Do you NEED 2 incomes?

[disneysteve]

No we don't need two incomes. BUT it is nice. And it gets us to our savings goals faster.

That's our situation. My wife has 50% of her gross go into her 401k. We actually wanted to do 100% but the max allowed was 50%. What ends up coming home after taxes goes to savings, too.

Today's time is also different compared to 15-20 years ago. It is common for women to go to college, have careers, and purchase their own starter home and the like.

Just to be clear, I am not suggesting that we go back to the 1950s with mom at home baking pies and having dad's pipe and slippers ready when he walks through the door. I'm asking purely from a financial perspective about the need for the 2nd income.

Many women want to work and greatly enjoy what they do. Others, like my wife, have a good education and college degree but would be happiest staying home with the kids and running the household. My wife would prefer not to work at all but recognizes the benefit to even part-time work as far as retirement savings is concerned. Both her current job and her previous job kind of fell into her lap. She wasn't looking for work or planning to go back to work either time but perfect opportunities presented themselves. I told her it was an omen that she should be working.

[zakity]

We are a one income family. It is possible, not easy, but possible. Frugality is a major roll in my being able to stay home and homeschool the boys.

[Scanner]

Even if I was pulling in $150,000/year. . .I would need my wife at her job for the health insurance. If I go out and purchase my own policy for the family, it is 2-5X more expensive than if you buy an individual plan.

Always remember, the self-employed view the world much differently than you gainfully employed folks.

[hakuna matata]

We don't need the income 'now' but it is for our future. We both make very good money and each easily put away half of our income in our retirement funds. So for now we could easily live off one income if need be, since we live well below what we make.

We also carry zero debt, no car payments, house will be paid off before we retire, we will have our daughter's college paid for within the next couple of years and we plan on retiring by 55. Our daughter just turned 13--so we have 7 more years before we pull the early retirement plug

But by both of us working now we can put the power of compounding to work for our future. I think that is one of the big advantages of both people working--you both get to retire early! If my wife didn't work now, we (read: me) wouldn't be able to retire until I was 65.

So in my opinion if you are both working and working for the 'right' reasons it makes sense. To both work so you can afford day care--not such a good reason, or to pay for an extravagent lifestyle, again, not such a good reason if you ask me. But if you can live way below your means and put that money away (and if doesn't cause undue stress in your life for both spouses to work--a very important factor!) then it makes sense for the dual income.

Thus my long winded response to your question--yes you can live off one income. The bigger question is does that make sense due to the savings and compounding income loss?

[PrincessPerky]

Since I don't have two incomes I obviously don't need em

And no my husband doesn't make loads of money.

As to how I tolerate staying home...if I worked for pay I would be a teacher, surrounded by kids...staying home lets me sleep in and then do the same

[ktmarvels]

DH and I are living off of his income. I'm in school, but even after I graduate and get a job, we're still planning on living off of his income. I should be making nearly twice as much as him, but we're still going to plan on living off his income and putting mine towards retirement, savings, and of course my student loans.

[tripods68]

I have always believed you should live on one income. If it means living in less house, car, whatever. We live off my income and invest hers.(Saving for cars included in hers)

I tend to you agree. However, that beliefs often is not the reality of today. If you take into account the high food and enery costs, skyrocketting health insurance, wages unable to keep up with Inflation, yearly increases cost of college education, and the dollar losing its value puts any sole breadwinners of any family behind 8 ball to start with.

How about if you have 2 or more kids to support? Perhaps, supporting your parents in some financially, like my wife do with her parents? Any type emergency alone would eat your savings up especially big item ticket like a mechanical breakdown, new roof, new washer or dryer. Those are impossible expenses to overcome by a single earner alone, and not use some sort of credits for warranted family emergency is very difficult. How about paying taxes and the state you live in, let alone trying to fully fund your retirement account. And we wonder, why we Americans in so much debt.

We don't know anyone personally married couples either our friends, distant family, acquintances or coworkers whom chose to live in one income. Ok maybe we know few some personally but their not married with kids to support It's also a trying time in our economy outlook with job uncertainty. Don't get me wrong, I like the idea of one sole breadwinner. But in todays reality, its very difficult to hang on that beliefs. But hey, more power to you.

[bjl584]

I just got a part time job, so I have two incomes. Do I need two incomes? No. But, having two will definitely help with daily living expenses allowing me to pay down bebt and save and invest much faster than I could with only one income.

[feh]

As you said Steve, whether a 2nd income is needed depends largely on the size of the first one. I don't think this is a simple yes/no question.

But I can't help comparing life today to what it was like in the 70s (I was born in the 60s, so I can't go back further than that). I grew up in a small midwest town. Very middle class, although almost 100% white. Kids riding bikes down Main Street...ball games in the park...snowball fights in the winter. Very Norman Rockwell-ish.

