3. If My Husband Made as Much as Yours – Surviving on a Single Income Pt. 3


Welcome Back!

Two months ago, my mother passed away, and well, I wasn’t really up to writing about money.  On my birthday, a sweet friend, Valeh, thanked me for my blog.  She inspired me to get back into it, probably without realizing it.  My hope is that somehow my ideas, successes, and failures might help you along your journey.

If you’ve missed the first two posts, you can catch up with Part 1 and Part 2.

As promised, I’ll delve into how we ACTUALLY save money.  Real life examples.  Some may sound ridiculous or a bit crazy.  I don’t know.  It all seems to work for us.  And to reassure those who are worried like a previous commenter, I don’t suggest wearing your pajamas everywhere you go.  PJs are comfy, but that’s just not kosher these days.  So how exactly do we do it?  It’s the little things all put together!  And when I say little things, I mean some of them only account for a few bucks.  There are plenty of ways to cut costs and increase your income.  Just be realistic when you’re planning.  And you do have to plan.  Most of us can’t drop one income without a little planning.

I know, you’re dying to see if I’m going to give you actual numbers.  Will I post my budget and income?  Nope!  There are some great blogs that do, and I suggest you look at them if you’re serious about living on one income.  They are inspiring and realistic.  My personal favorite is The Peaceful Mom: Living on Less than $28,000 a Year.  So, if I love this blog that gives real data, why won’t I divulge?  There are two big ones.  First of all, I am BIG into privacy.  Frankly, it’s none of your business.  People judge.  And in American culture, you are judged by your money and possessions.  And I don’t want to be judged!  Not by people, at least.  But even more importantly, if I include salaries and budget amounts, you’re likely to tune out or excuse yourself.  Don’t look all innocent!  My first thought when reading The Peaceful Mom’s Blog was “I can’t match her housing budget.  I can’t do this.  This won’t work for me.”  Pathetic.  I mean, seriously.  I was willing to blow off an entire, EXCELLENT series because she pays less in rent than I do.  It’s easy to say that the whole thing won’t work because my mortgage is higher or I refuse to buy mac and cheese.  It is so much easier to say, “I can go on with my spending craziness because this lady is way different than me.  She makes less (or more), eats differently, and has cheaper utility rates, blah blah blah.”  My hope is that you take the ideas and concepts and apply them to your life and your situation.  As you change, along with your family, your life, your needs, and the economy, so will your finances.  But the concept of living on less can always be applied to most any situation if you choose to make the sacrifice.

And here we go!

Housing – Don’t overburden yourself. Repeat this over and over and over!  DON’T OVERBURDEN  YOURSELF!!!  Rent or buy, be careful and be sensible!

Rent or Buy?  Which is better?  Well, it depends.  Don’t assume that home values always go up.  The housing market isn’t great right now.  If you plan to move in just a few years, the closing costs and the cost of selling your home may make renting a better financial move.  Remember that values aren’t going up at the rate they were 10 years ago.  And they are still falling or stagnating in some areas.

Also, look at your credit seriously.  If it’s bad, you’ll end up with a higher interest rate, thus a higher monthly payment.  Avoid Adjustable Rate Mortgages.  At the end of the fixed rate period, the rate WILL go up.  Think about it.  The bank has the option of making less money, making the same money, or making more money.  Hmmmm, which would you choose?  Before you bash them for corporate greed, remember that they wouldn’t offer these mortgages if their customers weren’t greedy too.  People want to buy more than they can afford, so they go for the low introductory rates, ignoring the FACT that the rates will increase.  So if you can’t get a decent mortgage, WAIT!  Pay your bills on time, reduce your debt, increase your savings, and hold a steady job.  These steps will help rebuild your credit, and likely qualify you for better mortgage terms.

