Living With Less

How to become a one-income family

Continued from page 2

[Related content: income, debt, savings, financial planning, Donna Freedman]

Step 5: Communicate -- and perhaps reconfigure

This isn't the last step, but rather a continuation of Step 1. It's essential to keep talking about what's going on, both financially and emotionally.

"People assume their partners have the same dreams, or at least expectations. But they seldom do," says Herigstad.

Sometimes those assumptions are internalized. Matt Tardy says that, early on, Jaime sometimes felt bad about being a full-time mom instead of wage-earning one. "I had to say, 'Whoa! That's not why we're doing what we're doing.' It's just hard for the other person to feel like they're contributing if they're not contributing financially."

Personal finance author Kay advises having a weekly money talk -- and to talk about finances only then. If a disagreement comes up, "shelve it until Money Night," Kay says. And if you're either planning to downsize or facing job loss, start your Money Nights now.

How are our two couples doing?

Jaime and Matt currently make between $70,000 and $80,000 a year. They pay extra on the mortgage, fund their own retirements, have zero debt and try to put at least $1,000 a year into college funds for their two kids (daughter Jet was born in May 2009). Recently they paid cash for a used vehicle. They no longer use credit cards.

Spicer and Carolina still have about $1 million in business-related debt. Carolina finished her master's degree in early childhood education in May 2010 but hasn't been able to get a job; she has been substitute-teaching fairly often, though. Spicer works seven days a week, for SkyLedger and as a computer consultant. Between them, they earn about $75,000 per year. Spicer is putting $200 a month into a Roth IRA, but they haven't started one for Carolina yet, having hoped she'd get a teaching job with a decent retirement plan. Financial turmoil has kept them from starting a family.

Sometimes the downsized life is temporary. You live simply while you find a new job, raise kids or make a success of your new business. But once those things happen, some decide they like a simpler lifestyle.

"Yes, we're on a tight budget, but we're making a little bit more every year and that's exciting," Jaime says, "because you can save."

"If you can have a more enjoyable tomorrow because of a little pain today, I'm OK with that."

Save money today

Fee free: The "Do One Thing" series at Bundle wants to save you money. "Never pay another late fee" shows both paper people and e-payers how to organize.

Avoiding temptation: Have a spending problem? "Don't put yourself in these situations" offers a very basic (and funny!) piece of advice.

Cut food costs: A reader at the Women in Red message board has a goal called "Groceries on $15 a week." Check out the readers' suggestions for ways to reduce your own food bills.

Published Nov. 23, 2010

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15Comments

Best

12/01/2010 3:01 PM

This article is not helpful at all. Their "cut back" life and income is what my husband and i make combined a year, both working full-time.

Please write an article that shows what a REAL family, living off of $40,000 a year can do.

7 2

really.REALLY

12/01/2010 11:39 AM

Can you write an story about people that don't earn $100,000 a year and want a year off? Their problems are small when measured against people earning $30,000 a year or two people earning $60,000 and less. This article has little effect and a narrow scope.

5 2

Dav1dicus

12/01/2010 2:18 PM

I earn 35000 a year. Im 25, and my wife is on unemployment. In southern california, its not something to boast about. We used to make 60,000 a year together, and now with a 6 month old baby, its pretty tight living. When you make poverty level income, you have to engineer every dollar like its oxygen on the Apollo 13.

With the examples given here, they clearly still have breathing room, and its rather uninspiring. I can appreciate the struggle from riches to rags, but hey. Welcome to the club.

Most of us face these problems day to day... maybe for a lifetime. Were not dealing with "goal oriented" budgets, our money vaporizes like water in the sand.

And no, its not just the unedjucated, foolish and ignorant that fall into this position. I have an AA in computer science and am working on a bachelors in business admin. Im not saying i am the pinnacle of righteous financial worthiness, im just saying finances dont work in a cookie cutter system - ever. Finances are a bloody surgical mess that can lead to lifechanging circumstances between barely paid rent notes and bills.

The real moral I encourage your readers to glean from this article is this:

"Live as though you are bankrupt; earn as though you own the bank" - because god knows i will if i earn more.

4 1

bobber1515

11/27/2010 12:06 AM

i think the first step in being a one job household household is to get jobs back in the usa so we can at lest have a job in households right now we have a lot of no job households and people look down on them like there the pelage

4 1

Real in MN

12/01/2010 12:26 PM

My God, Try living on a combined $40K a yr, one child, one on the way. Lost our house, now filing bankruptcy. How about an article on how to live like that? They currently make $70-80K/yr and I am supposed to pat them on their backs for their efforts? They better be able to make it on that much.

