How to Live on One Income

My husband and I just had our first child, and I am reaching the end of my leave of absence from work. My greatest desire is to stay home with my baby, but I’m not sure how we will get by financially, since there never seemed to be enough money when we were both working. Do you have any suggestions both for the initial transition as well as for when we have additional children and the expenses continue to grow?

The Early Years — Making the Switch to One Income

It is possible for many families to make it on one income today, even though society tells us differently. Certainly, you will need to manage your money with great care and skill. Proper budgeting and a simplifying of your material expectations will be key components of a successful plan.

You may also be surprised to hear that in many situations a second income may actually be costing your family money! It’s easy to think of our gross income as the amount being added to the family coffers, when in reality, we incur a great number of expenses just to hold a job. When all of these costs are considered, you may find that you are working for less than minimum wage, or even losing money.

Here’s what I mean. Let’s assume you are planning on working 20 hours per week and you anticipate an hourly rate of $15 per hour. Your gross income would equal $15,600 per year. Because two-income families find themselves extra tired and squeezed for time, they will typically spend a great deal more on convenience items, resulting in substantially higher costs. The following simple income statement provides an example of how a second income may be spent:

Gross Income $15,600


Tithe 1,560

Taxes (estimate @ 30%) 4,680

Higher food costs 2,000

Auto costs 3,000

Child care 3,500

Clothing 1,000

Meals out 1,000

Total expenses $16,740

Net loss $ 1,140

These amounts are estimates, and may differ from your own situation, but I would encourage you to go through the same exercise. You might be surprised when you see the results. Here’s what one woman had to say after our budgeting exercise showed she could stay at home:

My husband and I have been married just over a year and were excited about starting a family right away. Neither of us had a large amount of savings and both of us had school and credit card debts so I was convinced that I would have to work at least part time after the baby to make things work. My husband was convinced otherwise. He used your worksheets after we both read through the workbook together and proved to me that I could be a full-time homemaker. Our daughter is two months old now and I couldn’t be happier! It isn’t easy, especially living in the ultra-expensive Washington, D.C. area, but it is so worth it. We are encouraging all our young couple friends to go through this same process right away. — Mrs. D,. VA

After completing your own analysis, maybe you’ll find, like “Mrs. D.,” that you can fulfill your dream of staying home for your family.

The Growing Years — One Income and a Large Family

As one-income families grow in size, they’ll need to continue to be creative in managing their finances. Here are some suggestions that will help stretch your resources as your family grows:

• Make sure you have an annual budget, which will be your financial road map. Remember, when we fail to plan, we’re planning to fail. Unfortunately, 95% of Americans don’t budget, which is part of the reason so many find themselves in financial trouble.

• Avoid consumer debt. Interest charges on credit cards and other forms of consumer credit take vital funds away from your family. If you use credit cards, pay them off every month. If you are already in debt, put together a debt repayment plan now!

• Housing is typically the most substantial item in a family’s budget. Too frequently I see couples overextend themselves on their “dream home,” causing a great deal of anxiety and pressure because there isn’t enough money left to meet their other needs. When making a housing decision, don’t wait for the bank to tell you how much they’ll loan you. Instead, develop a realistic budget, take it to the bank, and show them what you can afford. Also, keep an eye on interest rates. Depending on the circumstances, refinancing your home can be a simple way to save money.

• Transportation costs are substantial for most families. Are two cars truly a necessity? Are automobiles a hobby for you that take up an inordinate amount of time and money from the family? If you financed or leased your car, the interest is costing much more than you think. Save up so you can pay cash next time.

• How many tasks do you pay to have done which, with a little effort and know-how, you could do yourself? Changing oil in the cars, winterizing the home, using cloth diapers, cutting children’s hair, mowing the lawn, sewing clothes, and learning how to do simple repairs all offer great opportunities for the family to stretch its budget.

• Do you find yourselves eating out frequently? Even an inexpensive outing every few weeks may be too much for most families. When grocery shopping, do you purchase cereal, cookies, soda, chips, frozen dinners and other prepared foods? While there are times when this may be necessary, it is a very expensive option. Purchasing staples in bulk, baking your own bread, canning and gardening all offer healthy and inexpensive ways to feed the family.

• When it comes to entertainment and recreation, much that our society offers is not only expensive, but not very wholesome for the family. The key to family recreation is making time for each other, not spending a lot of money. Taking walks or riding bikes, playing ball in the yard, and picnicking are all free and offer great family fun.

Do Not Underestimate the Mother’s Burden

Here is one final thought. In a one-income home where dad is the provider, it’s possible to underestimate the additional burdens placed on mom as spending on “convenience items” is cut back. My wife has a mentor who raised a large family in the 'fifties and 'sixties. Money was always tight, and she often found herself crying at the kitchen sink while doing the dishes, due to the overwhelming stress of managing all that had to be done. Most moms I know are stretching themselves to the limit for their families. Husbands need to be there with an encouraging word and a helping hand.

When it comes to finances, teamwork and perseverance will get you through many difficult times as we continue this work of raising saints for our Lord.

God love you!

Phil Lenahan is Director of Media and Finance at Catholic Answers and author of Catholic Answers’ Guide to Family Finances.

This article originally appeared in the National Catholic Register and is used by permission of the author.

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