Frugal Friday: Transitioning from two incomes to one
My husband and I have been married for about a year and a half. We are due to have our first baby this coming February.
My husband and I have felt convicted since we were engaged that as soon as the Lord blessed us with children I would stay home. Since we have been married, I have worked full-time and have carried the most consistent income. My husband, just recently, with the Lord's leading, signed on with a commission based mortgage company. We have felt peaceful about this career and feel that this is where the Lord wants us. However, the term "commission-based" says it all. We are not ever sure of what the income will be or when it will come.
For now I continue to work, but come the middle of January I will no longer be working. We have lived by a pretty strict budget for the past 8 months, however have enjoyed some luxuries in our budget that are hard to try and get rid of like eating out. My husband and I both grew up in unbelieving homes and both became believers in college. Needless to say we have some bad spending and neither one has ever seen a truly "frugal" life.
So with that I have some questions for you: What do you or did you do for health insurance? We do have debt- mortgage payment, car loan, student loans. Thoughts on this? What did your budget look like when you were living on $1000 a month? Thanks for listening and I welcome any wisdom you have. -S
Hi, S! I can't say I'm any expert on giving financial advice, but I'm happy to share my thoughts on your situation based upon what my husband and I have learned the last few years.
First off and most importantly, you mentioned upfront that the Lord has convicted you all that you would stay home after having children. Remember that God never calls anyone to something which He will not in turn equip them for. This should serve as a tremendous comfort to you.
No, it doesn't mean you will be living in luxury, but it does mean God will provide your daily bread. Obedience to His commands in our life always brings His blessing. So, keep that ever in mind and constantly look to the faithfulness of the Lord to take care of you. He will never leave you or forsake you.
As far as practical recommendations go, my first piece of advice is to completely cut off every form of debt in your life (i.e. do not allow yourself to use your credit card for anything else and do not take out any new loans on anything). Rip up your credit cards and switch over to a cash only/envelope system. Write down your basic living costs (tithe and basic living essentials) and take out enough money per pay period to pay each of these (stick the cash in individual envelopes and only pay for things out of the envelopes). Get a copy of Dave Ramsey's book, The Total Money Makeover today and read through it in the next two weeks with your husband.
While you are still working, use all of the excess money you have leftover after you pay your necessities and basic expenses to pay off every bit of debt you possibly can. I have no idea how much debt you have, but I do know that the sooner you get your debts paid off, the easier your life will be in terms of finances.
My husband and I purposed to stay out of debt through law school when we got married and it was the best financial decision we ever made. It isn't always easy, believe me, when you are living in a small place, have one old vehicle that seems to be on its last leg, and all your friends are buying homes and nicer cars.
When he was finished with law school and passed the bar, we were so tempted to move into a nicer place since we are pretty much bursting at the seams where we are. We very much considered taking out a loan to buy a home, especially since he had a good job and it seemed like we could easily afford the monthly payments of a decent home. However, we didn't feel a peace about it and with the unexpected things that have happened in our lives in the last two years, we now know why.
Seeing how easily life circumstances can change has really caused us to further resolve we will not go into debt unless our life depends upon it--even to buy a first home. I share our personal experience for the young people reading this who maybe have not thought too much about debt before. Avoid it, if you can at all possibly avoid it.
Second, start working to cut every expenditure you can. Write down all of your expenditures and start eliminating those which you can live without (cable, internet, cell phones, any monthly subscriptions, eating out, convenience foods, movie rentals, etc.). You might be surprised at how much you can cut just by evaluating every expenditure in light of, "Is this a basic necessity?"
After you've pared down to the basics, then start evaluating those basic necessities in light of, "Is there some way I could reduce this cost?" How about moving to a smaller home, learning to grocery shop frugally, getting rid of one car, bartering for hair cuts, making gifts instead of buying them, shopping at thrift stores and garage sales instead of buying things new, and so on. Start thinking outside the box. Instead of thinking, "This will never work." Ask yourself, "How can we make this work?" You might be amazed at what some creative thinking can cook up!
Third, after cutting expenditures, make a budget based upon the least possible amount you can live on and try to squeeze this out of your husband's commission check (once again, use the cash only system here). Pray that God would bless your husband's efforts and multiply them and give you creativity in making the most of his hard-earned income. Live on the least you can and if you have leftovers, put those towards savings (for a particularly lean time) and towards extra payment on your mortgage. (My husband recommends that, like Dave Ramsey says, you set up a $1000 emergency fund first and then put all of the extra towards paying off your debts.)
Fourth, (if your husband is supportive of this) start thinking of things you can do from home to help bring in extra income. Since you are having a baby soon, please don't go overboard with this, but just keep it in mind and start praying for direction in this.
