Parenting

One Income Living in a Two Income World by Deborah Taylor-Hough I hear it all the time: "It must be nice making so much money you can be home with your kids. We could never afford to do that." Excuse me?! Our family of five lives on an income which could easily qualify for several low-income programs. We make so much money, huh? Where is it?! Now please don't get me wrong. I'm not complaining. My husband and I have voluntarily, and quite happily, chosen this frugal lifestyle. But it's funny to hear the misconceptions others have about our finances. COMMON MISCONCEPTIONS The assumption seems to be, if you're home with your children full-time you must be rolling in piles of money. Common urban folk-lore unsettles us with the "fact" that it will cost over two hundred and fifty thousand dollars to raise each child to adulthood. According to those figures, it would cost over half a million dollars to raise our three children! Gulp. . . .Maybe the numbers are accurate if I bought my children's clothing exclusively at up-scale specialty stores, sent "Buffy" and "Skip" to ultra-expensive private schools, and outfitted their rooms with the latest audio/visual equipment and top-of-the-line designer crib ensembles. REALITY But the reality in our neighborhood is drastically different. Nearly every family on our block has consciously made the choice, at least for a time, to make the necessary sacrifices so one can parent can be home with their young children. I hope you won't think we've all dropped out of life and taken up an existence of soap operas and bon-bons. Far from it. Many of the women have cottage industries or attend college. Some do consulting work to stay abreast of their professions. A neighbor stays home with her children, actively pursuing a writing career. But even with additional part-time incomes, the families on our street don't make the money that statistics claim we'll need to adequately raise our kids. But raise them successfully, we will! THE SECRETSo, what's the secret to "one income living in a two income world?" Actually, there are several easy tricks: Watch Your Purchases Watch your purchases, even small ones, carefully. If you're cautious with your pennies, the dollars will take care of themselves. For one month, keep a detailed spending diary of all expenditures, even for newspapers and coffee. Seeing it all in black and white can be eye opening. Buying a latte' at the local espresso bar each morning can easily cost you $30-$40 per month. Most people spend at least $5 each weekday on food related items at work. (Lunch, pop, coffee, snacks, etc.). Bringing lunches, treats and drinks from home could save your family nearly $100 per month, or $1,200 per year! Groceries are one of the few fairly flexible expense categories in most families. Learn tricks for saving money by careful meal planning and using up leftovers. Investigate the concept of cooking for the freezer (i.e.: Frozen Assets). Learn to buy in bulk, and take advantage of lower prices by planning your menus around the grocery sales flyers in the newspaper. Little expenses add up quickly if they're done on a regular basis. When you find the areas in your life where the money is draining out, plug up the holes! Live Within Your Means Vow to live within your means. Easier said than done -- but it can be done! The first step is establishing a budget. If you have problems keeping to a written budget, try the envelope system. Figure out how much money you need each month for the different categories of expenses (food, clothing, gasoline, bus fare, etc.) and place that amount of cash in separately labeled envelopes. You will have a concrete visual aid to show you exactly how much money you have left to spend in each category. And you will see clearly that borrowing money from another envelope leaves less money in that other category. The envelope system is great for people who tend to think that as long as there is a positive balance in the checkbook, they can keep on writing checks. Get Out of Debt Get out of debt, and stay out. In 1996 alone, there were over one million personal bankruptcies filed in the United States. The majority of these were the result of poorly managed consumer debt. - Does your installment debt (not including mortgages) total more than 20 percent of your income? - Have you taken cash advances on one credit card to pay the monthly payments on other cards or credit accounts? - Are you at your credit limits? - Are you receiving letters, phone calls, or notices from collection agencies? - Do you have difficulty imagining your life without credit? If you answered "yes" to even one of these questions, consider seeking advice from a financial planner. You could be on the way to severe financial difficulties, or even bankruptcy. Contact Consumer Credit Counseling Service for free financial advice and debt counseling. Call 1-800-388-CCCS for the office near you. Identify Priorities Identify personal priorities. No one can set your family's priorities for you. But if you don't take time to think them through, articulate them clearly and live them out, you'll find you have lived a life that is not a true reflection of your inner priorities. Clarify your personal definition of success and meaningfulness by writing out a brief mission statement for your life. Then evaluate every purchase and activity in light of your personal life mission. If having time for community involvement is an important priority, can you pare back the non-essential activities to allow room for volunteering and service? Watching evening television might be a relaxing pastime, but is it adding anything to your community's quality of life? If staying home with your children is a top priority, are you willing to do whatever it takes to make it happen? It's not a crime to shop at thrift stores for your family's wardrobe essentials. And your children won't hate you if you don't take them to Hawaii every year (these are extreme examples, but I think you get the point). A Support Network Establish a support network of friends in similar financial circumstances. If money is tight, every decision can become a financial one. It helps to have friends who understand personally the difficulties you face, and can offer support for the choices you're making. Resources Tap into the many resources available for simple living. There are newsletters, books, web-sites, and even local study groups that can inspire you and offer practical ideas for living within your means. WHAT IT TAKES It doesn't take a salary the size of Bill Gates' to live on one income. But it does take careful planning, focused priorities and a non-negotiable commitment to stay out of debt. There are sacrifices involved, but if your heart's desire is to be home with your children, the rewards of staying true to your convictions will far out-weigh any losses you might experience. Our family faced these decisions nearly ten years ago. We followed our hearts, and we'll never regret it. I drive my used, rusty station wagon with pride. Laugh if you must, but we don't make monthly car payments and our yearly license fees and insurance premiums are minimal. Driving used cars is just one of the many choices we've made that allow me to be home each day with our young children. SACRIFICES? Am I making sacrifices? Maybe. But for me, the real sacrifice would be giving up the joys I share each day with my three kids. Laughing together. Growing and learning side by side. Being available to others in need. Those are joys that I can never recapture if I miss this opportunity now. Carpe diem. Seize the day. By making a few not-so-difficult financial decisions, we have been able to reach our dream of living on one income in a two income world. If you share that dream, I believe you can make it happen, as well. It can be difficult, but the benefits of making it work are beyond belief! ABOUT THE AUTHOR: Deborah Taylor-Hough (free-lance writer, wife and mother of three) is the editor of the Simple Times and Bright-Kids email newsletters. She's also the author of the bestselling book, Frozen Assets: how to cook for a day and eat for a month , Frozen Assets Lite Easy , Mix and Match Recipes , Curriculum Yellow Pages and A Simple Choice: a practical guide for saving your time, money and sanity Permission granted for use on DrLaura.com