Feasibility of one-income living.

In My Humble Opinion
21

We are going to give it a shot, although not especially voluntarily. I’ve been working as a courier for the past four years but because of a back injury and the cost of gasoline, I’ve had to give it up. We believe we can do it and the only real sacrifice will be a small reduction in the amount of money we set aside for retirement.

We’re fortunate in that my Darling Marcie works for the federal government and has great medical insurance; plus, her daily commute is less than five miles round trip.

22

Well, the average American HOUSEHOLD income is about a third of what I make so clearly there are a lot of people who could afford one income living. They most likely don’t want to live a $45000 a year lifestyle though.

23

I’m sure that it’s quite possible to raise a happy healthy family of five on one income. I’m just saying, specifically, that it’s no longer possible for most families to pay a mortgage on a detached house, and pay payments on a new car, and pay for the occasional holiday, etc, on one close-to-median income. Even if you subtract the things we now have that the 1950’s/1960’s generation didn’t, like cell phones and internet.

Can the family rent? Yes. Not own a car? Yes. Do it with two incomes? Of course. Be paid a lot more? Certainly, of they’re lucky. But the high-paying manufacturing jobs that brought the suburban dream to millions of North Americans are a lot rarer than they used to be. And even the blue-collar positions–bus drivers, for example–don’t make as much comparatively as they used to.

24

This is basically what it comes down to for us. Yes, we could scrape by on one of our incomes for a short period of time if we had to. But we both funded a huge portion of our bachelor degrees via ten year student loans. And used credit cards to cover books and a portion of our living expenses. Then, after we graduated, we had to spring for a car (used, and he drove me to work for a couple of years so that we wouldn’t need a second). It cost cash we didn’t have to put rent and security down for a tiny one bedroom apartment, and furnish it and buy work clothes. And after all that, we still didn’t start out making quite enough to cover groceries and utilities and rent and also pay off our credit card debit.

I won’t deny that we now have a number of toys that we don’t actually need, cars that were bought new, a house (though it’s modest and cheap for Northern New Jersey), and eat out too often. But we’re basically using one income to live on, and one to pay down debt that was largely collected during college and our first few years living in the real world. I’m not ashamed of that - it was an investment in our future together.

We’re roughly six months from killing off all of the student loans and one car payment, and about $30,000 away from killing off the credit card debt, and $3000 from paying off the 401(k) loan that gave us the downpayment on our house. Once all of that is gone, we can revisit how much money we really need in order to survive.

25

We live on one income, and support a total of five kids – including college tuition for one. I do freelance, but that isn’t factored into our household budget; it’s just extra money for little luxuries like ordering pizza, or for big, rare purchases like a new sofa, or a new rug for the living room. I worked full-time for a while, but after paying for two little ones in daycare, I only cleared about $600 per month; then I got pregnant again, so it made no sense for me to keep that job.

I’m a frugal cook, so I stretch our food budget by making most meals from scratch. Yet I don’t even bother clipping coupons, and we’re not especially careful about what we spend on food. We don’t eat out a lot, but who would want to with three little kids? We don’t buy new cars, only used ones, and maintain them fanatically so they last a long time. I don’t shop, and I don’t care about clothes or fashion, and my little kids are all boys, close in age, so lots of hand-me-downs for the boys’ play clothes.

We do have digital cable and internet and phone, because our home is the base of my husband’s business and that internet and phone are necessary. The cable and our HDTV is our entertainment, as we don’t go out to movies.

It’s not nearly as difficult as I expected, but we started out dirt poor, so by comparison, our current lifestyle is quite comfortable.

26

Have you ever wondered WHY you can’t afford a house? If housing is “unaffordable”, who do you think is buying it? Someone has to be buying it for the price to be that high.

There are three possible reasons:

  1. You suck and make a lot less money than everyone else in the neighbourhood, so everyone else can afford to pay more than you. (i.e. market “fundamentals” support the asset valuation).

  2. Some kind of cultural shift has happened where people now value have giant houses more than having money in their pocket, and thus EVERYONE except you are/is now willing to pay a higher percentage of their income into housing.

or

  1. You’re at or near the top of a speculative asset bubble driven by cheap credit and leverage.

I’m fairly confident about which one it is.

27

New car? My father never owned a new car when I was growing up. He bought extremely inexpensive used cars for over 30 years. Why are payments on a new car part of the criteria?