Look around your home and find some items you are no longer using and sell them on eBay. Consider what skills you have which you could put to use to earn money during your baby's naptime. (Though for the first three months at least, I say to nap when your baby naps. You'll be needing all the extra sleep you can get!)
In answer to your other questions, you can read detailed specifics of our law school budget here. Obviously, what worked for us, won't necessarily work for you, but it can hopefully be a help to you in thinking through expenditures.
As far as health insurance, we did lots of research on this and for the first part of our marriage, we were on student health insurance. We are currently privately insured through Zander Insurance and were very pleased the rates we got. Check into that and other options in your area.
You might also consider health insurance alternatives (such as Medi-Share or Samaritan Ministries), if you do not have any major medical concerns. I've heard of many who have very much benefited from these and it was something we looked into, but it wasn't going to save us money compared to our inexpensive student insurance, so we have never gone with it.
Most of all, never take your eyes off the Lord. Claim His promises and step out in faith. Don't try to do anything in your own strength. Continually ask Him for guidance and direction and constantly be praying and discussing this with your husband. And see God do great and mighty things on your behalf!
I'd love to hear from others of you who may have been in a similar situation as this couple and your thoughts and input for them.
Related Links: If you're not already, be sure to check out my other blog, MoneySavingMom.com which is dedicated to helping women become better home economists. I also highly recommend Dave Ramsey's books, advice, website, and radio show.
Originally published November 2006.
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Labels: Frugal Friday
posted by Crystal Paine at 8:35 PM
25 Comments:
I have been blogging about things we are working on to become better stewards. I highly recommend Dave Ramsey's program. We are currently in FPU, and have gained so much insight. I have been home for 16yrs., and am still learning new ways to use the Lord's gifts wisely!
I gave up my full-time income (slightly more than my husband's at the time) to stay home with our kids. One thing I would suggest to ANY two-income couple... live like you are a one income couple and sock the rest into savings (provided you have no debt.) Because of God's grace and very carefully living below our means, we somehow seem to have more money now than we did when I had a paying job.
I always enjoy Frugal Fridays. Thanks Crystal!
Julie-Anne
Thanks for a great article! I have friends who ask me questions like that all the time. I'm going to link to this from my blog. Thank you.
Amanda T.
www.xanga.com/TrentTribe
My husband and I knew that we wanted me to stay at home after we started a family and although we did live like we were on two incomes, we made sure our basic expenses could be pared down to live on one. While I was pregnant we put away my entire income into either savings or paying down the house payment. Since I left my job 2 years ago we've had good times when money was easy to come by and some lean times where we pared down our expenses even more.
We've always been fed, we've always been clothed, and we've always had a roof over our heads. The Lord has always taken care of us.
Hello,
Here are a couple of helpful tips:
The most important thing you can do is trust God to provide through your husband's income.
Second most important would be to work towards changing your mindset about what you "need" to live on. I think in this country we all (myself included here:) think we have to live up to certain levels of material stuff to be happy. Kind of like keeping up with the Joneses.
For example, most of us think we have to be able to afford a tv, radio, new clothes, 2nd car,and meat at dinner every night. To be honest, I kind of expect all that too:)
However, when I was growing up we had much less and it was considered completely normal -- I didn't even have a desire for more stuff!
Take Care,
Trixie
When we married in 2000, my husband had a graduate assistantship paying $19,000 a year (plus tuition and fees), while I had a scholarship paying $6,000 a year beyond tuition and fees. When our son was born in September 2001, my husband's income was $20,000, and my scholarship was gone. We lived on about $14,000 a year, the rest going to savings or giving. Most people wouldn't have expected us to be able to save anything. We qualified for WIC, but never took it.
We lived in a small apartment with low rent. We had one used car, which meant usually I was without one. I cut my husband's hair. We did clothes shopping at Goodwill. I didn't buy convenience foods, except for a few condiments on sale. I didn't buy canned beans or crackers, but dried beans and made my own. I ground my own wheat, so we could have whole grain at low cost. We shopped loss leaders at various stores, going to 2-3 stores a week to spend as little as possible. We did not have cable or rent movies or go to movies or go out to eat or anything like that. I started cloth diapers initially for financial reasons (once we moved into a trailer and had our own W/D). When using pay machines, one washer load wouldn't completely dry in one dryer load, so I hung up shirts on hangers to dry over the bathtub. This reduced the volume enough to need only one run through the dryer. Etc.
Health insurance was cheap as students. Now, if my husband didn't have health insurance through work, we'd look into Samaritan's or Medi-share, or get a high-deductible policy.
