Living off of only one of your paychecks

[TheKayla]

I'm single so for me this means I'm living off of less than one of my paychecks, but for couples it could mean living off of only one spouse's paychecks. How many of you out there do this, or strive to do this?

While before I somehow struggled with money and had hardly any left over, now I've increased my car payment to take up my entire first paycheck of the month. I'm hardcore on my debt repayment where then I have about half of my second paycheck taken out for SL. Even though I'm living off of less money now, I've found a way too do it and it feels so awesome to see that car payment shoot down significantly each month! I used to have most of my first paycheck to towards my car loan, leaving about $200 left for me. However, I've found that money management is far easier (and I spend less on frivolous things) if I keep one of my entire paychecks completely 'off limits' for spending. I think it's made for more of a psychological difference to know I'll only have X amount at the end of the month to budget for the rest of the month. (plus random freelance income in my situation, but I don't place that into my budget)

Anyone else do anything similar? What were your experiences with it long-term?

[MonkeyMama]

Yes. We made it a point to absolutely never spend my spouse's income when we married. We had equal incomes, but expected him to be home with kids for the long run, so just banked his income. We didn't have any non-mortgage debt, so it just went to savings, investing, and paying down mortgage.

We only lived this way for 3 years. My spouse was laid off at that time. I had just gotten pregnant, but he was planning to work for another 9 months (or longer). SO his unemployment wasn't exactly planned. But was also a complete financial non-event because of the way we were saving his checks. So though this was not a "long-term" situation, the benefits were ENORMOUS. We had no debts, a reasonable mortgage, and tons of money in the bank. I will tell you that 99% of new parents I met were majorly stressed about money. We just never had ANY of that stress. It was *awesome*. (Many parents were doing okay on one income, but was still just a huge adjustment for them - I remember not really relating to anyone financially at that time. Well, I guess I never have. )

It's been slow going getting my income back to that "double household income level". I still make $20k less per year than our household did at the peak (11 years later). & I have two more mouths to feed. & our health insurance went up 1,000%. But, I am getting there. 50% of my paycheck does go to monthly bills and 50% goes to savings every month. This is not where we were before because a lot of that gets saved for property taxes and stuff just later in the year. My true savings rate is 25% net (long term savings/retirement). About 20% goes to non-monthly expenses. But, it still feels nice to bank 45% of my paycheck most months. (I just throw that 20% into savings until non-monthly bills come due).

I don't know if I Can improve on this much in the short run. Having a flexible job and more time has become more important with small kids. But it seems a pretty temporary stage in the grand scheme of things.

I think it's hard to go wrong with a "save 50%" goal. In the best case you build wealth very quickly. In the worst cases (life happens), you roll with the punches a lot easier.

[TheKayla]

Wow, that sounds awesome! I can't wait to get to the point where I can begin saving or investing an entire paycheck as well, instead of it going towards debt! That's so awesome that you did it for years. Looks like it worked incredibly well for you!

Sounds like you're still also doing great even though you're not to that point anymore, but still saving a ton. I bet you're way ahead financially in life regardless because of your past decision to live so cheaply and save so much. And look what happened, life happened unexpectedly and you seemed to pull free with ease and very little stress. I've found that I have a significant lack of stress now that I just know I truly am giving 100% effort to debt repayment, my principle is going down much faster, and that those habits will continue after I've paid off my debt.

[hamchan]

I wish. My husband is almost just working to pay for his health care at this point.

[MonkeyMama]

I bet you're way ahead financially in life regardless because of your past decision to live so cheaply and save so much. And look what happened, life happened unexpectedly and you seemed to pull free with ease and very little stress. I've found that I have a significant lack of stress now that I just know I truly am giving 100% effort to debt repayment, my principle is going down much faster, and that those habits will continue after I've paid off my debt.

It will be awesome when you can divert that 50% to building wealth. !! Maybe even more rewarding?

Interestingly, I am not sure if saving 50% income was the most substantial thing we did towards financial comfort. We did a few other things. My spouse saved up tons of money age 15-23 by working (his college and support was paid for, so he just worked and saved most his income. Frankly, all he knows is saving most his income). We also moved to a lower cost of living area, which substantially improved our lifestyle while cutting our costs. But the theme of all these choices is certainly "the advantage of living below one's means."