4 2

Humanikin

12/01/2010 2:55 PM

Step #1: Declare Bankruptcy

Step #2: Live on one paycheck

Oh... I guess we only need two steps.

1 0

waitressindebt

12/31/2010 10:36 PM

I really feel that there are alot of people worse off than the people in this article. They are living on more after downsized incomes than we did with 2 wage earners. There is no trick to it either, when the money is gone you have to quit spending. I never had much discretionary income so I never got used to recreational shopping, but I'm still surprised by how many people do just that! Happy New Years all!

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Donna_Freedman

12/14/2010 2:08 PM

Just wanted to point out that the Mathews family was living on $30,000 to $40,000 a year when Jaime wasn't working.
They do have more now because of her home-based business. But if some or all of her business coaching gigs vanished they could still manage on a lot less.

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bmos55

12/14/2010 1:38 AM

I still have hope. After my company downsized in August 2008 and I was one of many that were let go. I'm now starting to feel the effective of being out of work and with out a job and now without an income. Yes, I've reached my 99th week in August. What are people doing 55 and older and they can't find work? It very stressful and depressing.

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GG59

12/13/2010 8:57 PM

I found myself in a severe financial situation back in 2004. Cancer. I always thought if an American citizen that paid taxes all their life, donated to charities and so on, would get some help from government program when seriously ill. I was very WRONG! I got nothing...I had to use all my savings, cash in retirements, sell my vehicle and so forth. One thing I learned was how cheaply I could live. By the time the '08 mess started, I already was already living very frugal and owed no money to anyone. The biggest problem I find is locating a resonable place to live(rent) that isn't in a trash neighborhood, or violent/dangerous area that I can afford and still save money. I'm not paying high rent on anything...I'm a dependable paying tenet, don't trash the place or have wild parties, but everywhere I look landlords want a small fortune for housing. It's a rip off. Who's that guy that's famous for the line..."rents just to damn high!" I agree.

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Disgruntledpassenger

12/13/2010 8:53 PM

Where are the real people in this article, those of us who bring home less than 18K a year, who maintain health insurance, who contribute 20% to retirement, who raise a family and own a home, who save and don't live like millionaires and actually have a very good lifestyle?

Get a freaking clue, people! It's not the material things that matter. Live within your means, stop spending and stop filling your houses with crap that means nothing in the big picture. Cook at home, plant a garden, save and recycle like it used to be done long ago, spend time with family and friends, send the kids outside to play and actually play WITH them!

If I made the money these people made, I'd be retired early, no bills and living the good life!

0 0

BluCollerSarge

12/07/2010 11:24 AM

It seems that most Americans who are down on their luck, and having a really hard time are people who are or were employed in making or selling goods or services. Wal-Mart = China mart. It is very difficult to find ANYTHING that is made in the U.S. anymore. (Yeah, I don't want a Chevy)

On Wall Street, they make a living moving imaginary money around and 'creating' things like derivatives that later help to screw people like you and me. That is fake, and dishonest, and it is what the world runs on now. Folks, those powerful people in the finance sector are deeply connected with government, and it IS and conflict of interest. If you have a chance, please check out the docu movie out right now called Inside Job. It will really Pi$$ you off. I wish everyone who actually works for a living or is having a hard time right now has the very best. Peace.

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Sarduci1

12/01/2010 2:40 PM

For all those wanting "good jobs" Take a look at what you are buying and where it is made. We have done this to ourselves people. Welcome to the Third World of the United States..

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Cnci14

12/27/2010 9:44 PM

Ecuador, Malaysia etc. DO NOT retire in the U.S! do the research. As for the dual income deal, good luck, for some it'll take "triple" income. If you're not blessed with money "in the FAMILY" or a HIGHLY-HIGHLY paid professional, you are NOT going to be a "PLAYER". Get used to it. As the article said-create the "budget" you pretty much have to live with for most of your life. I have 2 degrees in business and journalism, and I am not going to be rich! EVER! SO what. Priorities folks. If you want a ton of money before you're 50, then you cannot have the life circumstances of the folks in the above article. You have to eat-sleep-think-crap-breath the "business". Otherwise it ain't gonna happen for ya. No matter what "uncle Ted" say's "life is what you make of it, hard work..bla..bla, that ain't the case...most of life IS LUCK! you are either in the right spot, OR YOUR NOT, period. Happy New Year.

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MMCI1

12/03/2010 11:02 AM

If you want a one income family, vote for Politicians that raise taxes on your employer.

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