Basically, cut every expense possible to the minimum possible. We spend money on things now that we wouldn't have then, like crackers and canned beans. But, we still cut our expenses a good deal. With 4 children and #5 on the way, we spend $19,000 a year (health insurance paid for by job). The rest is given, saved, and paid to the government. We own a home that we paid cash for that was a fixer-upper. We still buy used vehicles. Debt is not an option if our lives do not literally depend on it.
It is very possible to live on much less than what the average person thinks is necessary.
My husband and I felt like I needed to stay home with our son, and even though our income decreased through careful budgeting and conscious purchasing we have been able to make it work. Never forget that if it is the right thing for you to do, God will provide! (Although, sometimes he provides wisdom!)
After 28 years of marriage I can guarentee that the unexpected WILL happen! Do not live on your whole income, & don't leverage it--especially when your husband is on commission!
My comment doesn't so much apply to this specific reader's question, but more for women who would like to be full-time homemakers "someday."
My husband and I are expecting our first child to be born in December, but I have been a homemaker for almost one full year already.
We have found tremendous benefit to this, because I have been able to learn how to be more frugal, cook delicious, inexpensive meals from scratch, bargain hunt, and reduce our expenses. We have more money NOW than when I was in the workforce!
I see a great benefit to "learning the trade" before kiddos come along. I can't imagine how much harder it would have been on me to learn how to cook efficiently (and everything else) on top of raising a newborn.
Finally, we aren't used to two incomes. We spend less because we make less, yet we aren't deprived. It's so easy to spend that 2nd income if you have it.
Instead, I do some side projects from home to bring in extra money, which we put into savings.
Hope this helps someone out there!
My husband and I lived on one commission-based income for the first few years we were married. He runs his own company right now, so it's still sort of like that (if no money comes in, no goes out!). I will tell you it is very challenging, but can easily be done with prayer and preparation. My best advice is to plan for those weeks or months that you might have nothing come in. Even in God's protection, there are still famines or lean time. It is tempting in times of plenty (when your husband brings home several thousands of dollars one month) to spend on things you have been "needing" but living without or to just go out and have fun (although I do recommend doing some frugal fun ideas in celebration of a great month). We always tried to get as many paychecks out of a large commission check as possible and either pay down debt or stock it away for a rainy day. It all comes down to a matter of prayer, though. I tried to pray for my husband daily and throughout the day, especially if I knew it was a rough day, week, or month for him. Commission-based careers can be wearing emotionally for both of you, so make sure you are a constant source of encouragement to your husband, even if/when there is no paycheck. My last piece of advice is to find someone that has successfully lived on one commission income and counsel with them. We did our premarital counseling with a couple in our church that had raised their family of 6 on commission for 20+ years. They taught us the ups and downs and how to be prepared physically, emotionally, and spiritually.
Crystal,
This topic is so relevant to me. So much so that I started my own blog to tell my story.
I was a full-time Angiography Nurse working50+ hours a week, longing to be home with my family. God was so good to our family and I sarted a series titled "Coming Home", sharing what God has done for us. This is a practical nuts and bolts story of God's grace. I am a total newbie to both computers and blogging, but God has opened my eyes so that I am learning quickly. It is my desire that if one woman is inspired than that is worth it to me. One mama inspired could mean a whole generation!!!
You have been such an inspiration along this journey. I have been reading your blogs for over 2 years!!!! God bless
Thanks for all the great tips this week everyone!
Brandi
Amy,
I completely get what you're saying about seeming to have more money now than we did on two incomes. I look back in astonishment and wonder "What did we DO with all that money?"
I also wonder what I did with all that free time! I never felt like I was lazing around back then, but I get a LOT more done in a day now, with 2 preschoolers, than I did before KID 1 came along!
I haven't read Dave Ramsey's book, but his web site is chock full of information that has been helpful to my husband and I.
An emergency fund is an absolute must, especially in this situation where the income is based on commission earnings.
I would also encourage her to budget for things that are bound to happen in the future. For instance, we set aside money each month for future car repairs, home repairs etc. so that when these things come up they don't destroy our budget.
Your blog is so helpful and I thank you for the frugal friday. I would like to pass on the brilliant webblog award. For information onhow to pass it on please check out my blog!
Thanks for doing frugal friday! I have a lot of links to look at!!! :)
We love Dave Ramsey! As a stay at home Mama of five, married to a small business owner, our biggest struggle has been finding affordable health insurance. (Zander quoted us over $1000 a month!)
We've found that instead of paying someone $12,000 a year for coverae we might never use, we can pay ourselves by putting $ into savings for medical expenses. Even with having babies and a son with kidney problems - this is the most frugal way to go.
I knew from working as a nurse prior to children that health insurance companies pay pennies on the dollar for what doctors bill them. I think every MD we've seen has given us a reduced rate without us even asking once we mention being self pay.
