Americans, Family, and Work
We all seem to understand that family life in America is not what it used to be. In fact, according to the Pew Research Center, in the United States in 2016 only 26% of married couples with children under the age of 18 are part of a so-called “traditional” family structure where only one parent works. This number stands in contrast to just a few decades ago. In 1970, 46% of homes were single income.
Of course, the rise of women in the workplace and the increased income that it brings has a number of advantages and the reasons for this change are complex. The reasons are not what matter, though. Reality matters.
This is because, often, the choice to become a one income family is not made willingly. Lay-offs happen. Children come along. Parents age and require our help and care. Whether it has to do with time, money, or both, all to often the “cost” of work becomes too much for many (especially lower income) couples to bear.
In these cases, making the transition to a one income family is a necessity, albeit a seemingly impossible one. But it doesn’t have to be that way. Whether by choice or by circumstance, it is possible to be a one income family in 2016 and there are a number of specific strategies that you can use to make the transition easy and (relatively) painless. With careful accounting, budgeting, and a little finesse, you can transition from a dual-income, time-starved household into a modern “traditional” one – no matter who stays home.
Tip 1: Shift Your Perspective on Money
One of the most significant shifts that couples need to make when they decide to switch to being a one income family is their perspective. Because of the reality of dual earners, multiple marriages, and general independence, there is a lot more “your money” and “my money” among working couples today. However, the only way to live off of one income is to think of it as “our money.” Working spouses need to recognize that at-home spouses still work, even if they don’t get compensated for it.
For many one-income households, the easiest way to do this is through an allowance system. At each pay cycle, designate a specific amount (say, $50) as “my money” and “your money.” This gives couples ownership over some cash for personal purchases while the remainder (and majority) goes towards paying shared expenses and debt.
Tip 2: Budget, Budget, Budget…BUDGET
Did I mention budget? Unless you are part of that top tier of earners who has more money than you need, budgeting has to be a priority, especially with a lower income. Both spouses need to sit down and look at their income, their expenses, their savings, and their debt. With careful analysis and planning, you can find creative ways to cut costs and maximize earnings. However, you can only do this if you know what you have and what you spend. This allows you to prioritize expenses and see what you can (and cannot) afford to cut.
FACT: A well-budgeted $55,000/year family can live just as comfortably as a family making twice that with no accountability. In fact, they probably live more comfortably and without debt. Remember, how much money you make is less important than what you do with it.
Tip 3: You NEED an Emergency Fund
Listen, you need an emergency fund no matter what. However, as a one-income family you need it even more. Why? Because you only have one source of income, so loss of that income means loss of all income. Set up a fund that contains between 3 and 6 months’ salary that is separate from your normal checking account. Then, plan routine transfers into that account each month or pay cycle. This way, you are constantly building your fund during times of relative ease.
Now, if a real emergency comes up, like a busted boiler in January, you have the money to take care of it without going into debt. Furthermore, because your emergency fund is constantly-growing, you are already refilling it for the next emergency.
Tip 4: Embrace the Value of Time
One of the biggest benefits of a one-income family structure is that what you lose in money you make up for in time. Without a job to get to each morning and a commute to pay for you can pack lunches each day and cook dinner each night. This cuts the budget as well as increases health. You can also likely eliminate other services that you had to pay for, such as childcare, house cleaning, lawn mowing, and snow removal. With extra time, it is also possible to make some money. Work-from-home freelance jobs often allow for flexible hours. Crafting and/or selling items online is another option. There are also savings and earnings apps that allow you to cash in on grocery purchases.
All these little things that you can do with more time can help to supplement your single income without taking away from the time-value you receive with at-home spouse. The trick is to reign in the requirements of these “side jobs” so that they don’t become “work” and make you pay for services (i.e. take out, housecleaning) that you can do yourself.
Tip 5: Ignore the Joneses
One of the unfortunate side effects of the two-income family model was most eloquently expressed by the late, great Notorious B.I.G.:
Mo’ money, mo’ problems
In the middle class world, this often means bigger and better everything. With more money to spend on cars, vacations, and clothes, friends and family with two incomes will always have “mo'” than you. If you want to live a successful single-income life, especially in an area with few single income families, you need to ignore them.
While it is never a good idea to give up too much, too soon, you also need to keep your decisions (or situation) in perspective and you need to be honest. Tell friends if you can’t join them at a restaurant. Explain to family why you want to cut back on Christmas gifts. The more honest and open you are about your choices, especially with yourself, the more likely you are to succeed in them.