This one has been kicking around in my head for awhile but it really has been picking up steam over today.
I am going to discuss two fundamental questions:
1. Is a single income household the right thing for you?
2. Is it a realistic way of life for people these days?
To the questions at hand:
1. Is a single income household the right thing for you? Well that depends a whole lot about you, your spouse, your family and what you really want out of life. You and the spouse being on the same page fully is probably the most important thing, far more important than what I or anyone else thinks.
As to the broader question I think the answer is often yes. One person being at home to take care of the kiddo's and even potentially home school them can often have positive effects on their development and such at least unless you are crappy parents then they are screwed anyway. In terms of raising children to school age a single income household is probably a desirable thing.
Unless the second wage earner makes pretty decent dough it is often a wash between having them working and earning a wage but paying child care, car payment and or assorted costs of needing a second car, eating more convenience foods and such.
2. Is a single income household a realistic way of life for people these days? I have heard people say it just isn't realistic to have one wage earner and I certainly disagree.
For instance my in laws are a single income household with a fine standard of living, because FIL makes a lot of money. This is however not to say that unless you make a whole bunch of money a single income household will not work. To a certain degree saying 'just go out and make more money' would be a bogus excuse because it will not work for everyone. Most folks could figure out a way to earn a bit more if they really tried by getting a little bump in pay, picking up a few more hours or trying for that promotion but often this is not enough to radically change your lifestyle.
To all those who say you have to make a bunch of money to be a single income household I have two words, the Dakins.
Simply put if it is really important to you to have a parent at home with the kids then make the choices necessary for it to work in your financial situation. This is almost invariably going to mean some sort of sacrifice even if it is relatively modest. If you say you want to have a parent at home but are not willing to give up the ski boat, the two new vehicles with loans, assorted other keeping up with the Jones's crap and quite possibly that house you can't really afford anyway then you don't really want it! The degree of sacrifice will depend on your income but in almost every case you will have to accept a different lifestyle than has become the norm.
You can do it if you want to bad enough.
Thoughts?
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18 comments:
My family of 5 is living pretty good on a single income. We live in a modest house, older cars that are paid off, and have no credit card debit. We have a 2 week old baby so we are getting some gov't help with WIC which is a godsend for the formula. I can tell you that I make less than 30k a year and still pay for insurance, and put in 8% into my 401K and have plenty left over for everything else. I'm also going to school full time and it would be very hard if my wife wasn't home with the kids all the time.
I know I kind of rambled but it shows that it can be done if you try.
We've been a single income family since the birth of our first child, 15 years ago. No regrets at all. When the wife worked, all we did was pay more for her work clothes, we went to eat out more because we were both tired, we spent more for gas to get her to work, we paid more taxes, etc. and once our first child was born, we would have had to pay for child care. That's when she quit her job and stayed home.
We have no real debt now except mortgage and one car payment for the newer car. We still live good, we've got preps, guns/ammo, 1 yr food supply, savings, 401k, we still eat out occasionally and go on real vacations, drive newer cars, etc.
Wife saves so much money by having time to shop for good deals, clipping coupons, cooking healthy from scratch, while keeping the house clean and taking care of the kids, etc., etc., etc.
Jack
I think a single income family is very doable - as long as you don't get into buying all the latest "stuff". And there's lots of resources out there that could help an interested family find their path, from free websites like thesimpledollar.com to personal finance books like "Your money or your life."
And having a parent at home that actually parents keeps kids from joining gangs, teaches them honesty, instills the value of hard work - all stuff our society could use more of.
The Dakins?
Is that the Dakins v1.0, v2.0 or The Dakins v3.0? The guy isnt exactly a poster child for contentment and quality of life.
Sure, a family can live on one income, as long as the one-income-earner isnt someone who eschews 'real jobs' because they dont want to 'work for banksters' or 'become a yuppie'.
Cash flow is king. The first rule of survival is to avoid survival situations. The second rule is that the most important material aspect of preparedness is income. you can't do ANYTHING without income.
You have to have the basics covered to even make a run at a single income. Shelter, transportation, medical insurance, food, clothing and a modicum of recreation or vices. If your one income cannot cover that without going into debt, then it ain't going to happen. Or is shouldn't.
Also, a second income is a kind of insurance against unemployment. We KNOW that people are going to get sick and employment circumstances change. These are givens. Lose your job, lose your health insurance. Just try paying those COBRA premiums...generally costs in excess of $500 per family and can go much, much higher. Go without coverage and get sick, and what I mean by sick is virtually any trip to the hospital or any disease requiring ongoing treatment - kiss your financial future goodbye.
