Financial Zip

More and more families are two-income families. Mom works as a bank specialist, dad is working 12 hours a day at an accounting job. It’s tireless and it seems that they never seem to get ahead no matter how hard they work.

For many families going from a two income family to one, especially if it is because one person loses there job, is a very unwelcome and unsettling event in their lives. But, for those that want to and have the dream of staying at home while the other spouse works is still a very attainable reality, and will take some planning and discipline to get it done. There is a process that if you follow will be able to eventually lead you to that beautiful day.

Plan For It

A few years ago when me and my wife had our first child, it was my wife that was making good money as a manager at very nice boutique. At that time we really wanted her to be at home with our daughter but it was not a financial reality, at that time. But we were committed to having my wife stay at home some time with in the next year and half. So we decided that is what we would do.

A few years later and another addition to the family, I was able to find an opportunity that allowed my wife to spend time with our children at home, and I found a career that helped us transition to a one income family.

Take a hard look at your finances most families cannot afford to just have one spouse quit there job right away. It has to be a transition. So go through and start making adjustments as soon as the change seems possible, not immediate, but possible. Some times it might take a couple of years to get ready but as long as you foresee it, begin to prepare.

Look at your finances.

If you are going to downsize you need to be meticulous in your accounting of where your money is. Find out where your assets are this would include assessing the equity in your home, cash value life insurance, any retirement funds and emergency funds. You want to be able to asses your liquidity. So if the change happens sooner than later you will at least know where you stand.

If you are going to a one income family 2 things are highly recommended. Payoff as much consumer debt off as possible (if not all of it) and have a good 3-6 months of cash socked away.

Also begin to scale back. The key here is to list out your fixed expenses, mortgage, car payments, etc… It is the variable expenses you need to cut back on. So look at your cell phone bill, how much you eat out, the amount of clothes you buy a month. Anything that can fluctuate cut back. This does not mean cut out, it just means be smart about what you spend.

Life always throws curve balls.

No matter what you do in life you can always count on those crappy little surprises that will send some into a financial tailspin. So when preparing to become a one income family realize you might have to do it sooner than later because of a pregnancy, failing health, what ever the case is don’t be surprised..

A good way to plan for these is to have something set aside in case that surprise you don’t want actually happens. The norm recently for a cash reserve is 3-6 months. However, with the down turn we have experienced recently it might be good to have 6-8 months.

Look for Opportunities

That curveball occurred to a friend of mine when she found out she was pregnant. She wanted to stay home but in order to keep the finances afloat she needed to go back to work. She was offered quite a bit to go back to the job she previously held. Her husband hopped of his career track after the baby was born and became Mr. Mom.

During the time he was home he began looking into real estate. He eventually got licensed and started doing it part time. He did hire a baby sitter and his business took off after he was licensed. Eventually his income grew to out pace his wife’s and it was at that time that they were able to become a one income family. She was able to stay home with the kids and everything has gone smoothly sense

Look to capitalize on business opportunities when they happen. Finding a business that you can do from home may provide you a good opportunity to start creating that extra income to begin the transition to a one income family.

Stay Focused

If you are going to get from point A to B it is important to know how to get there and the discipline needed. You will need to go over every bit of financial information you have with a fine tooth comb. What to save. What kinds of things that you need to cut back on. Know the number that you can afford to become a one income family.

It can be done and it is not impossible it takes a lot of work and taking advantage of opportunities that come your way.

Recap:

1. Plan it out. Put a specific day and year and amount you need to become a one income family.
2. Get your finances in order. Cut back where you need to and know where all you assets and liquid assets are as well as your liabilities. This will give you a jump of point to become a one income family.
3. Life’s curve balls. Know that life will throw you curve balls be as prepared as you can be by having something socked away.
4. Life’s opportunities. Look for those hidden opportunities they may give you the leverage you need to replace a spouses income.
5. Focus. Be focused and disciplined in carrying out your plan.