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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.
When Nicole and I first got together in 2010, we had a combined net worth of -$50,000. (Yes, that’s a negative symbol.) Lots of debt from Andy 🤦♂️
Here’s how we clawed our way into positive territory and beyond.https://t.co/rGwUisJtPR
— Andy Hill (@AndyHillMKM) February 16, 2018
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.
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.
The Life-Changing Benefits of Complete Debt Freedom https://t.co/I49TQiuk2o
— Andy Hill (@AndyHillMKM) March 23, 2018
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.
Finding Life Balance with the 50/20/30 Savings Rule https://t.co/wSDlovk7OM
— Andy Hill (@AndyHillMKM) March 22, 2018
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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