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No offense, but the idea of living off one income scares me. In this day and age, people are being laid off left and right, and having two incomes provides not only a higher income, but more stability. The key, however, is to act as though you only have one income while making two...if that is possible.
This is one of those topics that will just keep going and going with no ground gained either way.
We had dual incomes with no children, then after years of trying for children we had twins...wife was enjoying a great career and we were both putting away a good bit towards retirement. Once they were born all of this changed...she is on her fourth year of being a SAHM. We plan on her going back to work in another year.
For some reason we always lived below our means...mostly one income with the rest going for travel and the other going towards retirement. If we had lived based on both incomes in the sense of vehicles and homes we would be in really bad times now, there would be no way we could live on one income. We get along fine, Craigslist for the cribs, clothes, and toys has been one of the best things going along with yard sales. The one big thing is we have to save for things (never liked credit) such as appliances, repairs, or big ticket items where before we just paid cash.
Now I have friends who have children and both parents work, some of them are always complaining how they can not make ends meet, these same friends have bigger homes than they need (my opinion) and have debt out their butts. Their wife's salaries seem to pay for all the bells and whistles, motorcycles, new cars, stainless, and granite makeovers for their kitchens.
Everyone has their own idea of how to live the American dream and it is not for me to judge them for it, but we are in the midst of a terrific economic downturn that was brought on by a huge expansion based on credit. Larger homes, bigger SUV's and the like have brought many families to their knees.
A luxury once tasted soon becomes a necessity and Americans have an appetite for the best of everything. I hope our children will see the true meaning of what is truly important in life.
Great post. Make two incomes, but act as though you have one.
I am not talking about Minimum Wage Jobs, but if a spouse wants to stay at home and raise the kids, there should be no problem. You just downsize your housing (rent or mortgage), downsize your vehicle, entertainment, vacations. Many say it takes two incomes to get by today, BS, it only takes two incomes if you want to have the three bedroom, two bath, two car garage home in the subs, a boat or jet skis, along with the big Toyota SUV, 46 in Flat Screen TV with 3,500 channels, surround sound, high speed internet connection ($135 month or more), I phone, oh, and the daily Latte Frappe at Starbucks at $5.00 a pop.
Get it?
I personally don't think its this simple and surely not for everyone.
Downsize housing? We live in a 3-bedroom/2.5- bath house we bought last year. Our total mortgage is only $50 more than the 2-bedroom/2-bath apartment we rented prior to this. In order to downsize, we'd have to either go back to renting a 2 bedroom apartment in a more ghetto neighborhood (where my first out of college apartment was with Section 8 families and lots of loud, unruly people that I'd rather not raise a child in) or downsize to a 1 bedroom apartment. We got a foreclosure for 30% off the regular price and identical houses on our street rent for $600 more than our mortgage. In short, we have the cheapest mortgage for the nicest neighborhood we could comfortable afford (and under $1200).
Downsize vehicle? I drive a 12 year old Honda Accord with only 120,000 miles on it. I plan to drive it until it dees but even so, I need to be saving up for the down payment on the next car I plan to buy used in about (hopefully) 4-5 years. And I'd need at least $4,000 down to get a payment under $300 a month. I buy cars I can drive for 10+ years.
Downsize entertainment? Netflix costs about $15 a month and we spend more weekends playing on the computers and watching movies. Happy hours are cheap at maybe $15 - $20 biweekly. We rarely go out to nice restaurants (maybe once a month) and when we do, I spend less than $50.
Vacations? My last trip was a cruise in Feb 2011. Prior to that my wedding/honeymoon in Oct 2009. Are people taking vacations regularly? I know nothing of that. I rarely even take a personal day off (I have currently have no paid time off as I am a contractor).
subs? Just so happened I chose to live in an area with less crime and better school which is generally desirable when starting a family. I left a cheaper area where teens were partying and fighting in the streets at 3am which again is not desirable for family life.
a boat or jet skis, along with the big Toyota SUV, 46 in Flat Screen TV with 3,500 channels, surround sound Who the hell has any of this??? While I have 2 flat screen 30 inches (bought on sale) , I still own an TV with the big back on it that works just fine.
high speed internet connection ($135 month or more) - We pay about $70 for internet and we feel its a necessity for constant job searches, updating skills, networking and school.
I phone, oh, and the daily Latte Frappe at Starbucks at $5.00 a pop. - No iPhone and I don't buy coffee daily. I drink the free stuff offered on my job.
And we still need and depend on 2 incomes.
Why? Because we can't find jobs willing to pay enough to one of us so that one can carry the other. Its really that simple. Good paying, stable, long-term jobs are not available to all. But only some. For the rest, this is how we have to deal. Until one of us gets that lucky break. And we are still trying.
Great post. Make two incomes, but act as though you have one.
That's how my husband and I have always lived. Having financial security is much nicer than driving an expensive SUV or having 400 cable channels and a 60" wide screen.
Location: where people are either too stupid to leave or too stuck to move
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yea if you just want to live with what you need (or barely need) and nothing else..and i think it also think it depends on location.. someone in alabama might be able to do that, but nyc or san fran, no..
yea if you just want to live with what you need (or barely need) and nothing else..and i think it also think it depends on location.. someone in alabama might be able to do that, but nyc or san fran, no..
We lived in NJ in an area with a higher COL than NYC and managed. We set our priorities on our needs and a few modest wants. While our friends were driving expensive SUV's and buying 4000 s/f new homes, we drove a Saturn and a Dodge and lived in a "used" 1600 s/f condo with mismatched appliances in three different colors and ugly blue carpeting.
