. We want them to learn how to be handy like their daddy, responsibility like taking care of the animals, planting and harvesting the garden and cooking from scratch like mommy, and enjoy nature and adventures with the both of us.

    Hubby and I dont have the nicest things out there. To be frank, we dont WANT the nicest things out there. We are OK with the hand-me-downs that we’ve received in terms of furniture, electronics, etc. We are content with what we have, and I think that is most important. We dont want or need for anything. I feel that once you get to that point, you see how wasteful everything else is and how much debt drains you and the budget.

    Oh, we also saved over $100/month by either downgrading or switching companies for our insurance/utilities/services, etc. Every little bit helps!

  3. Last year we lived on one salary.

    Aside: MINE… I would also riot if someone suggested that *women* do not have to work… that seems to be a pretty provocative statement for a women’s studies class– much less so that starting out saying that either parent could be the breadwinner… but I’m no expert in women’s studies. Still, not everyone believes in the right to work or not work. My mother definitely believes that everyone needs to contribute towards society whether through paid employment or volunteer work… I suspect my MIL does as well though she’s too midwestern polite to make those views known in mixed company. That may be connected to my SIL’s beliefs that SAHM is the only way to do it, even when the dad is long-term unemployed (not that she has said this explicitly since I’ve had a child or in front of my MIL). My father, otoh, has always had the goal of financial independence, though he seems to be unable to stop working now that he’s his own boss. *end aside.

    I agree that the best way to do that is to live on one salary before salary #2 gets cut off and save all the extra. It was really nice to have that extra buffer. Making sacrifices towards a goal made them more bearable.

    We were fine living on just one salary, but I have to say that I am very glad to have the second back, even if all we’re doing is saving it. I like saving it. We’ve got mortgage to pay and retirement to fund and 529s to fill.

  4. Rochelle in SD

    Many years ago my husband and I have lived on one salary – three years was the maximum when our son was small and I became a full-time college student since the jobs in our locale paid so poorly they wouldn’t cover child-care costs.

    We were able to live well, though frugally, one my husband’s income as and E-6 in the military. We were able to gain financial assistance for my school tuition,and I won a scholarship to pay for 2 of the classes I needed to graduate. I clipped a lot of coupons and shopped very carefully. When infant’s shoes went on sale I bought a pair in every size, and later sold all my son’s clothes at the local consignment shop, where I was also a frequent customer.

    For extra money we got creative-I found part-time work, took in mending, “shopped” road-side cast-offs when I wanted to redecorate.

    Fast-forward to current times- my husband and I work full-time in California and our tax bills are substantial. I am confident that we could easily live on his salary since our annual tax bill is almost equivalent to my gross income.

  5. My husband I started out living on LESS than one salary, since we were both in grad school. We were blissfully unaware of the availability of student loans. So..we lived like students.

    I see my current students living like “employed middle-class” people, only they’re using student loans.

    Many of these people-both undergrad and grad–start out in big trouble, with debt on their backs. Painful to witness.

    This may seem only tangentially related to your topic, but I think it is relevant. To pay off debt, I suppose you could live like a student after the fact!

  6. Nicole, I must tell you that the subject was women’s right to work, desire to work and be independent, and children’s needs, and husband’s and society’s expectations. One young woman said women HAD to work for the couple to support a family. I prefaced my statement of “women don’t have to work” for the couple to support the family with this statement–women have the right to work, should have the right to work or stay at home with the children if they were married and the husband worked. However, if a woman was single for whatever reason, she might need to work. But, a woman does not automatically HAVE to work. (Then, all Hell broke loose.) The prof who insisted the group be quiet and listen died two weeks ago! She totally agreed with me and had to quell the young girls, feminists all who were not listening and were in no mood for and old person (all of 41) to tell them to stay home like she did…lol. Nope, not at all. Women don’t necessarily HAVE to work if the money is managed responsibly. However, working for extras, being exhausted, eating fast food, and never being with the children is not necessary unless the woman just WANTS to work.

    I had a friend who broke her two-year-old’s arm because of the frustration of being forced by her husband to quit her executive job and stay home with the child she bore out of duty. She never admitted she broke the child’s arm, but she was so contrite and could not look me in the eye for months.