Unless you are well-prepared, trying to get along on one income is a risky proposition this day and age. Unless of course you have independent means of finance or make a whole lotta money (insert your figure here - it is never enough regardless of how much you make if you aren't smart with it), or on welfare, or receive reliable alimony or child support (situations I wouldn't want to be involved).
As with all other opinions, YMMV.
We lived for many years as an E-5 in the late 80s and early 90s (I was a slow burner) it sucked but there is no price that can match Mama at home raising the kids and cooking the meals. I got to go out and find wood to heat the house since we couldn't afford to use electric up in Michigan. We almost never ate out but always had plenty of home cooked food and beer. Life was good and the kids are still talking to me and I am still on the starter wife 20 plus years later. If family is important then you will find a way to live on one income.
there is another way to do two incomes - one works days and the other works nights. It can be done, and done well - it just requires determination.
My wife and I both had full-time jobs. When my wife was pregnant with our second child we were both laid-off at the same time. Something snapped or clicked, and we felt that we should make the single income move. I found work soon enough, and the Mrs. focused on the kids.
Friends thought we were nuts to sacrifice the second income. We argued that it would have gone to caregivers and vehicle were and tear. One of us would still have to take off if the kids were sick, because no pre-K or childcare facility would allow sick kids. Again, the day care costs would have been considerable.
We had to live lean, (still do) and it was difficult. A couple of years later some friends, who saw us make it work, made the leap as well.
Not everyone can make the change. We think it is worthwhile. Besides, if we had the bigger income, we'd just spend it!
We almost live in a single income household. Mrs BBB does work some, but probably less than most part-timers do. Without getting into specifics, I make an ok salary [above the poverty line, but below what most would consider necessary for "middle class".] We live in a pretty expensive area, but with tough budgeting and sacrifices [i.e.: we own one car and one motorcycle, no cable television, dial-up internet, etc...] we live nicely while paying a 10% tithe to our church and saving almost another 10%. We do this being 100% debt free and without any assistance [like food stamps or welfare or whatever]. We consider ourselves very blessed to have figured out how to manage our money and priorities so early in life. With motivation and determination, I'm convinced anyone can.
The few single incomes I know that are still together aren't doing well at all.
Most have already split and only one couple will stick together for any amount of time. So my straw poll result is 12-1.
both spouses should have some outside of home employment experience, so each understands what it takes to get, and to hold a "job". if the stay at home spouse can, or has earned his or her 40 social security "quarters", even better. i believe it's best for one parent to stay home and raise the children, but circumstances can change, and fast. it's never a good idea to have outsiders raising your children.
women have been a strategic resource since WWII. working outside the home has been a part of most of their lives ever since. this should not be to the detriment of motherhood as a career, but it often is.
i've always wanted my own house, and plenty of "toys", but not if i couldn't do it on one income. being dependent on two incomes is a trap. the whole point of survivalism is to be able to continue to live well even with no income.
For all intents and purposes we live on one income. This is how we do it:
1.) we bought the smallest, cheapest house possible (in order to avoid taxes, high heating bills, maintenance, etc.)
2.) we didn't have kids (BIG TIME MONEY SAVER!) The average cost of raising a kid is somewhere around $290,000.
3.) we buy wholesale. Costco rocks!
4.) we vacation off season (cheap rates, no lines, no waiting, NO KIDS)
5.) we avoid using credit cards (if we have a $200 balance on the MC I start to panic and meltdown)
6.) we have one car. That means some days I am stuck at home with no transportation. Oh well, life goes on.
7.) we have a budget and we stick to it
8.) we buy pm's low and sell them high.
9.) we believe in doing it yourself
10.) we buy used goods when appropriate
11.) we don't try to keep up with the Joneses. What's the point?
12.) I make all of our meals by hand. My hubby packs his own lunch.
13.) we buy necessary items off season (buy a bathing suit in December, buy winter socks in July, etc.)
14.) no cell phones, no cable, no Crackberries, no Ipods, etc.
It is possible to be a one income household but your way of life may have to drastically change. We are happy and content because we are nearly debt free yet we still have extra money to do special things like take a weekend trip.We cherish the little things in life while our friends and family live pay check to pay check and are totally stressed out.
"...give up the ski boat, the two new vehicles with loans, assorted other keeping up with the Jones's crap and quite possibly that house you can't really afford..."
I find that TERRIBLY glib.
Do you have children?
Would you want your children to go to a government (free) school?