When we built our current home we didn't splurge on the $50K in kitchen upgrades that most of our neighbors did. I spent extra on a tip out under the sink for the sponge and a pull out spice rack. Oh, and a Lazy-Susan in a large corner cabinet. I think it totaled about $300 in kitchen upgrades. We put our upgrade money into making the house energy efficient and more cost effective to maintain instead of "fancy."
Considering the fact that a house from the 1950's, much less a modern one, will cost more than most people can afford on a single income, the concept proposed here - that the need for 2 incomes is basically "all in our head" - simply does not stand up to the facts. Median HOUSEHOLD income in the US is around $50,000. Median income for individuals is considerably less, which is what most people would be living on if they had only 1 income.
Even if you look at all homes, the median sales price is still around $188,800, which is still over 3.5 times the median HOUSEHOLD income, and thus unaffordable (unless you like to take risks):
This means that housing is still basically unaffordable to most people (despite having 2 incomes), and the only reason this problem hasn't grown really serious yet is because of the sheer number of older folks who bought their homes back when houses were affordable vs. salaries and because of the lingering effects of all the funny-money loans that disguised the real unaffordability of housing.
I could go on with a comparison between salary inflation and other key expenses, such as health care, education, energy, and so on, but I think my point stands - prices have increased FAR faster than wages, and even the median HOUSEHOLD income these days is not enough to really have money left over in many cases.
Sure, we should all avoid waste and such - nobody is saying otherwise, but to deny the problem is to deny the facts.
Last edited by Rambler123; 08-26-2012 at 11:04 AM..
Considering the fact that a house from the 1950's, much less a modern one, will cost more than most people can afford on a single income, the concept proposed here - that the need for 2 incomes is basically "all in our head" - simply does not stand up to the facts. Median HOUSEHOLD income in the US is around $50,000. Median income for individuals is considerably less, which is what most people would be living on if they had only 1 income.
My in-laws live in a house built in the 1950's. They have added extra insulation, upgraded the windows, added central a/c instead of window a/c units, etc. Their home is a 3/1 ranch, about 1000 s/f plus a partially finished basement (by father-in-law). It's worth about $70K. They will be looking to sell in a few years. The per capita income in their area is $34K. Give me one good reason that a single income family couldn't afford that house. Of course maybe not that house and two cars and all sorts of fancy toys. And many would poo-poo it because the rooms are small and horrors, there isn't a master bath.
While even if you look at all homes, the median sales price is still around $188,800, which is still over 3 times the median HOUSEHOLD income, and thus unaffordable (unless you like to take risks):
This means that housing is still basically unaffordable to most people (despite having 2 incomes), and the only reason this problem hasn't grown really serious yet is because of the sheer number of older folks who bought their homes back when houses were affordable vs. salaries and because of the lingering effects of all the funny-money loans that disguised the real unaffordability of housing.
I could go on with a comparison between salary inflation and other key expenses, such as health care, education, energy, and so on, but I think my point stands - prices have increased FAR faster than wages, and even the median HOUSEHOLD income these days is not enough to really have money left over in many cases.
Sure, we should all avoid waste and such - nobody is saying otherwise, but to deny the problem is to deny the facts.
Yet I have a number of friends who have bought their first home over the past couple of years. In one case the wife is a full time student. In another the husband works very p/t and makes $100 net on a good week. In another case the husband works p/t and goes to school full time. His income covers his tuition. And in the last they have two kids at home, the wife doesn't work, the husband is the sole breadwinner. So how are they buying homes? Easy. They live frugally, save their money, and bought a modest home.
Location: Stuck on the East Coast, hoping to head West
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All capable of working in my house, work (this includes the teens). In this age of layoffs, there is no way I'd put all my earnings eggs on the shoulders of one person. This isn't to say we don't have fun. We absolutely do. We tend to spend on experiences (like trips/lessons/sports, etc) as opposed to things (like expensive cars or a huge house). We live modestly and within our means and save like crazy. We also place a high priority on family time so this means we tend to gravitate towards jobs with lots of flexibility.
I'd never be ok putting all the pressure of taking care of our family on my husband's shoulders. No way, I love him too much for that.
Yet I have a number of friends who have bought their first home over the past couple of years. In one case the wife is a full time student. In another the husband works very p/t and makes $100 net on a good week. In another case the husband works p/t and goes to school full time. His income covers his tuition. And in the last they have two kids at home, the wife doesn't work, the husband is the sole breadwinner. So how are they buying homes? Easy. They live frugally, save their money, and bought a modest home.
I never said it can't be done, nor did I say that one should not live frugally, save their money, or buy a modest home.
The facts, however, indicate a serious affordability problem when comparing incomes and housing prices. Sure, one *could* save a huge pile of money and buy a place, or earn more money than average, etc. One could also work hard and get laid off anyway, or suffer all sorts of unpreventable expenses (medical, etc.) that can rapidly deplete one's savings.
Comparing median sales prices to median household incomes is the best data we have to work with since it looks at what people can actually afford across a huge number of people and houses. We all have stories about people who bought places despite having less income thanks to years of saving, just as we all have stories of people who saved their money and died poor anyway. The data, however, is impartial and smooths out individual stories.
Long story short, there is still an affordability problem, and that's assuming median HOUSEHOLD income, not individual incomes, which would be even smaller and would be what one would typically see if we're to simply assume 2 incomes are "not needed" as the OP claimed. The same affordability problems extend into healthcare, education, and so on, though the data is not as clear-cut and easy to interpret as the housing price data.
So, yes, living on 1 income can be done these days, and saving your money is good, but it is still a lot harder to live this way than it was years ago.
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