Thursday, April 15, 2010

Two incomes down to one

I've had some emails recently from Mom's asking how on earth to go from two incomes down to one. I'm no expert on this. I can only share that it has worked for our family. And going from two incomes to one was not planned, but just sort of fell into our laps.

I am a college graduate and worked full time in my chosen profession up until October of my first pregnancy. It was very soon after the 9/11 tragedy and the company I was working for at the time was having to undergo a huge change. My boss didn't want to upset me at that stage of my pregnancy so called my husband and asked him to "let me go". Quite odd being "fired" by your own husband. I freaking out. But Bryon assured me that we would be okay. I was scared to death, but you know what..... we were okay. It's amazing how well you can buckle down when you just have to buck up and do it. We had no money in savings as a cushion. My losing my job has ended up being one of the greatest blessings.  Once I held my first daughter there was no way I could imagine leaving her even if it was only 4 days per week with my husband.
At that time of my losing my job, we had just downsized to a smaller apartment with a smaller rent, with the goal of saving for our first home, so thankfully less money going toward rent was already in place. Next thing we did was to sell my mustang a few months down the line, as it was not very user friendly for a growing family and we didn't want that $330 car payment. Since we didn't need two cars as I didn't need a vehicle to get to and from work, we went to one vehicle for a while. Of course we had to tighten our belts. Christmas we had a Charlie Brown Christmas Tree and simple gifts. But we had our first baby, we were happy and I was able to be home with our baby full time, that was a great gift to our newly growing family for sure.

After a short time we moved to a new construction condo that we were able to purchase for very little money out of pocket, which was one of the main motivators for us in that move. I'm sure not the way Dave Ramsey would have told us to go into it, if we had been following Dave Ramsey back then that is, but we needed to be out of the small apartment and wanted to own for tax reasons. It was a good move for our family. We were very happy there. A chance purchase on a large single family home came up and we opted to pursue that and sell our condo. Since the condo we have moved twice. Once to our first single family home and then again to our present home.

As of a few weeks ago, we have no debt now except for our mortgage, thanks to reading Dave Ramsey's total money make over and putting his steps into practice. Folks we read about in his book and on his website were truly inspiring. Folks with a lot less income and a lot more debt than us becoming debt free, it was a great motivator.
We are also able to:
-Have money in the bank for emergencies. A cushion we had not had before.
-We save for things we want.
- Vacations are not crazy ones, simple but yet fun and we fund those from a small portion of our tax return and earmark that money aside just for vacation.
- Out of paychecks we set aside money for gifts for birthdays and holidays, and try to keep the focus for our kids on the meaning of holidays and the times spent as a family verses a focus on how many gifts under the tree.
-We do not have car payments. We do have two vehicles. One which is better on gas to travel back and fourth for my husband to and from work, the other a family vehicle that holds us all.
-We grocery shop with a set food budget, presently it's $300 bi-weekly. Though I might bump this up to $350 since food prices seem to be on the rise a bit. I make homemade desserts and treats on the weekend, none on the week days unless they are left over from the weekend.
-We use Dave Ramsey's zero based budget system (meaning each paycheck that comes in we assign each penny to something).
-We also use his envelope system for some of our monthly expenses. I don't use actual envelopes because things like getting gas here are much easier on a debit card. So we use large size index cards on a book ring, each card has a title for what it is, Gift fund, groceries, Bry's work money, gas money, etc. I keep a tally on the card with the date of how much is there in the bank for each. I know Dave Ramsey prefers cash but this is working for us so I'm not fixing what isn't broken.
-We set aside money for clothing, and when we need to shop, it's there.
-We have money set aside for retirement and continue to contribute to that.
-We have health benefits, life insurance, etc... already in place.
-We do have satellite TV, though a bare bones package and prefer to use Netflix which is super cheap and fantastic, we can watch many things instantly through our xbox 360 or Wii or computers. We do have our cell phones but use those for long distance as well so that covers the price we'd pay for home phone long distance fees.
We could cut the cell phones, TV and netflix but we are doing okay so keeping them is in our budget. But we'd cut all that if I had to without blinking an eye if any of that was keeping me from being home with the kids. We'd also downsize our home/mortgage if it meant being able to have me home with the kids.
-We also live on 8% less income less than my husband's actual paycheck. So the actual income that comes in for now goes to our emergency fund, next it will go to our mortgage. He will lose the 8% in June so we will already be well adjusted living on this lesser amount. It feels much better and we feel more secure knowing that we can live without that money when the time comes.
-I make everything from scratch. We use organic milk, fresh produce, not huge on buying red meat, don't really use much in the way of canned food items. I use cloth diapers which do save tons of money. Though I'll admit to doing both those more for health reasons verses money saving benefits.
-We also use all eco friendly personal care products which are funded in our budget. Cost is the same as other products.
-I make our laundry detergent which is fun and easy and make homemade cleaners (these things are fun for me, better for health and also do save us money).
-We use cloth cleaning wipes and cloth napkins so paper towel use is minimal and we don't buy paper napkins or paper plates.
-The kids each use colored coded Kleen Kanteen stainless steel water bottles verses using glasses or paper cups. This has cut down so much on how many glasses are in the dishwasher, now it's far fewer than before and the kids do tend to drink more. I really only give the kids water or milk (milk non in the kanteen). We don't really do soda's or juices except once in awhile.

I think that's about how it works for us. It's always a work in progress. I am always seeing where I can trim money and be able to use it for another cause. It has become a bit of a fun challenge.

I hope that anyone who truly wishes to be at home full time, can make that dream a reality for them.

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