If you rent, negotiate with the landlord.  Listed rents are not set in stone.  If you find a place that has been on the market for a few months, the owner is LOSING money.  He’s still paying taxes, marketing, and upkeep while no rent is coming in.  Explain why you are the perfect tenant that he should be begging for.  We usually negotiated about $100-200 per month off our rent and got our security and pet deposits cut in half.  How?  We told the landlord that we were a family, so we wouldn’t be hosting wild parties and destroying the place.  We wouldn’t call him for stupid things like the toilet overflowing or the smoke alarm needing batteries.  We also told him we’d be there for several years.  Make-readies and marketing are big expenses for landlords.  We also did a few upgrades while renting.  One time, we installed a better kitchen faucet.  We gave the owner the old one (it was still working) so he could use it on another property.  We always let him know the things we fixed.  When it came time to renew our lease each year, he always kept us at the lower rent because we were never a hassle.  While we lived there he spent extra on our replacement fence to make sure our child’s bedroom window was enclosed in the backyard.  It pays to be good to your landlord.  And remember, stay in the same place as long as feasible.  Moving is expensive!  Movers, trucks, packing supplies, pizza, time off work, and DEPOSITS.  You really can endure that harvest gold wallpaper.  One day, you’ll look back and laugh at it.  Or so I’m told.

When you buy a home, you may be STUCK there for a long time.  Plenty of factors can keep you from easily selling your house.  Sales and prices drop, neighborhoods become less desirable, new construction creates selling hotspots.  You may need to stay close to your job or not have the funds for realtors and closing costs.  Interest rates may be too high when you need to sell.  So when you buy, expect to be in it for the long haul.  When it came to buying our home, we were blessed that my dad is a real estate investor.  I grew up learning how to calculate repairs and ARV (After Repair Value) and how to determine a safe offer price (so you don’t sink yourself).  After 6 months of making offers on houses, we decided to build instead.  We weren’t going to pay full price on a house that had a broken garage door, nasty carpet, or dead trees that had to be removed.  But sellers are emotionally attached to their homes and think everyone should love the flaws that give it “character.”  We found a house we liked, but it wasn’t in the area we wanted.  We found a subdivision that was starting out and had discounted lots.  So we called the builder of the home we liked and asked him to build it on a lot we picked.  This builder was not a custom builder (savings!).  Since the housing market was starting to slow, he agreed.  He didn’t normally build on lots, rather, he developed entire neighborhoods.  The builder we chose builds a solid house with few frills.  We were able to get more square footage by giving up custom paint and cabinets, granite counters, and plush carpet (with kids and pets, no carpet can survive anyway).  We also did some work ourselves.  The builder left bare concrete and we stained it ourselves.  We skipped the sprinkler system and only had sod laid in the front yard (required by deed restrictions).  Sprinkler systems can be a huge hassle over time.  We seeded grass in the back, a much cheaper option than sod.  With that savings, we were able to get a lower sales price, a more efficient A/C system, and upgrade a few appliances.  Because of this, we paid 30% less for our home per square foot than all the other homes in our neighborhood.  When the housing bubble burst and home values dropped, we weren’t upside down.  In fact, we could probably still sell it for a little more than we paid for it.  Not an easy feat in this market.  Saving on these things allowed us a larger house and lot without busting the budget.  We won’t be tempted to upgrade for a bigger house because we were able to buy bigger for less.

If you buy an existing home, try to do the repairs yourself.  Remember the “We Buy Ugly Houses” billboards?  Ugly houses are cheap houses.  A solid house that has nasty carpet, ugly paint, and a terrible yard can be diamond in the rough.  A little patience and a lot of elbow grease could save you thousands!  Do your research and don’t get in over your head.  Educate yourself!

Property Taxes – There is a myth that you need to let the property tax appraiser keep your home appraisal high to keep your value high.  It’s the opposite.  Your tax appraisal should reflect the market value of your home.  As in, what could you sell it for today? Just the way it is?  Likely, your appraisal is much higher than what you could sell it for as is.  Do your homework and fight your appraisal every year.  Some years you’ll lose.  But sometimes you’ll win a lower tax bill.  In fact, most people who protest their values, will see a reduction of a few thousand dollars.  What can lower your appraisal for tax purposes?  List out what’s wrong with your house and provide a repair estimate.  Give details as to why your house isn’t as good as the rest in the neighborhood.  Provide a list of nearby homes for sale that have a lower price per square foot.  Provide a list of rentals and foreclosures in your neighborhood.  Train tracks or apartments nearby?  That lowers your value.  Provide photos of overgrown yards and ugly houses in your neighborhood.  If you do sell your home, advertise that your tax appraisal is below market thus saving the new owner on their taxes!

