May 20, 2009, 5:00 am

Managing One Income Household

by: The Financial Blogger    Category: Uncategorized
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working-aloneThis has been a week since my wife quit her job to stay home. While the decision happened overnight and we didn’t think much about how we would compensate for the lack of money, we just decided to pursue this route. Sometimes, you are better off trying things… destiny makes the rest for you 😉

On day one, I had to do several changes:

Cutting down on my mortgage payment

As I said before, I had to put an end to my Smith Manoeuvre Strategy (at a really bad timing) in order to decrease my mortgage payment. My mortgage payment was divided into three parts:

1/3 for the interest

1/3 as a payment in capital

1/3 into my Smith Manoeuvre


For now, I have to drop my payment so I pay almost interest only. This is not sustainable over a long period of time but it should do it for now.

Cutting down into unnecessary expenses

We fired the cleaning lady which free-up $150 per month (but it is a pain to clean the house!) and the children will obviously stay at home with my wife. This will free up another $300 per month (yes, I am lucky to live in Québec as daycares don’t cost much!).

We will also drop our budget for gasoline while we recently increased our car payments (I just bought a SUV 2 weeks ago…). I asked for the penalty if I would give it back but it was way too much expensive (about 6K).

Looking for more money

This became my only responsibility! I am actually able to withdraw more money from our internet company than expected which is a really good news. I am also expecting an interesting raise at work since I am about to finish my MBA and I am one of the best performing financial planner downtown Montreal. I already ask for my raise and I should get my answer back in a few weeks. This should give us some rest.

The last part I can work on in order to increase my income is to boost my numbers at work so I can get a big fat bonus at the end of the year. So far, I am getting in the right direction to get a bonus that will pay for my RRSP contribution, pay for the capital I should have paid on my mortgage… and maybe go on vacation.

In the end, maybe that I only needed to get thrown away into this situation in order to make things ok financially with only one income!

image source: flickr

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Comments

My familly is on 1 low income with wife 2 kids.
We find it a challenge to save money. Like no cable
no long distance calling plan or call displays.
Always negotiating with banks like better rates or waving fees.

We lived on one income while wife stayed home with the kids for 10 years until the youngest started Grade 1. We knew when we got married she was going to stay home, so we lived on her income which was less than mine. Just one car, no money to save but it was the life we wanted. No cable, call display, etc but we didn’t need those things.

[…] will be living off of one income for a while, look at his take on […]

I think this is a great idea.
So many people have two-income families and they never get to see the kids.
It must be tough, though, with the cost of living and the standard that many people are used to.

[…] in May, I announced that my wife was quitting her job and we were starting to live on a single income. I didn’t win the lottery, no  promotion either. I actually dropped in revenue as I am now […]

[…] summer was a major turning point for many reasons. My wife quit her job back in May, we made a major site purchase in July and I had started a four day work schedule back […]