Do you currently live o two incomes? Could you imagine only living on one income? Perhaps one of you wants to stay home with your young children or maybe you’d like to go back to school. The decision to go from two incomes to one begins with a detailed look at your household finances. Carefully look through your numbers again and again to determine where you can cut back.
There are ways to cut back on your expenses, live on less or live differently from the way you are now. It’s not about how much money you earn but it’s about how you spend the money you do earn. How much do you spend and how much you keep will determine how successful you will be.
First of all look at where your money goes. This will not be an easy task but you will need to track your expenses for three months or so. Keep track of what you spend during the day, what payments are made and what they are for. Then organize your expenses into categories. Use a computer program like Quicken. This will help you organize and total your categories. Use your checkbook register as well. You want to come up with a monthly estimate of all your expenses. Your categories will include your mortgage, insurance, utilities, child care, payments for credit card loans or car loans, gas, groceries, clothing, medical, home and car maintenance, charity, savings and miscellaneous.
Once you have figured out your current budget you can determine how much of a cushion you have. The next steps are to determine whether your expenses are needs or likes and write that down next to each column. Figure out which expenses are work related and trim those first. For example if you will no longer need childcare eliminate that expense. Some likes that could be eliminated are health club memberships, extra cable channels, frequent eating out and fancy vacations. Think of fun ways to exercise at home, watch less TV and eat at home more often.
Now look at your needs category. This is a harder area to tackle but also an area with the largest saving potential. Would you be willing to trade your car in for lower car payments? If you have a fancy car maybe you could even sell it, pay off the car loan and buy an inexpensive second hand car. Can you refinance your mortgage? Saving on groceries is another great area. If one parent is at home they might be willing to shop the sales and cook from scratch. Reduce your utilities by using the dryer less, adjust your thermostat and reduce cell phone services.
Continue going over your budget and your numbers until you are confident your family could survive and even thrive on one income. Having one parent at home can help create a cohesive family lifestyle in the midst of todays rushed and media distracted lifestyles. If this is your dream, work hard on your budget worksheet to make it happen. It will be worth it.
Nancy on the Home Front 