Living on a Single Income: How Your Family Can Do It

woman works in the kitchen - single incomeAny family can live on one income, and while I believe this to be true without exceptions, there are certainly situations where the lifestyle changes would be so objectionable as to keep many Americans from diving in. But for most, especially those with young children, a home in need of work or aspirations for food-not-lawns, it's a liberating and life-affirming choice. I, for one, would never want to go back to a two-income existence.

It's not easy, though -- meaning transitioning from double to single income is usually easy to do functionally and hard to do emotionally. When my husband and I fell in love in 2001, we were both working and nearly immediately jumped into family life. By the time our baby was seven months old, my cushy job with its middle-class income abruptly ended. Since then, we've taken turns carrying the burden of breadwinner; but we still suffer from the few years we were continuing to live as if we were bringing home two paychecks. The first thing everyone tells you is to make a budget. We did, of course: over and over and over. We didn't stick to it, though.

Through it all, I learned four lessons for successfully living on one income.Lesson One: Live on One Income
It's not the trite phrase it seems. Donna Freedman at MSN Money says this, too, in her article on the topic; one of her example families even began living on one income before they made the transition (it's obviously not always possible, especially if the transition is a surprise, a rush decision or a crisis). Many forward-thinking, expectant parents start living on one income as soon as they find out they're pregnant, or while they're trying to conceive.

But in the climate of the late 1990s and the past decade, it was seductively easy to live on phantom incomes -- future ones, perhaps, or the ghosts of incomes past. We did for about two years after I lost my job in 2003, continuing to use credit cards, keeping the luxury car on which I still had two years of payments due. We juggled until the situation was dire. In 2005, we canceled every last credit card (we're only now paying them off, one at a time), we stopped eating out except for rare special occasions, and in 2006, we stopped driving. Our minimum after-tax income required to avoid foreclosure notices, utility shut-offs or trips to the food bank was $5,000 in 2002; now it's $2,500.

Other families report similar difficulty making the emotional transition from two incomes to one. A neighbor whose first child is now a year old stopped working, but for occasional freelance work, late in her pregnancy. Heather Arndt Anderson tells me, "Going from a nice DINK lifestyle to a 30% cut in household income has been challenging. Number one lifestyle change? Buying bulk for almost everything."

Anderson goes on to lament the number-two lifestyle change -- not eating out. "
We spent hundreds, HUNDREDS! of dollars a month on restaurants before I had the baby. Just astounding," she writes. As an avid food blogger in a city with a very active and vibrant restaurant scene, staying away from bistros and noodle shops and charcuteries has been a struggle. She fills the gaps in her passions by gathering produce in parks and empty lots, canning her own fancy preserves and local-caught tuna, and writing about baking from scratch.

Lesson Two: Reduce or Eliminate Credit
This is really part and parcel of the emotional shift in Lesson One. But it's an easier rule to follow; it's concrete. If you live in a world in which credit is a valid option to pay for anything, you're really living on an income you don't have. Live like this is the only money you'll ever make. What do people without credit do when there's an emergency? They get creative.

When our dishwasher broke, for instance, we washed dishes by hand until my sister's boyfriend happened upon a free, hand-me-down dishwasher. I ended up liking it so much, I still wash the dishes by hand, saving power, right? When we couldn't pay the gas bill at the end of one winter, we found a community organization whose mission was to help struggling families with utilities. I was so grateful, I vowed to conserve gas and power by turning down the thermostat and other tricks, and donate a little to help other struggling families. When our expensive car's tires were worn and flat, we started riding bikes and taking the bus. Now it's a lifestyle choice I love.

Living without credit means forgoing many purchases for which you really can't afford to pay the whole cost upfront, such as airplane tickets for vacations (it's staycation time, or visit with nearby family members); electronics and new appliances on payment plans; even pricey monthly subscription plans for online gaming, premium channels, TIVO and the like.

Two of my younger sisters have had very similar changes in family income. My youngest sister's husband lost his job this summer, so they cut out cable and one of their cell phones. My middle sister's husband has had a hard time finding a job after finishing his degree, so he has been staying home with their two young daughters, saving on child care costs, and they give homemade candy and other DIY gifts for Christmas.

Lesson Three: If You Do Credit, Do it Right
A large percentage of those who have transitioned to single incomes do so because (or coincident with) one partner enrolling in college or graduate school. A Twitter friend who made this decision, Jenn Crowell, quipped that her "strategy" of grad school was "not fiscally recommended." When I asked her for more specifics -- what would she do differently, what did she do right? -- she had some fantastic advice: "Be VERY judicious in using financial aid money."

She went on to describe her process: "Make a budget of school-related expenses, and then ask for just that much aid. Don't ask for the maximum allowable loans unless necessary for child care or school expenses. It's tempting to use loans for living expenses or (worse) a slush fund -- just say no!" The lesson here can apply to many situations in which you'd take out loans -- a new business, for instance, or technical training. Live on your family's income. Pay for tuition and books and office space only with those loans.

And further, before signing up for that MFA or Masters in Social Work, ask yourself if the job prospects upon graduation will (honestly) pay more than your job prospects without the degree. There's something to be said for loving your job, but if you must love your job while living in debt for the rest of your life, it may lose its appeal over time. My middle sister's husband finally graduated from a master's program last year, even though he decided two-thirds of the way through that the job prospects at the end of the degree weren't for him. Now he's working on renovating their home as he uses up his forbearance; the pot of freedom at the end of the debt rainbow is, right now, a mirage.

Lesson Four: Live Your Own Life Without Comparisons
One of my favorite single-income Facebook friends, Annagrace Kaye, talks about how her changed lifestyle is just part of "all the other decisions we're all making in order to make our actions match our beliefs (driving less, shopping locally, etc.)"; hard at first, beautiful in the long-term. She finds that "it's pretty easy as long as I ... don't compare our vacations, acquisitions or material things to the supposed 'American Consumer Ideal.' When I compare our things, food, lifestyle to our true desires as a family, then it's actually pretty workable."

This lesson has been one of the best for me. I've looked on as family members or longtime friends have made financial decisions that, in my hard-fought wisdom, seem silly. One couple, for instance, spent more than $1,000 on birthday parties for their three children even as they agreed to finalize their divorce. Other families in their neighborhood were paying for bouncy castles, after all. My 8-year-old is always exclaiming how all his friends have expensive game machines; it's not fair! Simply looking at the neighborhood stats, I know that his classmates are mostly lower-income; I tell him that we're making our own decisions about how to spend our money and that's just not where I want to put it.

Where this comes hardest for me (other than the decidedly not-magazine-worthy state of my fixer-upper house) is trips to the blog conferences and shindigs that so many of my online friends seem to schedule four or five times a year. I just can't make it pencil out; even without buying new outfits for the events, each one would be more than $1,000, or my freelance income for an average month. I pick one every two or three years to attend and make it a family vacation and remind myself: My friends' lives are not the ones I've chosen. I dig in my garden and make a great meal in my own kitchen and remember how happy I am that I never have to wonder if that's my boss on the phone.
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