28

The Boston area is very expense obviously. I have a wife and two daughters. If we dropped down to 1 income, that could mean that we would drop down below the $100K income mark and I just don’t think that is feasible at all. If we moved closer to the city, dropped down to one car, and moved into a trash house, in a trash neighborhood, and sent our kids to inner city schools, we could pull it off but just barely.

You may be wondering how people that don’t make 100K do it. I wonder that too. It makes no sense. A responsible mortgage would be 2.5 time household income in most parts of the country. 3x income is pretty aggressive. Single bedroom apartments in the college areas of Boston sell for more than that. It sucks for one provider to make over twice the average U.S. income and live like the Honeymooners. The best strategy would be for us to pick up our shit and run which could work because I could telecommute from anywhere in the U.S. if I negotiated.

I have said it for years. I have no idea whatsoever how people are pulling off what they are trying to do here. The huge mortgage and foreclosure upswing proves that many didn’t. I bet their bank and credit card statements would send me into seizures. I can’t live that way.

29

I number of people have said it here before but lots of people have complained that the 1950’s were affordable and things aren’t now. If you bought a ranch house at just over 1000 square feet (the average in the 1950’s) and modeled everything else very similar to how it was then, almost anyone could afford it. Even with the same money, many things would be way cheaper like electronics and appliances. Food would be better among countless other things. If you pine for the 1950’s, all you have to do is do it.

30

A single income household can be done, but it is all about choices. We all make choices in our lives, go to work, or go to college. Have no kids, or have one or five. Rent or buy, etc.

Some folks obviously have chosen to have one parent stay at home, and I can understand that. If the second working spouse is basically working to cover the cost of daycare this is an obvious choice. But there are also times when this choice is NOT the right choice–I think couples need to reassess this all the time and make adjustments as needed based on the bigger picture.

Some folks choose a bigger house and toys over staying at home with their kids. Again this can be a very logical choice if that large house is important to their long term goals. But if they are struggling financially that really makes no sense to me.

For my wife and I, our choices differ from anyone who has posted here. Both my wife and I are college graduates, including graduate school. So obviously we both place a very high value on education. We both also come from poor to modest backgrounds–very blue collar background, whereas our current positions are very white collar and are both very high paying. But our lifestyle is very modest for our income. I know many people like the OP’s lawyer friends who just increase their lifestyle to match their income. That is one option, but isn’t the choice we made.

We live in a very modest home, drive fairly modest vehicles, modest to pretty damn good vacations, eat well, work out on a regular basis–we have a good life and feel pretty damn lucky overall. But our life didn’t just happen to us–we made choices along the way and capitalized on those choices.

We have put away so far 3.5 years of our daughters college education, and we both plan on retiring by age 55 (we are both 48 now). But we put away in our retirement fund what most people live off each year–we each put away the maximum 401k, we get our employer match, we both max out our Roth IRAs, I also get profit sharing from my work, etc. We also have set up a retirement fund for our daughter–that frankly is the best gift I can see giving my daughter—setting up her future financial security.

We have chosen to both work because our daughter is 13 now and is an excellent student, great social skills and we see no drawbacks to both of us working. Our goals are to cover her educational needs (state college by the way–it was good enough for us and I see no reason to waste money on a Harvard education!), and retire and enjoy our lives. Our choice is our future. My wife or I staying home now would truly have no tangible effect on our daughter that I can truthfully see although obviously YMMV.

I have a coworker who I have known for 20+ years. He works, she doesn’t. They have two children (13 and 16) a bit older then my daughter. They struggle paycheck to paycheck, have very limited retirements, no savings for their children for college, etc. But they (actually she) has chosen to NOT go back to work. This is a woman capable of bringing $75-100k into their household and their future.

To my viewpoint–the wrong choice. But one that works I guess for their lives, but one that I do not see working for what I want out of my life.

31

And that is a completely valid and acceptable choice (truly). But it kind of highlights why people say shit like “oh, we couldn’t afford it”-because it’s rather impolitic-to-downright-bitchy to tell someone, “well, we’d rather Snodgrass beat all the rest of your children to a bloody academic pulp before embarking on an Ivy-strewn path to become the head of Citigroup. And if that means my wife and I both work and we save up thousands of dollars to have him go help some third world people suffering from serious but non-infectious diseases at cost-to-us charity, damn it, that’s what we’ll do.” I mean, it’s kind of demeaning and tramples on the values and feelings of others and the plans they have for their kids, right?

Which is exactly why people say stuff like “we can’t afford it” all self-deprecating-like instead of unloading financial and life purpose TMI on all and sundry. Personally, I rather like these types of lies. They function as social lubrication.

