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Saturday, April 12, 2014

Living on One Income, Part Three

I assume, if you are reading this, that I did not totally piss you off in Part Two.  I'm a little afraid it might have come across as preachy, but from what I've experienced over the years, it is what a lot of people need to hear.  Because if they can't take a little straight talk about how this whole marriage, family, and living on one income thing has to work, then for the sake of their marriage, and their family, they probably shouldn't even try it.

In reality, what you are doing when you quit your job to stay home, is going back to traditional roles: the man works, the wife stays home and does the cooking, cleaning, and child rearing.  That is a tough thing for today's woman to swallow.  And the ones who swallow it willingly are guaranteed to get negative feedback from the women around them.  You are setting back the whole female race!  You are defying the feminist movement!  Yadda yadda yadda.  Truthfully, there will be a whole lot of jealous women in the ones who spout that rhetoric at you.

Guys who stay home, I can only imagine the crap you get from other men. I'm guessing more than a few jibes about your lack of machismo by having your wife be the breadwinner.  I suspect, as with the negative women who make rude comments to hide their jealousy, a lot of smack talking men secretly wish they too could stay home all day and have a wife who toiled at the office for the family's money.

When you decide that one spouse should stay home, you both need to really be open to ways to save money.  The less money that goes out, the more that needs to come in in the first place, and the more likely it is that you can be a married, one income family.  That means gathering as many money saving ideas as you can and implementing all that apply to you.  This is not a one-time thing, but should become an on-going habit, as some tips might not be possible now (or just be inapplicable to your current life), but be very helpful in the future.

I am always on the look out for tips that I can put to use in my family's dollar stretching lifestyle. I read a new book this past winter that was about cutting expenses from your budget.  The title of the book looked somewhat promising; the gist of it was that the author looked for ways to cut his family's costs, and came up with, over the course of a year (I think), a savings of $1000 per month.  Which is a huge amount of money for me, and, I think, for most people.  Unfortunately, I came away from the book with no new ideas, having adopted all of them little by little in years past, and shaking my head over how much money the author had previously been unwittingly hemorrhaging. I also came away with a niggling feeling that most Americans, while probably not quite as well off as the author-- and thus probably not going to find $1000 a month to cut from their budgets (unless you are totally erasing the need for childcare on multiple children!)--are also unknowingly spending a whole lot more money than they should or want to.

Basically, you have to start with the big things. Like housing.  Look at how much you are paying for where you live, be it an apartment, a house you rent, or a house you own.  If you rent, is it possible for you to move somewhere cheaper but just as sufficient.  I'm not saying give up safety, but quite often I see people, especially young people, renting places that look eerily on par with the nice houses their parents live in.  What they are missing is the fact that it took years upon years for their parents to work up to places like that.  Too many people skip the 'starter home' and go right for the middle aged owner type of house.  The one with the nice carpeting and trendy color scheme, and manicured lawn in a suburban neighborhood.  Not the "I'm a poor twenty-something figuring out how this whole life on my own thing works" type of dwelling they can actually afford.

This downsizing concept isn't just for renters or young couples who started out a little higher on the housing niceness scale than they should have. If you own your own home, and the house payment is really squeezing blood out of your budget, could you get by with a smaller or less new home? Might you be able to sell your current home fairly quickly without taking a loss on it? Even if you don't want to change school districts, it might be possible to buy a less expensive home and save a whole lot of money each month in mortgage payments.  It is often worth taking the time to check into.

If you are renting, and plan to live in that area for a long time, have you ever looked into prices of starter homes?  When DH and I bought our first house, the mortgage was actually $100 a month cheaper than what we'd been paying in rent. That $100 a month covered the property taxes easily, with money to spare for house insurance. Sure, the house was a little smaller, but it also was quite a bit newer, and cheaper to heat in the winter time than the old house we'd been renting. Plus, by being owners instead of renters, now we were earning equity (which we used, six years in the future, to make a down payment on this little place here) instead of just having this budgetary black hole in the housing expense category.

If you own your home, and don't want to sell it to downsize to a different home,  what are the terms of your mortgage?  What are the current interest rates for mortgages?  Could you possibly refinance for a lower rate, thus lowering your payment and saving you money either now in a lower payment each month or in the long run by not having to pay as much in interest over the life of the loan?  Several years ago DH and I did refinance our house at this little place here, even though we'd only held the mortgage on it for slightly more than a handful of years.  On the original mortgage we had 24 years to go before it was scheduled to be paid off.  With our refi, we rolled that 24 yrs into a 15-year mortgage for 2.75% less interest and the same monthly payment. It didn't save us any money up front, on a month by month basis because our payment stayed the same (well, actually I think it fell by $40, but we have continued to make the same payment as the original mortgage, with the extra $40 each month paying off the principle a little faster). In the long run, we are saving ourselves a boatload in interest.  And we can pinpoint a retirement date for DH a whole lot sooner: 9 years sooner, if we keep our finances on track to have him retire once the house is paid off.

One spouse at home, and the other one looking at a retirement date earlier than the day they can start drawing Social Security?  Sounds like it might be worth making a few adjustments for.  Maybe not having the magazine spread dream home isn't such a bad thing. . .

To Be Continued. . . 

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