Wednesday, October 16, 2013

Living on One Income

I don't plan on quitting my job but what if? Could we make it?

Y's Income: $2800 (its not quite this high now but I'm assuming we wouldn't be flexing $5000 annually if I wasn't able to work)

Expenses:
$950 mortgage
$350 Irregular expenses including property taxes and all insurance
$85 preschool
$163 phone
$160 electricity
$71 DirectTV
Total $1779

This would leave $1021 monthly for gas, groceries, savings, and all miscellaneous spending. I think we could do it but it would be tight. Our income taxes would go down substantially so that might increase our income a bit. If you notice that this budget doesn't include either the tractor or car payments. Those would need to be paid.

This would be doable but not for an extended period of time.

14 comments:

  1. We were a one income family for a while, until Hubby lost a job. My husband made a little less and we didn't have Direct TV but the rest of the expenses were fairly similar to yours (no car payments though). It was REALLY tough (especially with two kids) but it's definitely doable!

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    1. Lena, if we were to do this, DirectTV would probably go as well as our smart phones.

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  2. Your budget looks similar to mine, expect I don't have DirectTV and there are some other small differences. It seems a bit tight for a small family such as yours to live on Y's income alone. Too bad real salaries haven't kept up with the cost of living over time. In our parent's generation a one income household with children would be expected to get by quite comfortably, and still have savings left over. But that's hardly the case today, unless you're part of the top quintile of income earners in the U.S. who's salaries have increased faster than inflation. I've heard of farmers leasing their tractors and combines to neighbors for side income. Not sure if that's possible in your area.

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    1. The farmers would probably laugh at our little 50hp tractor. They all have brand new tractors that cost more than our house. It actually seems like Y's pay has kept pace with inflation for us. He started our as an apprentice plumber 7 years ago for $10.50 per hour so he's had a significant increase in income. It would still be tight to live on his income alone but doable.

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  3. There are two sides: The first is all the other expenses you incur BECAUSE you work. For instance, commuting costs, childcare, clothing upkeep, and things like are you spending your net income to buy convenience food because you don't have time or energy to cook after work?

    The second side is to consider the loss of potential earning power over time due to you leaving the workforce for a length of time. This one is a more nebulous figure,obviously.

    In either case, living below our means, using savings, versus income, as the primary method of amassing wealth, be it two incomes or one, is always a good idea. That you are running the numbers for one income is wiise. We should all "mock up "" our finances periodically like this to account for "what ifs." Then again, I find it an odd sort of fun to run the household on half pay at times, just to see if anyone notices. (They don't., but came close when we cancelled our second Dish Network!)

    Thank you for a great post!

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    1. Meg, I don't plan to leave the work force but it never hurts to look at the budget just in case.

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  4. This is something the hubby and I have to put some thought into as well. We got too used to have too much disposable income and having kids will be a huge shift but one we're looking forward too. When that time comes, I will be doing the same kind of budget analysis as you did above, it'll be interesting to see what we come up with. Good luck!

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    1. We are very used to having a sizable disposable income and it will be hard paying so much for daycare going forward.

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  5. No matter what situation you are in, it's always a good idea to do a living on 1 income budget now and then. It can help you plan to have kids if you both work and want to stay home at they come but it can also help you keep your expenses low by revisiting this exercise and seeing what you are spending on a monthly basis(and it helps identify those wants you could do without if you had to due to a pay decrease).

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    1. It has always been our goal to be able to live on one income. The higher house payment we have now does make it more difficult.

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  6. Yes the living on one income. I would love to live on my husband's $1800.00 take home, but I refuse to live in a broken down trailer in %$#^ Idaho:) Tee Hee. When is that baby coming? I know you have not heard that question for the past 5 minutes.

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    1. November 15th is my due date. I'm getting very large and very excited. I am eager to meet the little tyke inside me while also treasuring all the little kicks.

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  7. What Meg said is so true about losing potential earning power. I had a great job when I had my first baby. I tried to go part time but their idea of part time & mine were very different. So I quit. I did work part time jobs over the next 11 years plus we had another baby .... but when I was ready to go back to a "real" job it was tough. In almost 2 years, the only interview I could get was the one that eventually led to my current position. No one would even talk to me because of that big gap in my resume, even though I DID work. But it was worth it to stay home & raise my babies :)

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  8. It is hard, but it can be done. We went for years on only my husbands income... even now my "side hustle" income is only "bonus money", which I try to put most into our savings. Without my income we have around $1200/month for *everything* for a family of 6, and we get by. There's not a LOT left, but we are always provided for. :)

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