How do you afford for one parent to SAH? - Page 3

[Meg Murry.]

So, for those who stay home – do you have savings for retirement? Do you have a lot of credit card debt? I’m not saying that this is the only way to do it, but I don’t see other choices. If they’re out there, I’d love some enlightenment!

Yes to the first, no to the second.

I think that most of the problem with couples deciding to have one partner SAH is the fact that they've gotten accustomed to a two-income life and the various "necessities" that come with it.

For example...

Most of my 2-income friends have enormous houses, by my reckoning -- 3010 SF in the case of one couple with one child, and probably more than that in the case of my SIL & BIL and their 2-child family.

They also "need" to have two cars, et cetera.

We've always had one of us SAH, so we never "needed" to have two cars -- just one functioning one. We also never "needed" to have a large house, so ours is under 1,000 SF. Since we're HSing, we didn't "need" to buy in the ritzy neighborhood with the good schools, so our house wasn't all that expensive anyway and our mortgage payments are low.

Since we're HSing, we also didn't want to have cable, much less "need" that either, so that saves us a good $60-100 per month.

In short, I think that many people -- obviously not all -- could afford to SAH, but it would represent a significant downscaling of what they think they need to have. The other issue is that they might have to put up with the disdain (however subtly expressed) of their friends and family who have chosen a more extravagant lifestyle than you, plus criticisim (however subtly expressed) of the nonworking partner, particularly if the partner is male.

Most people aren't willing to do that. Most people aren't willing to look around at their house and say, "Do we really 'need' a house this big? Do we really 'need' two cars?" and so on. Or they'll find justification after justification for why they 'need' this kind of space and these kinds of things, and few of their arguments will really stand up to close scrutiny because the fact of the matter is that most people in the world don't need anything of that kind. They just don't want to retrench, that's all -- and although I might not seem sympathetic, I am. I'm glad we never *did* have a two-income life so that I don't have to get used to having less -- it would feel like deprivation under those circumstances, and it's really not.

It's a matter of choices, I think, at least for most of us most of the time.

[GoddessKristie]

I am still expecting, but I am a stay at home wife, and have always planned to be a stay at home mother. Here's the lowdown on us.
My husband does not make very much money. But, we are strict about our budget and I do my part by saving us money wherever I can.
Our budget is not a strict one, but it leaves almost $500/month for savings (that's seriously 1/4 of our monthly income). We make allowances in our budget for the fun things we like to do, and go as cheap as we can on the things we don't care as much about. This means lots of thrift store finds, yard sale finds, homemade food (from scratch -including pasta, anything I can make!-with products purchased in bulk at a wholesale club), eating out and movies out only twice a month, when we purchase our first home I'll be growing a LARGE garden, and freezing/canning food for winter. We still afford (expensive!) high speed internet, a dish, and 4 magazine subscriptions a year. Basically I created a budget that includes EVERYTHING we spend money on. We save monthly for Christmas and only spend the amount we've pre-determined on gifts, cards, wrapping (I use tissue paper for wrapping because it biodegrates so easily, looks soft and pretty, and now comes in lots of cute designs for cheap!), we squeeze everything into our Christmas budget (I don't think $400 is a skimpy Christmas budget-especially if you shop clearance, and plan ahead with sales throughout the year)
You can also have your local utility company come out and use a meter to determine if you have any electrical equiptment that is secretly adding to your load (for free!), and sometimes water companies will come out and install low-flow adapters to your faucets for free.
I also make my own laundry detergent from fels-naptha (if you google it you can find recipes) for .03/load instead of paying .09-.22 for store bought detergents.
You can find lots of great tips if you google frugal living or dollar stretcher. When it comes to money a little savings like that can really add up and go a long way.
Some other ways to save big:
we will cloth diaper and exclusively breast feed until 6 months at which time we will be doing homemade baby food (I'm already buying the stuff anyway!)
high effeciency washers and dryers save an amazing amount of water and electricity. DON'T let the salesman convince you that you need the $4,000 pair, though! You can find them pleanty big for under $1,000/pair, and the savings over time is well worth it.

My #1 money saver: www.freecycle.org
This is a world wide website of local groups who prefer to give their stuff away rather than throw it away. With baby on the way we have recieved a crib, bath tub, humidifier, gilder rocker, swing, stroller, clothes, cloth diapers, etc, everything we need but a mattress for the crib. And ALL in terrific shape!
From what you indicated I see no reason why you couldn't stay at home if you work at it some more, and I'm really curious where that extra $800 is going!

[LEAW]

Well we're moving so I can stay home... just figured this out last night (all the gory details)... dh has been offered a "promotion" that essentially comes with a pay cut, since the cost of living here is SO much lower than it is there... our snug budget is going to get TIGHT and I'm going to pick up about 10 hrs of work from home to make ends meet, and we're moving 6 hrs from family (both of our families are here, great support network).

The option of staying means that in 2-3 years dh won't have a job, and there is no way he can get another job at a comparable salary here. He'd take a cut of 1/3 because he doesn't have a degree and got really lucky with his job not caring about that since he is very good at what he does... but the company got bought by a bigger company (which came with a buyout raise) and the new company has a minimum hiring requirement of a degree... so he's now "overpaid" per their standards and won't be getting any more raises until he gets a degree... yet staying here is career suicide, so we're moving... wish me luck, I feel stress...

[mamabain]

what i'm seeing in reading this thread is that some families prefer to save for retirement and college for kiddos over staying home. those who can afford to do both, the working partner makes over $70K a year and they don't live in CA or NYC.

for us, when we were DINKS (dual income no kids) we made about $55K and bought our house according to what we could afford on one income. our situation changed drastically when my dh went back to grad school and took a MUCH lower paying but also lower hours job. so we downsized houses to be able to afford it better. we are still racking up student loans but putting small amounts into retirement ($1K each). once dh is back at a higher paying job (august 2007) we'll see a financial counselor to see what we can do to pay off the student loans before our kids go to college.

so i stay home and our income has been less than $30K for the last 5 years. i live in indiana so COL is low. but we are extremely frugal, for the most part. i did the envelope budgeting for years until i got a real good feel for what we spend our money on. i probably need to go back to that since i feel us slipping again into spending more than we should. we don't have cable, cell phones, hardly eat out (1X month), shop at garage sales, thrift stores, handme downs mostly. we have two paid for cars, one a 1990 and one 1999. our biggest expenses are our mortgage and our food. i'm trying to buy organic only and few convenience foods. THAT is expensive.

we are choosing this because this is what we feel is important to us. our main priority is being home for our children. we'll let retirement take care of itself and i can work once the kids are older. we'll be homeschooling and i can't say that it isn't tempting to put the kids in school and just work so we can make up for lost time on retirement plans, but that just isn't where our priorities lie.

[frog]

Originally Posted by frog

About 28% of my gross income goes to housing costs. We don't have anything for savings right now on a regular basis, we have a little bit of credit card debt. We cut corners whereever possible, I pick up freelance work when I can, and turtle's started a SAH business.

I should amend this to say that I sock away the maximum (5%) in my retirement, and my employer matches it 100%.

[frog]

Originally Posted by mightymoo

I'm curious, when folks say their mortgage is a percentage of income are you counting pretax or post tax? Just doing a little math, our mortgage is 16% of our pretax income, but 29% of our posttax income.

I'm using my gross income--it's the formula lenders and realtors use to determine whether you can afford a particular property. I'm at the top end of "house committed," which is better than "house poor," but there's still no money for many extras.

[1growingsprout]

the only way we can afford for me to stay home is we own our house... DH and i were very fortunate and lucky to purchase our first home 8 years ago and watch the value sky rocket, when our family exploded last year we took the profits and purchased a much larger home and yard... and we still were able to pocket a great deal of the profits.
are monthly expenses are
DirectTv 55.00
Phone 35.00
Cell 30.00 (pay as you go for me)
water 100
electric 250.00
gas for the cars 250.00
groceries 2k (this includes all items paper food diapers cleaners etc, im working on being more coupon savvy again) this has grown exponetionally over the past 18 mos... im trying to get a handle on it
i can probably get it down to around 250/week with careful planning and stocking again

if we had a mortgage on an average property that mtg would be between 300-400k$....


for the first years of marriage dh and i both worked very diligently....

[Malva]

When I returned to work in January after staying home for close to a year with my now 18mo ds, we realized that we could afford for my dh to stop working if we didn't have a car. Otherwise, his paycheque would have been going towards the car and daycare. He used to earn about $1300 per month and daycare around here is close to $1000 per month for a 1yo child.

So now, we don't own a car. We live within walking distance to the downtown core of our city, all the museums, my workplace, our 7yo dd's excellent school, all the stores, shops and parks we want. And when we need a car, we borrow my mil's car.

We now live on my income only, $2100 per month after deductions, and most of it goes to housing and debt repayment.

We have very little savings (I do have an excellent pension plan through work) and very little extras but it's worth it to have him stay home and have a very relaxed lifestyle.

[velochic]

For us, yes we save for retirement (about 20%), and no we do not have debt except mortgage. We put a huge lump sum in a 529 for dd when she was born and we're letting that compound. We have an emergency fund and a rainy-day/travel fund. We also put our pocket change into a jar every evening and invest that for dd. (As an aside, don't ever underestimate pocket change... dd is only 4 and she has about $1500 already just from our pocket change. When she turns 18, we're going to give it all to her in a lump sum to do whatever she wants with it.)

How do we do it: even when we were a 2 -income family bringing down over $150K/year, we lived like we had one income. We're huge savers. If I went back to work, it would all just go to savings, and quite truthfully, we already save plenty. We're just not materialistic and we don't buy "things". We don't really care what the Joneses are doing and don't care to keep up. The other thing we do is that we buy quality big-ticket items one time and buy it for LIFE. If I can't live with it for the rest of my life, I won't buy it. That's pretty much how we do it.

For example, we needed a new bedroom suite. We shopped and found a European furniture store that had extremely high quality stuff. We found the bedroom suite that was one we could live with the rest of our lives, but we couldn't buy the whole suite without using credit or cashing in some of our investments (and this is NOT something you dip into EMERGENCY savings for!!) So we bought the bed and side tables first. They were quite expensive ($3000), but we bought when we had the money without taking any money from our investments, our savings or what we put toward savings. We will get the rest of the furniture one-by-one as we have the cash. It may take us a few years, even.

I think that most financial problems (and this doesn't matter if there is a SAHP or NOT) stem from people living beyond their means via credit, and not having the patience to WAIT until they can truly afford the item. (Or even worse, buying beyond their true means to show off or make people think they have more money.) When the bills come due, they don't have the money to pay them off. The hole gets deeper. They use credit to dig out, but they only dig in more. I really do believe that if people couldn't live on credit, there would be a lot of people with smaller homes, smaller cars, and a LOT less stress.

[mightymoo]

Originally Posted by velochic

I really do believe that if people couldn't live on credit, there would be a lot of people with smaller homes, smaller cars, and a LOT less stress.

I totally agree!

[srain]

We don't save. We have a significant emergency fund from when I was working, which we rarely touch. We also lived on nothing the first year we got maried to pay off my husband's student loans. I figure that we can take on college/ retirement expenses later, when scheduling in worktime will be easier. (Even if we decided to support our kids through a school that took an entire annual salary to pay for, I could work then, right?)

We also spend very little. Our general annual expenses right now:
$12,000 housing
1200 electric
2000 heating oil (ugh)
300 water
400 phone/ internet
3000 food/ grocery
1000 home maintenance
1000 car insurance and expenses (one car, paid for in cash)
500 other (school supplies, etc.)

That pretty much covers our base salary, but other money comes in occasionally that allows us a little more leeway.

[wildmonkeys]

Have been reading this thread with interest and had another thought for the OP. Do you have car payments? If so, could you trade in for a less expensive/older model? I am one who doesn't live in NYC or CA (but I do live in Washington, DC which is also very expensive) and my husband makes a bunch less than $70,000 and we are able to not just get by but save a fair amount. I think having no car payment is what distinguishes us from many other families who need two incomes. Also having cheap cars gives us the freedom to have less expensive car insurance...

Meg Murry's post was interesting to me because though we certainly have some friends who tell us they both "need" to work who have chosen much more expensive lifestyles than ours, I think that many of the families who have two fulltime incomes live very modest lifestyles and that this is one of those stereotypes that makes them feel bad when they are struggling to get by on two incomes. We are lucky to be doing well on one income, but everyone has a different resources. I would not sah ft if we didn't have good health care insurance or a safe neighborhood or the ability to meet our children's basic needs. I do understand what Meg Murry is getting at and I certainly agree that many families are stressed out working because they feel they need things they don't, but it doesn't sound like that is the source of the OPs financial constraints (I mean she said they don't flush the toliet!!! They are already trying pretty hard!)