[kork13]

That is certainly my goal, though I'm not married yet. Living off of one income is a huge benefit to your wealth building, and in the event of a job loss, your expenses are already low enough to be covered by the single remaining income. As it stands right now, I've been saving about 30%-35% of my solo income, so when I eventually get married next year, we should hopefully be able to save at least that much together, or more. Saving aggressively (like up toward the 50% savings rate) definitely requires buy-in from both of you though. If it's a priority for you both, then you're far more likely to find success than if only one of you is pulling the other along unwillingly.

[Blessed]

We live off my husband's paycheck for the most part. My pay check is generally saved or for big things like the trip earlier this year. I generally work 10 hours a week so it is not like saving a full time income but it is $10k to $12k yearly extra. We do most of our investing out of hubby income. We have a tight budget with our goals regardless of being debt free. I have to remind myself when I get crabby it is worth it in the big picture.

[Augustine]

I can't wait to get to the point where I can begin saving or investing an entire paycheck as well, instead of it going towards debt!

You sound very determined and I am sure you will get there a lot sooner than you think. I know the pain of having almost all your money going towards paying off debt.

The strange thing with money is that you adjust to fit your expenses into how much you earn if your income suddenly dropped.

Living off only one spouse's paycheck can be done if both parties have congruent financial goals (although this is not always the case).

The discipline itself can actually insulate you from financial disaster in the event that one partner suddenly loses their income.

[feh]

My wife and I never did the mental accounting of "living off one paycheck". I simply never looked at things that way; you earn what you earn, you spend what you need to, and you save the rest. So, when she stopped working to stay home with our son, our approach did not change, even though we became a one paycheck family.

She has now returned to work, and our attitude remains the same. It just means we have more money to save for retirement.

[BuckyBadger]

My wife and I never did the mental accounting of "living off one paycheck". I simply never looked at things that way; you earn what you earn, you spend what you need to, and you save the rest.

I flip this. Step one is SAVE what you need, and step 2 is spend the rest.

Assuming you aren't living so close to the edge that this is impossible, saving *first* makes it a lot easier. It's like that money doesn't even exist. I think that if you spend what you "need" and then save the rest it's really easy to find that "what you need" category slowly growing.

[feh]

I flip this. Step one is SAVE what you need, and step 2 is spend the rest.

Assuming you aren't living so close to the edge that this is impossible, saving *first* makes it a lot easier. It's like that money doesn't even exist. I think that if you spend what you "need" and then save the rest it's really easy to find that "what you need" category slowly growing.

For some (most?) people this is necessary. For us, it isn't. We are naturally frugal; we don't spend unnecessarily, so the order in which things are done does not matter.

Our 401K contributions have always been maxed and taken out of our paychecks, but that's for convenience, not because we need to hide the money from ourselves.

[disneysteve]

I'm single so for me this means I'm living off of less than one of my paychecks, but for couples it could mean living off of only one spouse's paychecks. How many of you out there do this, or strive to do this?

Absolutely. My wife was a SAHM for the first 10 years of DD's life so we knew we didn't need her income. When she went back to work, we put most of her money into savings as a result. At her last job, we signed her up for the 401k and tried to contribute 100%. They wouldn't let us so we did 50% which was the maximum. The remainder got taxed, of course, so she only brought home about a third of her gross. And we fully fund a Roth for her which was more than what she was bringing home.

[thomasdan]

my wife and I both work, she makes 60,000 and i make 47,000 without overtime. Everything she makes goes into savings and we live of my biweekly paychecks. At first we thought it was impossible but the key to making it work is coming up with a BUDGET and living within your means*( saying NO to friends that always wanting to go out) And let me tell you, its actually not as difficult as you think if both is on the same page and have the same goals. In one year, we paid of 45,000 in debt with this plan and still got to travel to see family*(it did help staying at there house instead of hotel)

[corn18]

Thanks to this forum, this is now my goal. Before, my goal was to spend all the money, even the money I didn't have. Just the little mindset change of making it my goal to live off my salary and save my military pension has provided the clarity and focus required to get us back on track. Wish I would have started 20 years ago.

[HappySaver]

When we bought our first home we had just relocated and I wasn't working. Long term this helped us out because we bought only (actually, less than) what we could afford with my husband's salary.

Shortly after that I found work, and that paycheck has always gone into some form of savings (a combination of savings accounts and paying down the mortgage early).

Granted, I earn a lot less than my husband does. We couldn't do it in reverse.