This year we had our appraisal lowered nearly $25,000!  We finally noticed a discrepancy in the rating of the structure (the house).  This rating is supposed to represent the quality of construction.  The first odd thing we found out was that our rating was raised.  Our home was 5 years old and mysteriously improved in quality….with no renovations!  We also learned that the original rating was higher than all the other homes built by our builder.  We made an appointment for the county tax appraisers to come out to our home.  We pointed out all the ways our home was either standard for our builder or how it was less (no sprinklers, no sod in the back yard, etc).  We also pointed out how our home was less than those in our neighborhood (lower ceilings, no granite counters, no recessed lighting, etc.).  The Appraisal District agreed with us, lowered our rating, and lowered our appraisal.  We’re now much closer to a fair market value than ever.  It also means our tax bill will be lower.  And for those of you who just think we’re awful for lowering our taxes.  Just remember that the American Revolution was sparked by a protest of unfair taxation.  Appraising your home above market value to collect more taxes is unfair.  Plain and simple.

Be sure to check the details of your appraisal every year.  One year, we got our appraisal dropped by $60,000 because they added an extra 1,000 sq. ft to our house.  A simple mistake in the size of our home would have cost us a fortune in taxes.

Other ways to prove your case: mortgage documents, sales contract, appraisal and home inspections, suggested selling price from a local realtor, builder plans, flyers from similar houses for sale, tax appraisals from identical homes.  Be creative.  Be courageous.  It’s your money.

A final thing we’ve discovered in tax protesting is that the further you go, the better your results.  A phone call to the appraisal office may result in a $2,000 reduction.  A meeting with an appraiser might drop it $8,000.  Filing a formal protest and having appraisers out to your property may bring you a $25K markdown.  We’ve noticed our appraisal district makes great efforts to prevent you from going before the Appraisal Review Board.  This Board holds formal hearings.  My hunch is people see bigger reductions here since they try so hard to keep you from that final step.  We may get there one day.  If we do, I’ll be sure to tell you how it works out!

That’s all for this installment.  How do you save on housing costs?  I’d love to hear your ideas!

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2. If My Husband Made as Much as Yours – Surviving on a Single Income Pt. 2

 

Welcome back to part two of Surviving on a Single Income.


Just stumbling in here? Read Part 1.

Before you take the plunge, it is crucial to define a purpose.  Why exactly are you doing this?  It’s hard and exhausting work being at home with little ones.  It’s easy to lose your sense of identity when your life is suddenly defined by your husband’s job or your children’s milestones.  The tangible markers of success are gone.  As the cars age, and aren’t replaced, your neighbors and friends begin to realize you don’t have as much money as them.  And in American culture, that can be tough.

Let’s talk American culture a bit.  Why, you ask?  No matter how you look at it, choosing to be a two-parent, single-income family is counter-culture.  Going against the tide of modern culture can be empowering, but it can be draining.  Here’s the rub.  Americans have big houses, newer cars, matching stainless steel appliances, and fashionable clothes.  They also have college degrees, careers with titles, and company swag.  There is an emotional sacrifice when you leave behind the intellectual conversions and feelings of importance that come with a job.  Equally, there are poignant costs to giving up the material items like cars and multiple team sports for your kids.  Some days you’ll feel great about bucking the culture.  Other days it will seem like its sucking your soul away.

A purpose anchors you when you start to second guess your choices.  I have my eye on a $2200 refrigerator.  It’s pretty.  It has everything you could possibly want in a fridge.  LED lights.  Drawers galore.  A working icemaker!!!!  Trust me, every time I pull out the duct tape to “repair” my 18-year-old ugly beast, I think, “If I had a job, I could get a new one.”  And then the pity party starts.  And sometimes I even get a little mad or pouty.  At times like these (and trust me they come), I have to go back to my anchor, my purpose.  Why am I really doing this?