Incidentally, my personal situation was that my mom was a SAHM (miserable) till I was 12, my parents both worked till I was 14, and my father has been a WAHD since about the age of 14. So I’ve been on all 3 sides of this. My mother was a horrible stay at home parent, my dad was pretty good (though he does have a job). But their desire to both have jobs has a lot to do with the points I highlighted and if you could see the way they live you would not assume that they were working to squander their money on toys. My sister and I have to push them to splurge a little on themselves.

32

shrug I’m just as convinced that their goals aren’t for me, as they are convinced that my goals are not for them. It’s all pretty equal IMO. I don’t feel insulted by people who think that Yale is the only acceptable college for their child.

I can’t hide my particular lifestyle choice under a social lie–the minute I confess that we homeschool our kids, people get defensive, as if by simply living our lives we’re judging them to be inferior parents. Actually I don’t care if they homeschool or not–it’s certainly not exactly something everyone wants to do. So I like to assume that other people care as little about my choices as I do about theirs. I’m probably wrong, mother-bashing being the American sport that it is, but at least I’m happy.

My mom stayed home for about 20 years (5 kids, 14 year spread) and was quite good at it. Now she is more in demand at work than she really wants to deal with. I certainly plan to go back to work full-time someday, but right now I’m in a different chapter.

I enjoy being home a lot–actually I don’t quite see how we could handle both of us working full-time and running our lives and relaxing every so often. From my perspective, dual-income families don’t seem to have much downtime when they can just enjoy each other. I think it would exhaust me. When does a working mom get to have a personal interest? I know many women do it very well, but I’m not really cut out for it.

33

I still think housing costs and inflation are a biggie. My parents bought a house in 1973 that cost less than the new Chevy Celebrity station wagon they bought in 1986. Granted, it was a pretty small house, but they sold it in 1990 for almost four times what they paid for it.

My father worked construction, and therefore was often on unemployment. Mom told me recently that they could pay their mortgage (a 15-year mortgage at that!) with Dad’s unemployment check. I doubt my husband and I could pay our mortgage with an unemployment check.

My husband and I lived on one income when our daughter was small–from 1997-2003. We only had one car, we rented for most of that time, lots of scrimping and saving, etc. I look at grocery prices and gas prices lately and wonder if I could do it today. It’s not just convenience foods that are expensive–basic stuff has gone up quite a bit. And, of course, very little travel or other luxuries in that time. What’s unfortunate is that now that I am working, I don’t have time to do those things I wanted to do but didn’t have the money for when I was not working. I feel I’m in a catch-22, and in some ways, poorer than I was back then.

34

I haven’t seen any morality tales here. The question was whether living on one income was impossible or not. The answer seems to be that it is possible, but requires some sacrifices.

Maybe true when you retire, but today a million will do nicely. We’re close enough to have run these numbers. Social Security, while not enough to live on by itself, is a bigger chunk of retirement than you might think. Another thing that has been mentioned, and we’ve seen it with our parents, is that once you get old enough you stop spending money.

One through and paid for (expensive private school) one almost through a state school, not our state. We both had our undergraduate educations paid for, and so certainly were going to pay for our kids.

Did that too. We were lucky that we bought in California near the bottom. I know about price inflation. The very nice, small house in a good neighborhood we bought in Louisiana in 1979 was $40K.

I agree about the importance of 2 and 3. But there are other things more likely to help a kid get into college than internships - like grades, at least one parent who isn’t exhausted at the end of the day, and all sorts of enrichment, available for free or for litle money. Either choice is perfectly valid, but there often is a choice. And it isn’t sheets - what I see around here are people moaning about not being able to afford to send their kids to good colleges while seated at their new Lexus.

35

Just FYI: I had students this year get rejected by Stanford and accepted by Columbia, Penn, and Harvard. Also, Harvard (and I believe all the Ivy’s are in about this range) gives some aid to anyone with a household income under $160,000/year. Households under $50,000/year (that number may be off a little) have tuition, room and board 100% covered with grants, not loans.

This is totally off topic, but there are a lot of misunderstandings out there about various schools. Yes, top colleges are insanely expensive, nit no one pays sticker price. And the admissions game is a lot more complicated than just being able to go fight ebola.

36

If a friend bought a Ferrari, I might say something like “wow, great car. Too bad I can’t afford it.” Which might not be strictly true - I mean, I could use the equity in my home, cash out my investments, and eat beans for a year if it meant enough to me - but I’m not willing to make that many sacrifices to have that Ferrari. But it’s weird to say “wow, great car. Too bad my priorities are such that my desire for financial security (or a certain standard of living) outweigh my desire to buy one.”

