Tuesday, December 14, 2010

Going From Two Incomes to One (Part 2)

You can read Part 1 here, but I left as:

We always had in the back of our minds that if our parents could no longer watch the kids, that my husband would quit his job. However it never happened that way. I was left torn for months, waiting for a “sign” that he should stay home with the kids. I never got that big “sign” I was looking for, but I did get some small inclinations that it was time to make a change in our lives.

My husband and I seriously started considering him staying home with our kids about 9 months earlier. Some of our compelling thoughts included:
  • When the kids get sick, the stay-at-home parent would be able to care for them and not waste vacation days.
  • We wanted our almost kindergartener to be able to get on the bus and come home on the bus and not to have to worry about before and after care. This was a compelling argument for us, since we both had stay-at-home Moms growing up ourselves.
  • Are we being selfish with wanting to make more money when our kids really just need our time? We were at a point in our lives where we were settled in our home, had two decent cars, and had completed most major home repairs.
  • Do we really need two incomes?
  • Who is going to help the kids with their homework? That is our responsibility not their grandparents.
  • Our parents are getting older and how long will they be able to care for our kids?
  • Even though they wanted to watch our kids, we felt as if we were taking advantage of our parents and asking so much of them. They didn’t have to do all that they do for us.
  • I was beginning to dread having to wake up two sleeping children to get them dressed and off to Grandma and Papa’s. I felt guilty. Plus the fact it was making me late for work.
With all of these compelling reasons, my husband and I decided to put a plan in place to prepare for him to leave his job. It was never a question on who would stay home with the kids. We made a pure financial decision. The other aspect was that I adore my job, have been with my company for over 10 years, and carry the health insurance. My company gives me outstanding benefits plus continues to promote me within the company. My husband had been stuck in the same position for five years and saw no promotion in his future.

About 4 months before my husband was to officially leave his job, we put a plan in place to reduce our spending and see if this one income set-up could actually work for our family. By then I had already been heavy in couponing and the drug store game and had seen our grocery bill get cut in half. This gave me encouragement. Other steps we took to financially prepare included:

  • Continued to use coupons and play the Drug Store game to see how low we could get our grocery budget.
  • Cut our eating out down to one time per week.
  • Aggressively paid off our last car loan.
  • Completed our bathroom renovation and paid cash (our last major house renovation).
  • Watched spending on our credit cards
  • Read Dave Ramsey’s Book The Total Money Makeover
With all of this being done, a month and a half before the scheduled “quit” date, we ran a test month on one income. All of my husband’s income went directly into a savings account.

To be continued in Part 3...

1 comment:

  1. I love Dave Ramsey..... And I really enjoy reading your blog. I am a single mom of two girls. And to top things off I just stopped getting child support (do to X not having any work) and my rental property tenants are having medical issues and might not be able to pay in full (its my parents) so I am bring dropped down to one income without any planning. Keep posting. I am always looking for ways to save and get ahead.