Do you NEED 2 incomes?

[MonkeyMama]

Correction MonkeyMama - SDI covers 55% of full year salary for government employees.

edited - correction below

[MonkeyMama]

By golly, they changed it to 55%.

I am pretty sure it was 65% in both 2003 & 2005. (I could be wrong, but that is what I remember when I took SDI benefits. Could just be the percentage I got personally since I had some higher quarters).

So now the maximum benefit is $917/week (on a $87k salary).

[PrincessPerky]

Seems the rest of the board has that what if pretty well covered, but I would like to add in my three cents.

1. I hate what if...I have no desire to sit down and play what if, I trust that reasonable precautions will suffice and cross all the bridges when I come to them. I have an EF, maybe not as beefy as some would like, I also have the ability to work, just cause I work free here doesn't mean I can't ever be paid. (at one time I held down three of them so I wouldn't need govt assistance)

2. if I got a job, who would watch the 4 kids? Now no I don't have to have kids, I like em as annoying as they sometimes are I had em for a reason. Paying for their care so I can get a job to cover a what if (that for most folk does not happen) goes against how I want to raise my kids. (I breast feed and home school, two items difficult -though not impossible, to do while working) you know that 70% of bankruptcy is claimed to medical events..do you know what percent of folk declare bankruptcy? I don't but I am willing to play the odds with only moderate savings.

3. should that what if happen, I would not feel one bit guilty about all the time I have sent with my children by not working. Not one day is a waste (frustrating yes, waste no) If I were to feel guilty after a major incident money wise it would be over eating out to often or buying a bigger car than really needed, not over not working.

Now if I had no kids..I'd be bored....though this doesn't mean I will get a job come empty nest...though I will most likely be spending time with kids still. might be volunteer

[MonkeyMama]

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.

The funny thing is I don't think of a car breakdown, a new roof, or a new washer/dryer as an "impossible expense to overcome." To me these are planned expenses. We do not use credit for anything but our mortgage. (& we have never borrowed any equity like most the people around here).

I suppose I am picking on you since you live in the same area as I.

Do you NEED to save 35% of your income to retirement, in addition to your pensions? Certainly sounds nice, but not a need for survival. Sounds like quite a luxury, to me.

[LivingAlmostLarge]

I think it's easier to make a decision to not work when there is a differential in earning power.

But when a couple each earns $45k and $45k, then going from $90k to $45k is a lot different than a couple earning $60k and $30k. Correct me if I'm wrong.

I've found more people struggling who have two equal incomes versus someone where one person earns the bulk of the money.

[MonkeyMama]

We went from $100k income to $50k when we dropped the second income.

I've actually seen it said often that going down to one income makes more sense when one income is small. But we found when both incomes were negligible ($50k in California is like $35k elsewhere) that the benefits were largely the same. When I read the articles about giving up a small income I find I agree with the logistics, giving up am equal income. Particularly since there is such a difference in taxes. A large chunk of the second income did go to taxes. Little of the first income goes to taxes so I was able to take home much more with the income drop.

It's obviously easier to go from $100k to $70k, say if my dh and I had different incomes.

With the tax savings it is like we went from $100k to $65k, honestly. Which makes it rather comparable to giving up one smaller income, probably.

($100k to $50k was a piece of cake because we never lived off the second income. Which is more to the point. How well you live below your means is really the key to financial stability).

[asmom]

Back in 1990 my husband and I were newlyweds. He was in the Army and I was still a college student and we lived on one income and I have to tell you, I hated it. He brought home about 1100 dollars a month. More than half of that went for rent for our one bedroom apartment. The bills were paid and we even had the money to go to the dollar movie occasionally so we didn't need a second income per se but for my own satisfaction we needed it. Even now I am unable to look back on those days with nothing but relief that it's over; I am not the type of person to romanticize struggle.

