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April 03, 2006

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It all comes back to perception. People perceive that they need more than is necessary. If people could realize that there is a marked difference between need and want, they would be able to get ahead. Even if people choose to have a two income, or more, household, they should still see what they could do to live off of one income. What would happen if an income is lost, either temporarily or permanently? I think I know the answer, as indicated by polls about families living paycheck-to-paycheck.

For instance, my wife's family lived on one modest income for years. There were five children in the house at the time. As my wife reached high school, and the youngest child reach elementary school, my mother-in-law decided to go to school to become a nurse. Now, the youngest child is just out of high school, and they pull in a substantial income through two working adults. You would think that their expenses diminished as the children moved out. However, they have very high withholdings for taxes, and they still owe the IRS. After preparing their taxes, they are dumbfounded as to where the money went all year.

The answer? Well, they don't live a lavish lifestyle, but they do have many more wants filled than before. They have two vehicles they pay for, when they used to have one company vehicle and a paid off used car; they have satellite, internet, cell phones, and featureful home telephone service now when they used to have a standard phone line; they go on many vacations throughout the year, they go shopping often, they go out for dinner more often than necessary, and they go to movies. They did none of these things before, and they lived fine. What is it that happens? People feel so free when they have a new found income and they think they deserve to spend it... but then they realize that they cannot just get anything they want without financing. Then, it just becomes a cycle.

People just must reverse the cycle. Wealth can be made with the same cycle, and it can grow exponentially, just as debt can.

My husband just entered the workforce, so he still makes only 31,000. (Which is a lot more here than it is in most places, but is still not very much.) We could afford to live on his paycheck, but we would not be able to own a home in the near future.

We have one little girl. Somehow by luck, getting some exceptional bonuses at work, my wife is able to stay at home as I head to the office. I have spent time each week going over our budget. We have rented for the last 8 years and are currently getting ready to settle on a house. Things will definitely be changing once this happens. We will eat out less, lower the cable bill, stop buying books, maybe just use a cell phone and get rid of the "landline". It's either make personal sacrifice of living life with less convenience or work to put our daughter in daycare. My choice is for my wife to stay home and it will be tough but I believe the sacrifices will be worth it.

No children, and shortly after we get married in 5 or 6 months we will have only one income after the fiance goes back to school full time. Hopefully, we manage this quite well and can then have somebody stay home when we begin having children.

When we got married (almost 6 years ago) my husband and I decided that one of us would always be at home with our children. That said, every decision we made: financial, lifestyle, education etc. supported that overall goal. I finished school before we had children, and we bought a house we could afford on one paycheck. Our first is a little over a year now and I work very part-time (12 hours a week)and my husband has a flexible schedule and he is able to work from home a couple days a week, so one of us is always able to be with our daughter.

The first commenter is absolutely right about being perceived as having an elitest attitude, when you've made those kind of decisions. People at work often ask me why I don't work more and when I tell them why, they often reply "Well, I'm glad you can afford to do that". The way(most)people talk about it, makes it sound like people who plan for their financial futures or choose to live with less are some kind of freaks.

I think in alot of cases it is a choice either way. I plan to stay at home while my wife works once she completes her PHD. I wouldn't mind working as well, but between the cost of a 2nd car, day care and other expenses incurred by my taking a 2nd job, we wouldn't actually be making much extra as a family, and I'd lose out on time spent with the kids.

On the other hand, I think telling someone you plan to put your child into daycare it is met with a similar cold response, as it is viewed as caring more about your career than your children. It works both ways, people get defensive because they are working a second job (even if it is a choice) because if they act like it is a choice they are treated like they care less about their children than those people that make the choice to have one parent stay at home with their children.

My wife and I are having our first child soon and we feel blessed that we have the opportunity to go down to one income. The numbers, strictly speaking, argue for a two income family, but we have pruned many "wants" from our lives and believe we've made the right choice. I try to respect that people have different financial circumstances and expectations, but I wish that more people could choose to have a one income household. The two income requirement is possibly the clearest indicator of a falling standard of living in America over the past thirty years, but I believe the trend could be reversed through realistic definition of "want" and "need".

My wife & I had our first child quite a while ago (he's now 28), but we had the same choices to make. We chose for her to stay home, at least until the kids were in school. I made $12,500 a year. We owned a "starter house". We adjusted & cut out some of the fat. We made it. She went back to work part time when the kids were well on their way. Later she went back full time when the youngest was in Jr. Hi.

She retired 2 years ago (at 55) after 10 years full time work in order babysit our grandaughter so she didn't have to be in day care all day.

I call her not working those years "Our greatest luxury". The retirement check she gets for those few years is small. I'll work until 62 instead of 60 as I'd like, but we feel it was worth it.

It's the satisfaction of doing the right thing that makes it worthwhile!

By the way, we moved up to a nice suburban house, nice vehicles & put money in the bank. It can be done. We even took a few nice vacations. You just have to want this more than the extra income and the extras it buys!

Gary

What I think is missing in most of these posts is that some people, regardless of the cost cutting measures they take, are still are struggling financially. Yes, some times there are still options for these people - maybe selling their house and renting, stopping contributions to retirement, and/or not saving for your children's education. But some of us view these things as just as too important. All two income families are not the spend-thrifts some commenters maked us out to be.

We too can make sacrifices and budget our money. We chose to sacrifice some of our sleep time and time together by working opposite schedules so that we could have as much time as possible with our children. Not everything is always black and white.

My son was 6 months old when we decided to go down to one income. It broke our hearts to drop him off with (for all intents and purposes) strangers for 40+ hours per week. We would miss all those cool "first" and he was constantly sick with all the normal day care cooties that kids pick up.

In making our decision, our income went down by about 50%. It wasn't easy, but honestly, it wasn't that hard. You learn that many of the expenses that went with holding that second job disappear as well - like daycare expenses, gas for the commute, eating out for lunch, and business clothes.

Now our son is 6 years old and my husband is still at home. We have discussed him going back to work, but with summer vacation coming, we'll likely hold off any further discussion until we get closer to fall. In doing so, we would try to find a way to insure that someone is always home when our son is home, possibly by shifting hours so that one of us is home to see him get on the bus to school, the other sees him arrive home.

It is a sacrifice, but oh so well worth it!

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