| |
| How to survive as a one-income family |
|
|
|
Like a woman on a mission, McCoy began talking to
every stay-at-home parent she could find. Her quest to find ways
to live on less eventually became a book, "Miserly Moms: Living
on One Income in a Two-Income Economy," and a Web
site. A few years later, the family moved to Colorado Springs
-- by choice, not because their single-income budget required it.
"I don't think people should automatically assume that the
way to have more money is to work. After all, you're paying for
day care, gas for commuting, office clothes, dry cleaning and eating
lunch out. And then there's the cost of the recreational shopping
you probably do to destress yourself on the weekend," says
McCoy. "Sometimes not working is also a good financial deal."
Although Siverson and McCoy found ways to cut their
living costs after they quit work, most financial professionals
suggest you ponder the "Can one of us afford to quit?"
question ahead of time.
Quitting strategy
Certified Financial Planner John Vyge of Hillebrand Financial Planning
in Dulles, Va., suggests sitting down and carefully listing all
the expenses you will still have once one parent decides to leave
work. Yes, you can cut out day-care costs, professional clothing
and lunches, and other work-related purchases, but Vyge says couples
should not plan their one-income budget so tightly that they forget
about keeping a cash emergency fund on hand or stop saving for retirement.
Vyge is also big on getting rid of debt before one
of you leaves a job -- even if that means you need to postpone your
departure. "A good rule of thumb is that you're not ready to
move to one income if your total debt -- that means your mortgage,
including taxes and insurance, car payments and credit card payments
-- are going to take up more than 36 percent of the breadwinner's
gross annual income," says Vyge.
|