Everyone’s purpose for living on less will vary.  If you’re like our family, there will be multiple reasons, and they will morph over time.

Some purposes to consider:

  • Staying Home with Your Children – American culture is fairly accepting of mothers being home with their babies.  Dads, good luck.  I know fathers do it, but let’s be honest.  Dads will face much more scrutiny if they stay home.  Be prepared for it.  If it’s what your family needs, do it.  Just know that dads may face more opposition than moms.  What about older children?  American culture seems to expect both parents to work once children are school-aged.  In our family, we disagree.  Children face a whole new set of milestones once school starts, many of which will factor in to the adult they become.   You can read more about influencing your child  here.
  • Special Needs or Ill Child – Perhaps your child has a chronic illness that requires frequent doctor and therapist visits.  Juggling work with this type of demand can leave you feeling like a failure both at work and at home.  You may have a child that requires extra attention or recurrent parent meetings at school.  In these cases, it is often simpler for one parent to not work.  However, don’t discount the financial strain.  Both our children had medical needs that were financially draining and time consuming.
  • Living on Less – You may decide to reduce your income simply to force yourself to live frugally.  Reduce your footprint on the world.  Enjoy the simple life. Perhaps you have hobbies you want to pursue.  Also, don’t forget that both can work while only living on one income.  This is an excellent way to eliminate existing debt or save for a home or retirement.
  • Launch a Business – You may be ready to fire your boss and launch your own business.  When starting a new business, you can expect to not make any money, and maybe lose some, the first 3-5 years.  Living on a single income will be critical in the early years of your endeavor.
  • Aging Parents – I never thought this would be the case for us since we have young children.  However, cancer struck both our mothers.  My mother had no one to care for her except us.  For two years (and counting), we have been her caregivers.  Currently she’s in a nursing home, but there is still a time and financial commitment, though not as much as when she lived with us.  As your parents age, they will need help with yard work, cleaning, appointments.  They may eventually need your full time care.  We firmly believe the family is the first line of help.  Our culture has mistakenly moved away from adult children caring for parents.
  • Homeschooling – With more and more schools focusing on standardized tests while failing at educating our children, families are turning inward for education.  Most parents, with enough commitment and resources (curriculum, support groups, co-ops, etc.) can educate their children.
  • Hobbies/Giving Back – Maybe you are ready to pursue something for yourself.  Hobbies often are exchanged for the rat race of the career world.  Or perhaps you’re ready to volunteer at your local school, homeless shelter, or library.  Giving up an income to give back is a noble sacrifice.
  • Retirement – One day we’ll all be there.  With inflation, it’s not a bad idea to learn to live on less so that our retirement fund lasts us all the way through.  Who really wants to come out of retirement because they ran out of money?  And if you’re at retirement age, you know that the retirement check is less than the paycheck you’re accustomed to.

Some of these purposes will apply to you, or you may have a completely different reasoning for living on one income.  No matter.  The important thing is that you know WHY you are doing this.  Write it down and keep it in a safe place.  Decide what you will tell family and friends who think you are nuts or simply want to know more.  And what will you tell the nosey stranger in the grocery store?

A final note on coveting.  Exodus 20:17 is the 10th commandment.  It reads, “You shall not covet your neighbor’s house. You shall not covet your neighbor’s wife, or his male or female servant, his ox or donkey, or anything that belongs to your neighbor.”  I’ve never paid much attention to this one.  I always thought of coveting someone’s house as wanting a Hollywood home.  And I don’t have neighbors with 10,000 sq ft homes.  So, nothing to covet, right?  WRONG!  Let’s be realistic.  I may not want my neighbor’s wife (because I don’t want a wife), but I do find myself sometimes wishing I had the income she brings in and all the things that come with it.  And I’d love to have someone mow my yard or clean my house.  Hmmmm, maybe this commandment is more applicable than I’d like to admit.  Coveting gets us into all kinds of trouble.  We spend more than we have.  We get angry, jealous, moody.  We feel like we’ve failed or our spouse has failed us.  It leads to whole host of negative feelings that only bring harm on us.  Fight the urge to want what others have.  Remember, they too have sacrificed to gain those things.  They may very well have sacrificed things you aren’t willing to forfeit.