    I still stand by the statement that the prof agree with–women don’t HAVE to work to help support the family. If that family is overconsuming, that is the problem. Of course, there are situations where a woman must work whether she wants to stay home or not.

    My daughter was a SAHM for 15 years. After her divorce, she now has to work even though she would rather still be at home with her children. I fully support the SAHM. I applaud the woman who wants to work. I defend the rights of both to do as they please, if possible.

  7. Ha ha to the women feminist posers. You know, a few years ago, I caught up with one the most outspoken feminists from work. She left my company after a few years but you know, once she had kids of her own, she was happy to have her husband support her and became a SAHM. I thought that was very ironic.

    The reality is that when you are young, you can’t always foresee the way life will pull you in all directions. You don’t know how hard it can be to juggle work and kids. You think you can do it all and be the perfect everyone to everything. That is not possible.

    We can definitely live on one salary if needed, but still have 2. We have been putting it to good use though. A lot of it has been going to debt reduction (mortgage), 401K (20%) and beefing up the emergency fund. I don’t know how long things will last the way they are now so I’m trying to take advantage of the income while I have it.

  8. ChildofHipHop

    We have had it both ways. We lived in Detroit for the last six years and at one time or another, each of us faced a jobless situation. Thankfully (prudently?), whenever we both have jobs we save, save, save and pay down debt so it has never really been an inconvenience.

    Once again, we are down to living off of one salary by choice – to move back home to be closer to aging parents. DH is looking (it’s been a looong year) but has a promising interview this week. Once again, if we are blessed with the second income, we’ll replenish savings and ferociously attack debt again.

    We have a plan that in 3 years, we’ll by choice again be one income as I want to pursue my ministry and hopefully be raising our adopted child.

    What’s interesting to us, is that my SIL who has a fabulous job but not a frugal lifestyle is always looking to us (one income) as her payday loan. Go figure.

  9. I think people who live off 1 income, ESPECIALLY when they’re in debt, are so ambitious! I wish we could do the same, and who knows, we still might. Definitely an inspiration.

  10. We recently became a one income household due to the birth of our first child. Thankfully we had planned ahead and were debt free except our mortgage, and had saved up a sizable one year emergency fund. We also started living on less than one income well before we actually had to. When we did finally become a one income household, it wasn’t as hard as some might think. My advice? Plan ahead and start living like you have one income well before you need to. You’ll be glad you did.

  11. It is interesting to reflect that when families relied on one salary perforce (because by and large women weren’t allowed to work, at least not at decently paying jobs), we didn’t have anything like the “lifestyle” we have today.

    * Houses were smaller.
    * No one owned two cars.
    * Cars were unsafe at any speed.
    * Cars didn’t have today’s bells and whistles.
    * Only the very wealthy sent their kids to private schools, because public or parochial schools were pretty good.
    * No one imagined owning two televisions (many people didn’t even have one).
    * People had one phone that was hard-wired into the wall; local telephone service was reasonably priced.
    * There were no cell phones.
    * There were no computers.
    * And so there were no pricey wireless “plans” and no expensive DSL charges.
    * Health costs weren’t driven by insurance, technology, and Big Pharma.
    * Blue-collar jobs paid a living wage; labor unions saw to that.
    * Unions also maintained pension funds.
    * Public college tuition was low enough that a single earner could pay most or all of the cost without running up tens or hundreds of thousands in debt (my father gave me $2,000 a year to cover tuition, books, room & board, and all my other expenses).
    * Textbooks cost no more than ordinary trade books, which were modestly priced.
    * Newspapers were abundant and cheap.
    * Magazines subscriptions were reasonably priced.
    * Few people flew anywhere; if you left town for a vacation it was by car.
    * Gasoline was very cheap.
    * So were motels.
    * People didn’t eat out at the drop of a hat.
    * Movies cost just a few cents.
    * Few people had dishwashers.
    * Few people had clothes dryers.
    * Many people had neither a clothes washer nor a dryer.
    * No one ever heard of a microwave oven.

    We didn’t have as much. And what we did have didn’t cost as much as today’s versions of those products and services. Often the stuff didn’t work as well, either! :-D

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