My family is living proof that living on one income can work. For the past 15 years, we have been a one-income family (think five-figure salary), while still managing to pay off thousands in debt and become financially secure.
Though it hasn’t always been rainbows and roses, we are happy with the decision to have a stay-at-home parent. The stress of both parents working, plus the fact that childcare costs are so high, made the decision an easy one.
At the time, our student loan debt totaled $40,000 and we had consumer loans on two cars. In fact, the estimated total debt we paid on car loans over the years is $85,000!
Eventually, we paid off all student and consumer loans, built emergency savings, secured a will and life insurance, and have grown our retirement savings to a point that early retirement is likely.
How did we do it?
At times, our budget constraints demanded frugality just to get basic needs met. This prompted me to read every personal finance book I could get my hands on. I took the information I learned and applied it, enabling us to get by on one salary. Along the way, I also learned about insurance, estate planning and wills, emergency savings and college and retirement investing.
Actually having a conversation with your partner when you have small children around is easier said than done. But we believe it’s important to find time to talk to each other, about finances and about how each of us are feeling about our particular roles. We still have our best conversations after the kids are in bed. :)
Inevitably, there were times when we found ourselves resentful of the other, but comparing or competing over who has it easier or better is counter-productive. We recognize each partner has hard and stressful days, as well as easier, more relaxed days.
In the beginning, we had to reduce our expenses to make sure we were buying only the necessities, just so we could pay the bills every month. Being frugal by cooking meals, packing lunches, shopping the weekly grocery ads, buying used clothing from consignment or thrift stores and finding low-cost/free entertainment saved us a ton of money.
We were (and still are) constantly selling things we didn’t need on Craigslist and eBay. We would flip items found at yard sales and thrift stores. Though it doesn’t bring in a ton of money, every little bit helps.
When we paid off our debt, we did so slowly, enabling us to still enjoy the things we love. Appreciating what we have and finding pleasure in the simple things has been crucial. After a couple of years on one income, we made room in the budget for our love of camping and travel (staycations and local trips at first).
No keeping up with the Joneses
Everything is not always as it seems – I remind myself the Joneses may be broke and living paycheck to paycheck. We strive to live life in accordance with our own values, not someone else’s.
My advice to families who dream of living on one income?
Where there’s a will, there’s a way!
Families need to take the time to plan out how the finances are going to work, but also how each parent feels about the differences in their roles. Discuss fears and concerns along with logistics, such as schedules and money. If you disagree, keep talking, come up with a win-win solution and make certain you and your partner are on the same page.
What about you? Is your family living on one income? If so, how have you managed to save money and pay off debt?
Amanda and her family paid off $100,000 in debt on one income, while still doing the things they love. Amanda blogs about money, debt, savings and personal growth at CentsiblyRich.com.