So I wouldn’t look too much into an offhand “oh, we can’t afford it.” Like anu-la1979 said, that sort of response is social lubrication. Especially when you consider the possible honest reasons:

  • we want to be financially secure
  • we don’t want our child to lack for material things or experiences*
  • our careers are too important to us

have an implied criticism to them (you aren’t financially secure/your child is lacking in things and experiences/your career isn’t important to you).

If you have someone in your life who keeps moaning about how they wish they could afford to stay at home, while buying new cars every few years and basking in the glow of the giant HDTV they had installed in their top of the range kitchen that they never use because they always eat out, then yeah, give them a smack on the head. But otherwise I’d just assume “we can’t afford it” is short for “we can’t afford it and maintain the standard of living we think is best for our family.”

  • This isn’t necessarily about making sure some spoiled kid has all the latest consoles. Possibly they prioritise things like being able to go skiing as a family every year, or being able to send their kid to France for a month with their French class, or buying a good cello and hiring great instructor for their musical prodigy.
37

I make less than $100K, but considerably more than the median for the area, and I’m often baffled as well. I have one kid and rent a fairly nice apartment in a decent but certainly not fabulous neighborhood outside the city. We do okay, but I won’t pretend there aren’t times when my bank statements send me into seizures. I cannot for the life of me understand how people maintain a house and three kids on less than I make.

That said, if I married Daddy Warbucks tomorrow, I still wouldn’t consider not working. Not because I’m in love with my job, or because I need more toys, but because, quite simply, whoever makes the money is the boss of everyone, and I’m not inclined to give up that amount of control over my choices.

38

My mom didn’t work out of the home for most of my childhood, she worked on and off once we were old enough to be home alone after school. We were pretty solidly middle class, my dad worked in an ad agency and we even had a modest vacation home ( my dad got the land in some sort of work barter deal and built the place on the cheap).

My mother planned every menu for the week before she went grocery shopping and bought only what she needed. No impulse buys. Fast food and “TV dinners” were treats for the kids on the nights (maybe once a month) when the grown-ups went out. We went out to restaurants only once or twice a year. If money was tight, the dinner recipes “stretched” a small amount of meat and Mom would stretch the real milk with powdered stuff. We each got a small clothing allowance for store-bought clothes but Mom made most of our clothes from scratch — it wasn’t as horrible as it sounds, she was a good seamstress and let us pick out the fabric and patterns.
Every item was budgeted for and the household budgets were adhered to.
My mother and her peers studied"home economics" in college and it was a real thing, their work at home added real value to the family lifestyle.

39

Damn, that Mr. Moto and I are like twins separated at birth.

Another guy with 3 kids, a house (paid for), 2 cars (paid for) living off 1 income. (Full disclosure, wife works part-time, mainly to keep her resume up as a lawyer, and as something intellectual to do. Has never been about the money. Since kids she has never made more than 5-7% of my income. Also, when she quit fulltime work, she was making approx 20% more than I.)

A year from now I’ll have 3 kids in college. Again, can be done. Quite easily, if you care to. And we’re in no hurry for my wife to get a job, even when the kids are all gone.

Sure you can do it - but you may not be able to buy everything you want. Personally, I think there should be a law prohibiting anyone with a TV larger than - say - 50", or a car getting less than 25 MPG, from complaining about the economy! :smiley:

When I was younger and started a family earlier than most of my friends, most of them were living in bigger homes, owned more nice stuff, and travelled to more exotic locations than we did. Would have been silly for me to begrudge them their choices based on our having made different choices.

40

OK, thanks–I haven’t given it much thought yet, given that my oldest kid isn’t 8 yet. We’ll do the research in a few years.

I just don’t like the way I see teenage kids I know working themselves to death–between maintaining perfect grades, carrying 4 extracurriculars, playing at least one sport, etc.–in order to get into the so-called perfect college without even considering anything but the name. By the time they get there, they’ll be too burnt out to enjoy it. And all this is for an undergrad degree? I refuse to encourage my girls to kill themselves for an Ivy school; it’s just not that important. Having time to think–that’s important.

I tend to think about Stanford because it recruits homeschooled kids, as well as being close (and our arch-rival). But realistically–BYU or a UC is just fine with me, and by the time our kids hit college age, who knows what the recruiting at any college will look like? Maybe Cal will have come to its senses by then and we can have a 4th generation attend there. :stuck_out_tongue: