Making a second income optional

How We Survived for 14 Years on One Income

by Celeste Leibowitz


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When I married my husband Bruce, he told me it was all right with him if I kept on working, and equally all right if I chose to stay home. I continued working until six weeks before our son was due.

Then we sat down and added all of our expenses up, and tallied them against Bruce's take-home pay. Surprise! We were $200 short each month.

As soon as we discovered this shortfall, we sprang into action. Our first move was to extend our co-op loan out to 30 years and reduce our interest rate. Now, I know some frugal readers will be groaning, and saying we were actually setting ourselves up to pay more in the long run. But, in fact, this allowed us to remain a one-income family for 14 years, and we paid off the loan in full when we inherited a little money. Even before that, we reduced the term of the loan by pre-paying on the principal as well as interest every month.

With the baby coming soon, we asked around and found a pediatrician willing to accept a flat fee of $600 to cover all office visits, except for vaccinations, prescriptions, and hospitalization. This was a great blessing for us, because our son developed an eye infection at three weeks of age, and then had pneumonia, which resulted in no less than 11 sick visits to the doctor! Even with insurance, our bills would have been astronomical.

To deal with everyday expenses, we worked out a detailed budgeting system. Using his take-home pay as the starting point, my husband allocated so much per month to a number of categories:

  • Co-op loan (paid off after less than 15 years)
  • Monthly maintenance (similar to rent)
  • Food and household needs
  • Clothing
  • Medical visits and supplies
  • Emergency funds
  • Transportation
  • Vacation
  • Gifts
  • Entertainment
  • Dry cleaning
  • Laundry
  • College fund for son
  • Utilities
  • Retirement
  • Insurance
  • Family allowance (weekly spending money)

As our son grew older, we added a new category called "Enrichment." This covered extracurricular activities, such as after-school classes, summer camp, and school supplies.

With these categories on his spreadsheet, Bruce could allocate specific amounts for each month. At the same time, we kept a running list posted on the refrigerator of all purchases within the various categories. Today, we have modified this, and now I send Bruce an email when I spend budgeted money. We don't record purchases from our individual allowances. That's our one bit of "mad money" to spend as we please.

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As we make purchases, Bruce reduces the amount of money in that category. We always know exactly where we stand.

The spreadsheet is useful in another way. Let's say one month we throw a party and it takes us $75 over the food budget. What can we do to stay in the black? We look at the other categories. Maybe last month no one had a birthday, or maybe there's some extra money sitting in the vacation fund. (We don't travel much.) We borrow from some of the categories that have a little excess. This keeps us on an even keel, and we balance out any major expenditures by spending a bit less in some other area.

Now that I am sometimes working, I contribute to the college fund and other sundries (such as that much-raided vacation fund!). We know, however, that whenever there is a dry spell and I am out of work for a time, we can survive just fine. We've practiced frugal living for 20 years and we can always tighten our belts when there's less cash around.

Updated August 2017


Take the Next Step:

  • Learn smart ways to raise your family on one-income in this two-income world. The Dollar Stretcher's Guide for One-Income Families will give you ideas for reducing expenses and making money from home.
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  • Find telecommuting and other great jobs such as part-time and freelance work at Flexjobs.com. Because life is flexible. Is your job?
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