Just an option to think about for large families.
Blessings,
Hannah
Crystal,
I've been reading your Supermarker Savings book all day and have a bunch of coupons clipped and ready to go. I also planned out our meals for the week, it was actually pretty easy. I realized I do not even need to buy too many things to make it happen.
My husband and I have been married for 5 months and have been living on the envelope system since the start. Sometimes I hate it, but it's really helped me to cut back on spending. Our grocery envelope is about 350 a month, I grew up where money was just spent on groceries like it was going out of style, and our house was full of food. I'm learning that I can stock up and save, and that we don't need to get the most expensive thing.
So, S, I encourage you to cut your grocery budget, if nothing else. Groceries and gas are the 2 areas where we see the most money going.
Megan
I could not agree more with Kacie. Right on the money (haha).
When my husband and I were first married, I did not work. We wanted kids right away, and felt that if I were to get established in a job, it would be too easy to be wrapped up in that second income, spending money only on ourselves, etc. If a couple gets used to two incomes and spending those two incomes on themselves, it is a complete culture-shock (and sticker shock!) when you suddenly have one more person and one less income. I did not want to get comfortable making extra money, so I didn't work. This has helped us tremendously. I learned to cook and manage the house, etc. before having our daughter, and it helped me adjust when she was born. If you insist on working up until you give birth, then live only on his income, and put your income toward savings while you can. Get used to only one income, and create an emergency fund (the one thing we have not been able to save up, and I wish we could have been able to) and pay off as much debt as you can. Get into the mindset that if you cannot pay for it completely right then, you do not need it.
And most of all, trust God. As stated, if God calls you to something, He will properly equip you. He won't call you to something and then just leave you out in the cold. He is very faithful! Even when times are tough and you are $6 short in rent (yes, $6! That was just this month!), He will provide. If you need $20 to get you through the week until payday, that money will show up in some shape or form. And if someone wants to bless you, please accept it. Don't deprive them of that opportunity. Later on when you have some extra money, you can financially bless someone else as well, which is even better than paying someone back for their blessings!
What a great respond to that question. I have decided to stay at home with our little one as well and thought that you gave great advice to this young women.
One thing that has always been 1 of our priorities is to give to the poor and be generous. We can never out give God. The more we give the more He shows up and bless us! One thing to do is to pray about where God would have you to give and what ministry's He wants you to be part of.
To find out more about budgeting you can check out http://www.organizingconnection.com/Read/TheOrganizingBlog/tabid/71/EntryID/116/Default.aspx
Wonderful topic even for young women who aren't married! I quit my full-time job to be available to my Grandfather and Great Aunts. They are all in their 90s. It was so important for me to do that, sort of like quitting a job to take care of children, although they are all in great health!
A few things I've been doing to cut down on expenses (not much income coming in!!)-using my Jeep less. It used to take $60 to fill it every weekend when I was going to work! Now I've cut down on errands, or learned to only go somewhere if I can hit two or three stores in a row. I've also started to bike places. I found a nice old bicycle in the garbage (no gears!) that I've been riding a lot lately. Especially to do all of my CVS shopping and to the library. I bought a $35 double basket that will last years and years, and I'll get exercise, and save on gas money!
I've also been clearing out the clutter in my house and selling stuff on Ebay and Craigslist. It was a great opportunity to learn how to sell things on the internet, and how to set up accounts on the computer like Paypal and online banking. We have really great yardsales in our area-people who spend alot trying to look wealthy but I'm sure are in tons of debt! We get nearly new stuff that we were able to furnish our house with (my parents), and one day, when I'm done with my clutter will sell things I've bought at garage sales for profit.
Your blog has been so helpful to me to learn to "think outside the box" on money and radical savings. I truly think my future marriage will be SO much better now that I've learned these things at an earlier age. Thanks again! Joy
Using the guidelines from Dave Ramsey's website has been a great blessing for me in handling my finances. I am a single woman with a mortgage (ouch!). I have recently attained my first goal - $1000 put aside in savings. I am now in the process of paying off two small debts (totalling $4200) & then will be making as many additional payments to my mortgage as possible!
I agree with the idea that waiting as long as possible before taking on a mortgage is a wise idea. Whilst waiting to do this I'd recommend learning as much about finances as you can - in this area of life, knowledge is power.
These were wonderful, I'll try to add my own next week.
What a great post! I know you touched on it, but I wanted to encourage anyone in this type of situation to always, ALWAYS pay your tithe.
It has been amazing in our lives to see how often OUR math didn't add up, but GOD'S math did. Even when you don't think you can "afford" it, pay your tithe and God will not only supply your needs, but bless you as well, either financially or in other ways. (Malachi 3:10)
Ok. Mini-sermon over. ;)
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