Living On One Salary?
How Could I Ever Leave You?
When the baby is born and you hold him and look into his tiny face, one of the first thoughts that may go through your head is, "How could I ever leave you?" The desire to be home to raise your child is a very natural one, yet many women do not feel they would ever be able to do that. After all, you need two salaries to survive - or do you? More and more women and men are finding ways to make the dream of raising their children themselves, rather than having them reared by daycare and school, a reality. The methods used to allow for a parent to stay home in order to raise their child can be used by anybody who wants to lower their monthly income.
Let's Get Real
First, it is important to find out the actual cost of having both parents working in order to be able to determine how much is actually gained by the second income after work-related expenses are deducted. In order to arrive at this place, list all of the expenses which are related to work that you can think of, no matter how trivial they may seem. Things like child care - including full day care, after school care, summer camps, etc.; costs of transportation, all means (buses, trains, car pool, subway, parking and tolls) and include in that the cost of running the vehicle (gas, insurance, maintenance and repairs); clothing costs such as work clothes, shoes, stockings, dry cleaning; food costs - lunches, dinners, office parties, vending machines and snacks; professional fees, which include subscriptions, dues, fees, licenses, clubs; and convenience foods which may be expensive but you buy to save time. Take a total of all of these items, and any others you can think of, and subtract them from your monthly income, net of taxes. One hidden cost which often goes unnoticed but which can really take a chunk out of your second income is the Marriage Tax penalty which puts you into a higher tax bracket.
The Envelope Please...
So, now you've calculated all of the expenses - what is left over? Is that second income really contributing to your household or are you paying someone for a job? Is the real hourly rate you've calculated when all the work-related expenses are deduced worth working for? If you are relying on a small amount of money to make ends meet you are going to have to figure out how to meet the shortfall.
Once the fog is gone and you can clearly see how much your second income is really contributing to your family's finances, you can begin to find ways to cut expenses. The only way to do that is to be diligent about tracking all of your expenses so you can see where your money is going - you'll be surprised at how much money is spent in certain places.
Is It Really Worth It?
Determining how much, or how little, your second income is really contributing to your home you may discover that by cutting expenses enough to cover any shortfall will allow for one or the other of you to stay home with your child.