Our question of the month comes in from Tyler from Livonia, Michigan:
The thought of potentially living on a single income is scary, but it’s something that we’re considering more and more as a family. My wife is growing tired/weary of simply leaving our son at home and not being there / providing for him as she feels she should.
So, the question is this…
Any tips for transitioning to a single income to support a family?
I know it’s something the Hills navigated quite successfully, and I’d like to at least explore it to see if it’s doable for us. My initial thoughts are around a phased approach, but it may be better just to dive in.
Thanks for calling in Tyler!
First of all, congratulations on your first couple of years of being a Dad. I’m sure I don’t have to tell you that it’s one of the most difficult and one of the most rewarding times of your life.
Based on this voicemail and our email back and forth, your heart is in the right place in my opinion. You and your wife want to do what you feel is best for Henry and you’re willing to make sacrifices to get there.
How the Hill Family Transitioned to a Single Income
You asked how Nicole and I made the transition to a single income so I wanted to answer that first.
Before Zoey was born, Nicole and I talked about how we could make the transition from both of us working to just one of us working. We both agreed that it would take some time and wouldn’t be an overnight thing.
We were in the midst of paying off around $50,000 of debt and we were starting to see the light at the end of the tunnel. The single income conversations were starting to seem more real.
Related Article: How to Increase Your Net Worth by $700,000 in 7 Years
Part Time First
Once we were consumer debt free and consistently living on our monthly budget, Nicole was able to go part-time at her job. She worked at an incredible company that allowed her to do that.
(For budgeting, I love Mint by the way – if you’re more into spreadsheets, check out Tiller, they’re doing some great work as well.)
My Mom, Nicole’s Mom and a little bit of daycare helped us take care of our little girl for the first two years of her life.
Budgeting and savings automation was very important to the process too. We were solely living on my salary and saving up hers at this point. Everything was factored into the budget and her salary was automatically saved each month.
Then Full Time
After Calvin was born in 2014, we finally went from two salaries to one salary. By this time, we were used to living on one salary anyway because of our high savings rate.
So … that’s how we did it.
- Got rid of all our debt
- Lived on a monthly budget
- Practiced living on only my income
- Went part-time first
- Full-time stay-at-home Mom
Transitioning from Double Income to Single to Become a Stay-at-Home Mom
Now, let’s say that your wife doesn’t have the option to go part-time. Not all companies, schools, businesses work like my wife's company did.
You still need to get to the point where you and your wife are living on only your salary.
So how do we get there…?
Live on a Monthly Budget
You may not be into budgeting, but if you want to do something like this, I feel like it’s a must.
I’d recommend using a system like Mint (or Tiller if you’re into spreadsheets) to track your spending and saving going forward. This will help you achieve this major goal.
Eliminate Your Debt
If you have debt Tyler, make a plan to pay it off as soon as you can.
I like the Debt Avalanche method. You’ll have off your debts with the largest interest rate first so you’re freeing up more cash quickly — if you have credit cards with super high-interest rates pay those first. Once you’ve paid off one debt, use that same intensity and cash to pay down the next one. Again and again, until you’re debt free.
Related Article: The Life-Changing Benefits of Complete Debt Freedom
Trim Back the Unnecessary Expenses
Tyler, if you’re going to do something radical like this … it’s going to take some sacrifice on your part. After you’ve done your budget, decide what line items can be reduced or eliminated.
Here are 5 areas to consider trimming:
- Gym memberships
- Cut the cord on cable package or other entertainment subscription services
- Going out for dinners, drinks, and work lunches
- Groceries (transitioning from Whole Foods to Aldi)
If you feeling like cutting back and budgeting is a lot of work, remember that you’re doing it so that your wife can stay at home with your son. It’s a short-term sacrifice for long-term gain.
Practice Living on One Salary
As you’re trimming and saving, you’ll notice you have money left over each month. Save all of it in a savings account so that you have a nice emergency fund of 3 months of expenses.
This way you’re practicing living on one salary and saving up your dough for a rainy day.
Assess the Benefits Situation
Before your wife quits, you’ll want to assess the benefits situation at your job.
- Will you be paying more for health insurance each month?
- How about dental?
Factor those extra costs into your budget as well.
Increase Your Income
If you’re still finding that it’s going to be difficult to cover your monthly expenses on just your salary alone, find ways to make more money.
Have you been exceeding your goals at work and you think you’re due for a raise? Ask for it! Be sure to list your accomplishments and your contributions to the company instead of speaking about your personal need.
If your full-time gig is not an option to get more money, consider a side hustle that makes you some money in the short-term (perhaps just for the debt pay off period). You may have a hobby that you love that could net you some extra money as well.
Related Article: Finding Life Balance with the 50/20/30 Savings Rule
Ready for Stay-at-Home Mom Time
Once you’re able to live on your income only Tyler, your wife is set to leave her job. Obviously, she’ll want to give plenty of notice to her employer and leave things in good standing. Who knows? She may want to go back to that job or industry soon.