The houses were modest, and just about all were traditional families. Virtually all the fathers worked full time and the mothers stayed at home and raised the kids. My family was the same way. But, here's the thing - my Dad worked a blue collar job; he didn't have a college education. He made an average salary. Even so, his salary fed and clothed two kids, bought a house (which was paid off in 5 years), and we still had money left over for fun (he rode a motorcycle, we had a speed boat, etc).

I don't think that would be possible today. It's not impossible to raise a family on one average salary, but it is definitely more difficult, IMO.

[PrincessPerky]

I tend to you agree. However, that beliefs often is not the reality of today.
We don't know anyone personally married couples either our friends, distant family, acquintances or coworkers whom chose to live in one income. Ok maybe we know few some personally but their not married with kids to support It's also a trying time in our economy outlook with job uncertainty. Don't get me wrong, I like the idea of one sole breadwinner. But in todays reality, its very difficult to hang on that beliefs. But hey, more power to you.

I have 4 kids...one income (husbands) we eat quite well and live just fine on his average income. I find it quite easy to live this way...least as easy as living period can be.

Sure there is a chance husband will lose his computer job (multiple times his job has been outsourced to India and he moved over to keep being paid) Sure something bad could happen, If it does, we will deal with it, God will provide a way out.

I suppose a bigger emergency fund, bigger retirement fund, ect might be nice, but not worth me losing all this time with the kids.

[LivingAlmostLarge]

Yep, sorry about that. I forget that a lot of people don't make a lot and I can definitely understand when 2 incomes is required if both people don't make very much. With the mean and median salaries $48k for a family of 4, I can see how it could be tough to survive.

[PrincessPerky]

The houses were modest, and just about all were traditional families. Virtually all the fathers worked full time and the mothers stayed at home and raised the kids. My family was the same way. But, here's the thing - my Dad worked a blue collar job; he didn't have a college education. He made an average salary. Even so, his salary fed and clothed two kids, bought a house (which was paid off in 5 years), and we still had money left over for fun (he rode a motorcycle, we had a speed boat, etc).

I don't think that would be possible today. It's not impossible to raise a family on one average salary, but it is definitely more difficult, IMO.

I think the trouble is you can't find to many modest houses, nor do folk buy things they finance them..so even though motorcycles do not cost that much more today, when you add in interest you have a huge chunk of each months pay going toward it. housing is a bit ridiculous today, but folk don't seem to be happy with any old house, it has to be a mcmansion.

Not to mention middle class family today HAS to have a ton of TVs video games,that are often bought on credit, cable or satalite, plus cell phone service, clothing and china out the wazoo, that is also often bought on credit......... if you look at what you actually had stuff wise, I bet you could easily live that way now but you would be considered poor. (or crazy, a boat not monthly cable? what could you be thinking!)

I grew up in the 80s, so I could be wrong.

[tripods68]

I have 4 kids...one income (husbands) we eat quite well and live just fine on his average income. I find it quite easy to live this way...least as easy as living period can be.

Sure there is a chance husband will lose his computer job (multiple times his job has been outsourced to India and he moved over to keep being paid) Sure something bad could happen, If it does, we will deal with it, God will provide a way out.

I suppose a bigger emergency fund, bigger retirement fund, ect might be nice, but not worth me losing all this time with the kids.

Congratulations and Kudos to you

Here' a scenario: What would happen if you been dealt with a real "family emergency". Perhaps a car accidents to you your husband and his unable to work for months or year, or maybe your kids involved in auto accidents with real expensive treatment to follow that stretches your family budget beyond net take home and savings. Your worker's compensation or your medical benefits aren't enough. Would that change your perspective? By working, you could have done something to prevent the unexpected cost? We all know the 70% of the family that files for personal bankruptcy cause mainly medical expenses. Would you feel guilty knowing those extra cost could have been prevented or at least lessen by YOU earning extra income, extra EF, or pick up medical benefits with lower deductible cost without draining the family asset?

[moneybags]

Here' a scenario: What would happen if you been dealt with a real "family emergency". Perhaps a car accidents to you your husband and his unable to work for months or year, or maybe your kids involved in auto accidents with real expensive treatment to follow that stretches your family budget beyond net take home and savings. Maybe worker's compensation or your medical benefits weren't enough. Would that change your perspective? By working, you could have done something to prevent the unexpected cost? We all know the 70% of the family that files for personal bankruptcy cause mainly medical expenses. Would you feel guilty knowing those extra cost could have been prevented or at least lessen by YOU earning extra income, extra EF, or pick up medical benefits with lower deductible cost without draining the family asset?

How many 2-income couples do you think have enough money saved up for your scenario?

[tripods68]

2 income husband/wife.