After I finished college and after I had our daughter, I worked for many years either very part-time or not at all (his income was much higher after he got out of the Army). By the way I hated being a SAHM, it's boring, it's hard work and overrated. It's only in the past 3-4 years that I have consistently worked full-time. Naturally our expenses have grown but I would be lying if I didn't admit that so has our standard of living.

We've got some really stupid debt right now so yes we do need two incomes but within the next 2-3 years that will be erased and technically we would be able to live on one income but I wouldn't want to. Not ever.

[maat55]

I'm also not trying to say that nobody should live on two incomes, or that nobody needs to. My point was just that I think a lot of people who feel they NEED two incomes probably don't. What has made both incomes a "necessity" is the lifestyle they've chosen to live.

If both spouses want to work and enjoy working, that's great. I know quite a few couples, though, who really wish mom could stay home with the kids but don't feel it is possible. When I speak to them and look around their house and see how they live, I understand why they feel that 2nd income is needed, but it really isn't. If having a stay-at-home parent was really a priority for them, they could easily adjust their lifestyles to make it just fine on one income. As we often say here, it all comes down to priorities and balance.

I think that when a couple keep their debt low and have a good EF, they are less at risk when they choose to live off two incomes. But the risk is higher than those who base their lifestyle on one income, obviously.

People want more and more and more and some want it before they are ready for it. Thus, many will base their lifestyles on two incomes. Some live in areas where it takes two incomes to live decent.

Living off two incomes, but being prepared for the possibility of one income isn't the worst thing you can do. Living on two and not being prepared for one is scary.

[tripods68]

Do you NEED to save 35% of your income to retirement, in addition to your pensions? Certainly sounds nice, but not a need for survival. Sounds like quite a luxury, to me.

Thank you for pointing out---how all different people can have different lifestyles than yours.

[Ima saver]

I worked until I was almost 50 full time. Since I usually had to work nights, my husband wanted me to quit and stay home with him at night. So I did. I did take on a part time day job for a few years. I do all my husband's bookwork as he is self employed. I really don't miss work at all!!

[tripods68]

I think that when a couple keep their debt low and have a good EF, they are less at risk when they choose to live off two incomes. But the risk is higher than those who base their lifestyle on one income, obviously.

People want more and more and more and some want it before they are ready for it. Thus, many will base their lifestyles on two incomes. Some live in areas where it takes two incomes to live decent.

Living off two incomes, but being prepared for the possibility of one income isn't the worst thing you can do. Living on two and not being prepared for one is scary.

I couldn't agree more.

[MonkeyMama]

Thank you for pointing out---how all different people can have different lifestyles than yours.

Yes, I wish you would realize the same.

(You have said in this thread multiple times that my lifestyle is impossible).

[tripods68]

Yes, I wish you would realize the same.

(You have said in this thread multiple times that my lifestyle is impossible).

touché

[tripods68]

Yes, I wish you would realize the same.

(You have said in this thread multiple times that my lifestyle is impossible).

Touché

[LittleGopher]

We lived many years on one income - I was home for 11 years with our four girls. My husband and I have never been too interested in luxury or amenities, so we did fine living on less (which wasn't a stretch from the way either of us had been raised - we never developed a taste for the expensive.) And it's not to say we wouldn't have welcomed more income, and some times were hairier than others, but overall, we learned as we went along and grew stronger from all of that 'real life experience'.

I don't know what would have been considered a national median income over those years (1990 - 2001) but I would think we'd have been a little lower than the median. Now, with two incomes (mine is on a school calendar schedule, so I'm fulltime equivalent, but not FT,) we seem to sit squarely median for our state and nationally (based on what I googled, which gave 2006 income levels.) We essentially keep on living on the one income, and have really used mine to increase our retirement investment and build up the EF, along with a slight expansion of our travel boundaries (we still camp, but now we do it more often both in and out of our state.)

It's worked for us, and there is nothing we'd do different. It helps that my husband and I (and the girls too) are all on the same page - living life fairly simple (well, as much as you can with four girls) and enjoying the same things (from the free and inexpensive, as well as our more recent luxury of travel.)