Thanks for the interesting thoughts and reflections on how each of your families is able to make one income work or not.

Best,
BJ
Barney & Ben

[BetsyS]

I totally agree with some of the PP.

I have asked dh not to be self-employed at this time in our lives, because I don't want to go back to work for health insurance. Through his work, our insurance costs $30/month for family coverage. A huge self employed insurance premium would make the difference in me not working.

[GalateaDunkel]

Increase your income.

Have you looked into WAH possibilities?

Also, honestly....if both parents want one to stay home, the one who works needs to be proactive about raising his or her income. Whether through more education, just being more aggressive, moving for another job, whatever. Our income is 5X what it was three years ago because my (physically disabled, no college degree) dh decided that he was going to make it happen, and repeatedly refused to back down in the face of obstacles. But, the WOHP has to really want it. I have seen studies indicating that men whose wives stay home make more than those whose wives work - which may make you think duh, of course the ones who make more money can afford to have their wives SAH - but the interesting thing is, they controlled for age, level of education, what field they were working in, etc. Meaning they were comparing people who could be expected to make the same income.

But, it is very unpopular to suggest that income is a matter of anything other than sheer luck.

[~Megan~]

honestly, we don't really "afford" it but its a sacrifice we are willing to make.

[AuntLavender]

We live beaneath our means

I have been a SAHM for almost 9 years now. We buy used cars (the last one was a 97 Dodge van for $4690). We don't have cell phone bills, pay for tv, take expensive vacations, we shop at Goodwill for clothes, we eat at home most of the time.

My youngest is special needs and we homeschool so we have expenses!

You can make it happen! We live in FL where it's still relatively cheap to live (although housing is going up!).

[Llyra]

Originally Posted by mamao'two

honestly, we don't really "afford" it but its a sacrifice we are willing to make.

Yeah, that's kinda where we are, too. I drive a junky car and wear old clothes and do without almost everything that I want because it's important to me to be home with my kids.

We don't save, but we also have almost no debt. I pay $60 a month to pay off a student loan, and we did borrow $1000 when we moved to cover moving expenses, but I'll have that $1000 paid off my christmas, because I planned for it before i borrowed it. That was just good planning, though; I knew before i left work full-time that we'd never make it if we had debt, so I tried really hard to get and stay out of debt BEFORE I had my kids. Now, if we can't pay cash we just don't buy. Period. No exceptions.

It's a good point about healthcare costs, though. We're really fortunate that we pay almost nothing for healthcare- just the occasional copay. It limits our options in terms of alternative treatments and choice of practitioners, but we'd never manage otherwise. DH's union means we have healthcare, dental care, vision care, and a good prescription plan, and we pay nothing for it. That makes a HUGE difference.

[Mighty Jalapeno]

In traditional sexist fashion, Throkky stays at home while I work. However, I didn't stop at one job... I've picked up size job after side job, piled onto my 50+ hour a week job.

However, cost of living here is actually quite cheap, compared to a lot of places. If we lived in Vancouver, my current earnings would leave us practically destitute after bills, but in the sticks of Kamloops, we don't do that bad.

Not sure what I can say here, other than you need to look at extra ways to make money. Special skills? Knack for Word or Photoshop? Babysit?

[opally]

Originally Posted by mamao'two

honestly, we don't really "afford" it but its a sacrifice we are willing to make.

Same here, and it looks like I'm the rare one who will go ahead and say it - we have a ton of credit card debt because of it. An obscene amount. We live super frugally, but there are times when we just don't make ends meet. I do what I can to bring in income (working 2 mornings a week with kiddos along, I Ebay, etc.), but when we're short here and there, the plastic comes out. If there's anything really significant - $$ dental bills, a vehicle repair, etc., of course that's going to get plastic-ed as well.

We have some retirement savings, but not much. We have a decent amount of equity in our house that we could always fall back on if worse comes to worse.

I hate debt, but I understand the choices we have made come with a price, and I'm willing to accept it. The kids are only kids for a while - there will be plenty of time down the road for me to work fulltime, get rid of the debt, and pump up the savings. Right now though, I think the trade off in overall quality of life for my kids is totally worth the sacrifice of financial security.