If you are setting up your household budget, it could actually save you money to have one partner stay at home. Keep these considerations in mind when you are considering about becoming a one-income household.
Making ends meet can be tough – and if you are like most Americans you rely on two incomes. A two-income household seems like it should be more financially secure, but that is not always the case. Switching your household over to one income might be very tough in the beginning, but the long-term benefits are worth it.
Are you ready for benefits?
When there are two breadwinners in a household, it could be too easy to create a lifestyle that has to have both. Debts of all kinds can add up quickly. A family can end up in complete financial ruin if one or both partners lose their job. It doubles the chances of someone finding a job if both partners can look when someone loses their job. With one partner at home, it is significantly easier to cut expenses.
Where can we save some extra cash?
Cutting costs is less difficult to do with one partner at home. The loss in income can effortlessly be made up for with the use of extra free time. The partner that stays at home can contribute to savings by cutting coupons, shopping sales, and cooking from scratch. That partner can also take on at least part-time childcare, cutting a huge cost out of the household budget. The “hidden savings” may also add up quickly – such things as lower commuting costs and the ability to brown-bag lunches. It is also possible for the stay-at-home partner to do things that use to get hired out – like laundry and yard work.
How should we make a decision?
Moving from two incomes to one isn’t a decision to be made lightly. First, sit down and write two budgets – just one-income and a dual-income. Consider if one income is realistic for your family. If your family doesn’t yet have an emergency savings fund, build one up before you move to one income. Be sure to pay down debt so your household has to make as few payments as possible. Employable skills might also want to be maintained by the stay-at-home partner.
What benefits can we expect?
A very serious consideration should be the side benefits you could possibly lose. You may lose 401K, health insurance, or disability when you leave the job. Harvard University did a study that found over half of the bankruptcies filed in the U.S. are due to medical expenses. Keeping health insurance should you have it is very important.
Think about part-time?
If it does not seem possible to live on one income, consider having one partner work part-time. When a partner reduces hours, works from home, or participates in work-share programs, they can use free time and still bring in money. This is an especially great way if there are school aged kids in your house – one partner can work part-time while the kids are at school.
Steps to create the transition easily?
If both you and your partner have decided to live on one income, plan the transition carefully. Make use of the transition period to pay off debt and create a savings fund. Discuss the transition with your employers in addition. Stick to a schedule once you have set it.
You’ll be able to live on one income, and it can make you more financially stable in the process. While living on one income takes extra work, it can be worth it to you and your partner.
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