Want to haul your kids around in a vehicle that does well in the unfortunate event of a crash?
Think it might enrich your kids life to experience new things?
Want a house big enough for your kids not to have to share a room at night?
There are reasons other than some ridiculous ski boat, etc. that a single income can be insufficient for an acceptable situation at home. That is just the cheap way to take a simple-minded outlook on a more complex situation.
It comes down to what you are willing to live without. Many things are luxuries to some and yet, priorities to others.
We have never made much but have managed to never get in debt. What a relief this is when times get tight!
Debt is such a problem among our society. If we cant afford it, we wait and save.
I spent 20 minutes responding to everyone and on the last one my computer died so please forgive me if my responses are shorter than usual.
I love hearing how all of you 'did it' and am happy for you.
6:31, Never said that Dakin was a model for healthy sustainable long term relationships. I used them as an example of a couple living on one income.
Double Tapper, Stole part of yours for a quote of the day.
Dragon, I would be interested in figuring out why that is exactly? While certainly not a big enough sample size to be statistically significant it is interesting.
Irishdutchuncle, Your comment confuses me. What is your position and main point?
John S, Seems I struck a nerve. We will get to that after I reply to your points.
-No
-Mine probably will. However if we wanted different and had a spouse at home teaching them home school style would be a logical option.
-Never said you should drive a death trap. However if you are in a wreck in say an 8 year old Suburban do you think the outcome would be substantially different then the outcome if it was a brand new Suburban with the fancy leather interior, tv's in the headrests and super fancy wheels?
-Some would probably argue that a kid who grew up with a parent in the house all the time had far richer experiences than one who always had the new video game console or went to Hawaii one summer.
-Sure having a bedroom per kid is certainly ideal. However you could have the two kids in an older small 3 bedroom house instead of in a huge 4 bedroom with granite counter tops, a vaulted ceiling and a swimming pool.
Finally lets bring this full circle. There are many reasons a couple would choose to both work, in fact as many as there are to keep one at home. Aside from some relatively quantifiable stuff (don't think anyone would argue that having a stay at home parent hurts kids) I tried to be fairly neutral on the topic. Getting back to the sentence you quoted lets put the whole thing out there "If you say you want to have a parent at home but are not willing to give up the ski boat, the two new vehicles with loans, assorted other keeping up with the Jones's crap and quite possibly that house you can't really afford anyway then you don't really want it!" My point is not that you are bad for having or wanting those things but simply that if you are not willing to give up some of them to put a parent at home then you don't really want one there.
To close it is in fact not complex. Like just about anything when you distill it down it is pretty simple, not easy but simple. If you want something bad enough you make the choices to get it! If you want to loose weight you exercise more and eat less. If you want to bench press 300 pounds you go to the gym and hit the weight pile with a vengeance. If you want to be a better pistol shot go to some classes then practice a lot. If you want a spouse to stay at home you learn to live on one income. Not easy but certainly simple.
Thanks for responding. A few thoughts:
I am a realist. I'm an engineer, not a teacher. I believe the private school where my two daughters attend will do a superior job educating them than I (or my wife) would. Not the case for everybody, but I believe it is for us. It is of the utmost importance to us that they receive the best education possible, so this is an economic 'sacrifice' we are willing to make.
Following your example - 2001 Suburban crash test results are 4 stars for frontal and 0 stars for side impact (which is surprising to me, and to be taken with a grain of salt since I spent just a minute to google it). 2009 Suburban crash test results are 5 stars for frontal and 5 stars for side impact. This is a nit-picky example, but it serve to prove a point. If the difference is minor injury vs lethal accident, I believe it is worth a few bucks to ensure your family's safety as best you can. Another 'sacrifice' we are willing to make.
I will not disagree with your point about having a rich experience with a stay at home parent. I will, however, point out that a quality day care or school environment offer benefits as well. Interaction with other children helps with social development.
I agree completely with your comment on the house. Things such as granite counters are simply conspicuous consumption - plain and simple.
Your post was, in fairness, pretty neutral, and I commend you on that.
sorry, you know how i get... i'll try again.
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having your life depend on two incomes is a trap. (main point)
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women should have work experience outside the home even if they will be stay at home moms.
women are in the main workforce to stay. (even if the extra labor they supply lowers wages for traditional family "breadwinners") (many of the traditional jobs are gone anyway)
girls need to know how money "happens" instead of being raised to be "princesses".(can't sit around the house all day eating bon-bons)
there are too many breakups over money.
a pension of ones own is better than just a survivor annuity.
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