Getting unstuck: Single-income survival

Factoring in cooking, cleaning, chauffeuring and child rearing, a stay-at-home mom is worth $117,000 a year in unpaid wages. That’s according to a 2008 report from Salary.com, a Waltham, Mass., compensation consulting company.



It’s an impressive figure, but theoretical salary doesn’t pay the bills. The Columbian recently asked readers to share the biggest challenges facing them in today’s tough economy. Among the 75 or so responses we received, a recurring theme was parents wanting to be home with their children, but unsure how to get by on a single income.

Tiffany and Rusty Couch of Salmon Creek are proof that it can be done, although not without sacrifice.

The Couches never felt comfortable putting their boys in child care, but didn’t think they could survive on one salary. Even with two incomes, they racked up debt on new cars, clothes and dinners out.
But the spending came to a halt about four years ago, when Rusty, who had been working on the production line at a dairy processing plant, was injured in a car accident and couldn’t work for six months. The Couch family, who were hubbed in central California at the time, had no choice but to try and live off Tiffany’s pay as a certified public accountant.

Despite some challenges, they succeeded. So much so that after Rusty recovered, the Couches resolved to make job and lifestyle changes that enabled them to continue the arrangement. They wanted one stay-at-home parent, and it made sense that Tiffany would be the breadwinner because her career track had greater earning potential. To make it work, they moved to the Northwest, where housing was more affordable, and Tiffany started her own forensic accounting company, Acuity Group.

With Rusty at home they eliminate day care costs and save on income taxes because they’re now in a lower tax bracket. The intangible benefits are even greater. Both say the family has grown closer, and that 4-year-old Thomas and 7-year-old Jacob are happier, healthier and better behaved.

Rusty does the cooking, cleaning, grocery shopping and ferrying the children to and from school and swim lessons. Tiffany works from home, which trims some expenses such as commuting and office overhead. She leaves managing the household mainly to Rusty, though, since her job requires uninterrupted concentration and fairly frequent travel.

Things are going well now, but creating this life hasn’t always been easy, financially or emotionally.

Being a stay-at-home dad is “the toughest job I’ve ever had, but it’s the most rewarding at the same time,” said Rusty, 33.

The trade-offs are worth it to Tiffany as well.

“Having dinner together every night is more important than having the latest toys,” added Tiffany, 33.

The Couches believe that living on one income is within the reach of many families, provided they are willing to be disciplined about spending. Here are some of their tips.

Choose your home wisely. Moving from California to Vancouver, where housing is more affordable, played a crucial role in surviving on a single income, the Couches said. They sold their California home just when the market was exploding. This enabled them to pay off their credit card debt.

When house hunting in Clark County, they chose a property where they could afford to make a 20 percent down payment. This saves them several hundred dollars a month in private mortgage insurance, Rusty said.

Also, they made quality schools a top priority when deciding where to live. In California, they wouldn’t have felt comfortable putting the boys in public schools. Moving somewhere with a good school system saves the family $5,000 to $7,000 a year in private tuition, the Couches said.

Simplify. When Rusty worked outside the home, he and Tiffany owned a new Audi sedan and Dodge Durango. After his accident, they sold those vehicles and used the money to pay cash for older models. They eliminated $700 to $800 a month in car payments, and their auto insurance is less expensive, Rusty said.

The Couches also save money by sticking to basic cable TV, making meals at home and enjoying free fun, including bike rides and trips to the park, rather than renting movies or going to the cinema.

They buy each child four presents at Christmas, since they know grandparents and other relatives love to spoil the boys. They don’t throw big, expensive birthday parties for Jacob and Thomas; they host guests at home, and Tiffany usually makes the cake.

“It’s all about living within your means and not caring whether you’re keeping up with your friends and neighbors,” she said.

To help shore up their budget, the Couches made a list of what they were spending, then found less-expensive alternatives. For example, Tiffany gave up her gym membership and bought a used treadmill online. Rusty used to spend $4 at Starbucks several times a week. They got a coffee maker and grinder and now he makes his own at home.

Make a budget and pay cash. Each week Rusty withdraws a set amount of cash, and that’s what he uses to pay for gas, food, cleaning supplies and all other household essentials. He plans a week’s worth of meals and makes one trip to the store, shopping at discount and bulk grocers such as WinCo, Costco and Wal-Mart.

Paying with cash, rather than debit or credit card, keeps spending in check.

“You can hold it in your hand and look at it and know exactly what you have and what you can and cannot spend,” Rusty said.

If there’s money left over at the end of the week, they use it to take the family out to dinner or a movie.

Be at peace with your choice. It took about a year and a half for Tiffany and Rusty to feel comfortable with their reversed gender roles. Once they were at ease, it didn’t matter what other people thought, they said.

Still, it was hard in the beginning. Tiffany felt jealous of all the time Rusty got to spend with the children, and was critical of how he managed the house.

She eventually learned to appreciate all Rusty did. She realized that seeing the kids playing happily with their dad, instead of a baby sitter, was more important than having the kitchen cleaned exactly how she would have done it.

Rusty helped her feel more included in their children’s lives by taking digital pictures of activities they did during the day. He e-mails the photos to her while she’s working. This helps assuage Tiffany’s fears of missing out on milestones in Thomas’ and Jacob’s lives.

Tiffany wasn’t the only one struggling at first. Rusty faced challenges as well. He had to learn to shrug off the raised eyebrows being a stay-at-home dad can elicit.

“You’ll get a lot of looks from people like ‘Oh, that’s all you do? What about taking care of your family?’ ” Rusty said.

But he and Tiffany know that’s exactly what he’s doing.

“I’m doing what I know is best for my kids and my family,” he said.

Tips from a pro

To get by on one income, families need to look at cutting expenses, as well as finding creative ways to supplement cash flow, said Manisha Thakor, a Houston, Texas-based chartered financial analyst and co-author of “On My Own Two Feet: A Modern Girl’s Guide to Personal Finance.” Thakor, who holds a master’s degree in business administration from Harvard Business School, offers the following suggestions on ways to be a stay-at-home mom or dad and keep in the black.

* Work from home. Choose something that doesn’t require much overhead, Thakor suggests. Craigslist.org and monster.com list want ads for clerical and bookkeeping help. These tasks can be performed from a home office on a flexible schedule built around the kids, Thakor said. Becoming a virtual assistant is another way to bring in extra income without working outside the home, Thakor said. Virtual assistants work remotely to plan events, send out mass mailings and perform other duties a traditional personal assistant might handle. Some programs such as AssistU (assistu.com) offer training for people interested in becoming virtual assistants. Training at AssistU starts at about $2,700, so virtual assisting would have to be a long-term plan to justify the initial investment, Thakor said.
* Re-examine spending. “Think of your income as a pie,” Thakor advises. You need a slice for “musts” such as housing, food, transportation and insurance; a slice for taxes; a piece for fun and a chunk for savings. These slices aren’t equal in proportion, however. Thakor suggests earmarking at least one-quarter of your income for taxes, 45 percent for essentials, 15 percent for savings and 15 percent for fun.
* If discretionary spending is eating up too much of your pie, then look for ways to cut back.
* Think about how badly you want something, and how long you’d have to work to earn it, Thakor said. For example, if your primary breadwinner’s job pays $20 an hour, is a $100 pair of shoes worth five hours of work? Is it worth about $40, or two hours of work, to take a family of four to an evening movie? Consider a matinee instead, or, even better, wait until the movie hits second-run theaters or comes out on DVD.
* Don’t confuse luxuries and necessities. “Our consumptive appetites have become supersized,” Thakor said. If having one parent stay at home is important, then there will need to be some sacrifices. Don’t compare how big your house is, how nice your car is or what expensive toys you give your kids to your neighbors. They’re probably a two-income household. And, odds are they’re living beyond their means, Thakor said.

— Mary Ann Albright