Realize that Being a Stay-at-Home Mom is not a Luxury
While staying at home with the kids can be a blessing to you and your wife, it’s not going to be easy. There will be many stressful days for your wife.
Take time to love her, show her your appreciation and give her a break every once in a while. Let her get out of the house, read a book or just sit in silence for an hour. Whatever her relaxation “thing” is, support her with that.
On occasion, I’ve been guilty of not appreciating my wife’s sacrifice as a stay-at-home Mom. The best way for me to truly understand what her life is like is to stay at home with the kids even just for a day without her.
It’s gotten more pleasant as the kids have grown, but when they were like 3 and 1 and I stayed home with them … let’s just say my stressful job seemed like a cakewalk.
I hope this answers your question Tyler!
Either way … it’s going to take time. You’ll have to phase these steps into place. I’m sure you know that. Start by making a plan today and take some action.
Money Master of the Week
Congratulations to Matt from California for paying off $40,000 of student loans in 4 years!
Matt partnered with his wife to eliminate this bothersome debt from his life for good. They lived on a budget through Mint and created a solid line of financial communication early in their marriage.
They are now extra cash to plan for their future family.
Matt from Northern California is our Money Master of the Week!
You can learn more about Matt’s financial path at Spills Spot.
If you have a financial victory you want to share on this show, please leave me a voicemail (or email) and include the following: name, location, your big win, how you did it and your plans for the future.
Your story will inspire others to save more, make more and plan for their family’s future.
Our Featured Guest: Dave Hanley
Dave Hanley is CEO of Tomorrow, which helps families make long-term financial and legal decisions together for the first time, in an easy-to-use app designed to protect their futures. He is an accomplished CEO, digital entrepreneur, and social advocate.
Prior to founding Tomorrow, Dave founded Banyan Branch, a leading social media marketing agency, which was acquired by Deloitte Digital. Prior to Banyan Branch, Dave was VP of Marketing at Shelfari, the social network for book readers, which he helped grow to more than 2 million members in 18 months, before it was acquired by Amazon.
He also served as Director of Product Management at RealNetworks, where he oversaw the launches of Rhapsody.com and Rhapsody’s Web services program. Earlier in his career, Dave worked in economic development with NGOs and banks in Asia and Latin America that were implementing and assessing microcredit programs, including time as a Fulbright scholar. Dave was selected to the prestigious World Economic Forum Young Global Leader program, where he is an active participant and advisor.
Dave is a loving father of four children, adventure traveler, and spirituality seeker. He holds an MBA from Stanford University and Bachelor’s and Master’s degrees in public policy from Brigham Young University.
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We have weighed this many times. We could have my wife stop working (and were seriously considering it, since her request for a sorely deserved raise were left hanging to for over 2 years) but it would set our date for being financially independent back by 10 more years. We have four children and once our youngest (currently 1) is in 1st grade, that’s no more childcare at all (we have been paying some form of childcare since 2008) – at that point all of her take home pay can go towards building our stash for retirement.
That all being said, my wife does somewhat enjoy her job, and the lure of financial independence in our early 40s rather than 50s was enough to keep her there. As luck would have it, the raise finally did go through and will bring our FI date even closer.
Ideally we would have been FI before having any kids, but we were never ones to do things in any semblance of order. We dated long distance, had a child (moved to the same city before this happened), bought a house, and THEN got married 🙂
Everyone has a different path and yours sounds incredible! My wife and I dated long distance for 6 months before we got engaged. LA to Detroit – lots of red eye flights!
Your FI plans sound so inspiring! Congratulations! We’re working our path right now through rental real estate – saving up for our first home this winter.
I’m glad you enjoyed the show. Thank you!
I think people who are trying this should have a sizeable emergency fund in case something happens to that one income source. You never know. It’s been 9 years since the last recession, and another recession would cause a lot of people to lose their jobs.
Great point Troy! I know my wife and I both feel comfortable with a sizable emergency fund.
Andy–Thanks again for featuring our question on the blog. The steps and advice are fantastic, and we’re looking forward to approaching this phase in our lives with purpose and a strategy!
You’re welcome Tyler! Your sacrifice will do wonders for your family. Thank you!
Great episode Andy, and thanks again for having me on the show! Loved being a part of it.
Thank YOU Matt! Congratulations on crushing your student loans. You and your wife are going to do some amazing things.
Another very timely post as my wife and I are considering moving from two income to one with the birth of our baby girl. The biggest key is getting rid of as much debt as possible, which we’ve been able to do over the past seven years. Thanks for the additional tips!
I’m so glad to hear that this episode is timely for you! It’s one of the most difficult and important decisions we ever made as a family. There will be sacrifice, but it’s worth it.