Next time, I’ll dive into the nitty gritty of it.  You’ll get to see what we actually do to survive on one income!  Until next time…

1. If My Husband Made as Much as Yours – Surviving on a Single Income – Pt. 1

 

I started writing this as a single post, but quickly realized it was dragging out.  There is so much to say on the topic of surviving, and even thriving, on a single income.  I decided to break it into a series, though I’m not sure how many parts yet.  So here we go….

I knew a woman who would make occasional comments regarding our wealth, usually when we had something that she didn’t.  “If Bob (named changed, naturally) made that much, we could go for a weekend trip to the river.” HA! this makes me laugh hysterically!  We’re not wealthy.  I don’t think she meant to be rude, but she seemed to think we had loads of money, and she made of habit of saying things like, “If my husband made as much as yours, we could have a nice house.”  One of my favorite shirts that I sleep in I bought at The Gap when I was in 8th grade.  Let’s just say that was well over 20 years ago.  I still have clothes from college, though few of them fit well.  By American standards, we aren’t wealthy.  Living on a single income isn’t easy, and it’s a conscious choice that we made and prepared for.  There are trade-offs, and we’ve made plenty of mistakes.  Here are a few ideas that have helped our journey.

There are many who say that you can’t raise a family on one income these days.  Tell that to a single parent!  However, the choice for a two-parent family to become single income is not an easy one.  It takes work, planning, and discipline.  Even if you choose to be dual income, it is wise to put yourself in a situation in which you could make it on one income.  Kids get sick.  Babies arrive.  Companies downsize.  Spouses pass away.  Parents need care.  Better to be prepared than caught off guard, especially when it comes to providing for your family.

In the end, it is important to be at peace with your decision.  If you decide to be single income, don’t whine about it.  You chose it!  Embrace it!  Living on less isn’t easy, but it can be rewarding if you CHOOSE to accept the rewards.  The rewards are not tangible, which is difficult in a materialistic society.  People know your wealth based on the things you own.  Time with your children, on the other hand, cannot be measured with dollars or new cars.

Before I get into how we do it, I want to debunk a few myths on single-income savings.  Some experts say you can save tons of money by Mom (or Dad) staying home.  And some of their examples are totally bogus.

  • Get rid of a vehicle.  Um, ya.  That’ll be peachy.  You go from working in an office, having social contact to being trapped in a house  All.Day.Long. with small children.  The savings on the car payment won’t even begin to cover the cost of your therapist.
  • Gas Savings.  These experts say you won’t be commuting, so you won’t be buying as much gas.  Ask any mom how much gas they spend driving their kids around.  If you stay home with your kids, you’ll be heading to the park, the pool, play dates, and anywhere else that helps everyone stay sane.  The increased gas cost will reduce the need for the therapist.
  • My favorite, however, is the clothing savings.  I guess these experts think stay at home moms will dig through the neighbor’s garbage for fabric scraps to sew their own clothes.  I don’t even know how to work a sewing machine, so I either go naked or buy them.  No you don’t need career apparel, but you still need clothes to wear to the grocery store, church, the occasional date with hubby, etc.  Unless you live in a nudist commune.  Then by all means, enjoy the savings.  But don’t invite me over for a visit.  If you’re anything like me, your butt gets bigger every year and you have to replace those clothes.  That, or the kids decorate your favorite shirt with Sharpies.
  • Dining out will cease since Mom (or Dad) is staying home to prepare nutritious home cooked meals.  Ok, my first year at home was the exact opposite.  I manage to scrape the spit-up off my third outfit of the day, spray on some perfume, and have the diaper bag packed by 5:18.  That’s exactly when hubby walked through the door.  Before he could sit down, I turned him around, headed out the door, and said, “Where would you like to go to dinner?”  Of course, only places that served margaritas were permitted.  We spent a fortune eating out in the beginning.

In the next post I’ll talk about setting a purpose.  Probably more than that.  I’m still writing this all out and trying to divide it so it’s actually useful!

Stay tuned….