# Planning to live off one salary?



## willyfones (20 Jun 2018)

*Age:* 36
*Spouse’s/Partner's age:* 34

*Annual gross income from employment:* 46,000 
*Annual gross income of spouse:* 40,000

*Monthly take-home pay:* 5350 pm total

*Type of employment:* Both PAYE
*
In general are you:
(a) spending more than you earn, or
(b) saving?*

We never like to borrow and never have (apart from mortgage) breaking even a bit for the last 2 years with doing up our house and having a child.

*Rough estimate of value of home:* 555k
*Amount outstanding on your mortgage:* 220k 
*What interest rate are you paying? *3.1% with KBC 927 per month

*Other borrowings – car loans/personal loans etc*
None 

*Do you pay off your full credit card balance each month?* None


*Savings and investments:* 12k savings in Credit Union. 

*Do you have a pension scheme?* Two DC pensions about 5 – 6 % contributions maybe 20k in total in both. 

*Do you own any investment or other property?* No

*Ages of children:* 1 two year old 

*Life insurance:*  Joint mortgage protection, Health Insurance, 

*What specific question do you have or what issues are of concern to you?*


We pay 600 euro a month childcare (and this is only for 2 days a week) we have a relative minding for the other 3 days. But we would like to have another child so this will rise to maybe 800 plus a month or more.

I have been thinking maybe it would be better if we drastically cut back on our expenditure and try to live off one wage for maybe the next 5 years. I was thinking I could save maybe 8k over the next year and a half. Then bring our savings up to 20k and drip feed this into our expenditure over the 5 years.

Both working – 5350 per month or 1230 per week

Single working – 3170 per month 730 per week plus savings (807 per week)

How can I financially plan for something like this to see if it is viable? We both would love to have our child and future child minded at home. We obviously would have to drastically cut back on our spending.


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## llgon (20 Jun 2018)

I would start by looking at alternatives to your current paid childcare. €70 per day appears extortionate.


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## POC (20 Jun 2018)

Also the relative who currently minds one child, 3 days a week, may not be willing to mind two.


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## PGF2016 (20 Jun 2018)

willyfones said:


> How can I financially plan for something like this to see if it is viable?



Is there anything stopping you from trying this now in advance of having the second child? Put all the second wage into a savings account as soon as it comes in. 

It does seem as though you'll be on a knife edge and any financial shock could be a problem.


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## Clamball (20 Jun 2018)

I know of friends of mine who loaded all the tax allowances possible on the “working spouse” and saved all the earnings of the “hoping to give up work spouse” aside from child care into a saving account.  They used this money to save for big ticket items, furniture, cars, holidays etc so they got a feel for what they would loose out if one partner gave up work.

You could also save on one car and not two possibly, and the partner at home would probably have more time to shop for cheaper food and cook from scratch which would save money, but it would need to be a determined effort for the stay at home spouse to work hard to make the income work for the family.  The working partner should probably leave the money management to the stay at home spouse so that every day spending can be planned sand controlled.

With both partners working they are time poor so a sea change would be needed to have one partner stay home. 

Plus you need to plan and budget for emergencies.

Best of luck


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## aristotle (20 Jun 2018)

My wife gave up work a few years back to be a full time mother (is that the phrase?!) to our two kids and some things I learned over the years:

- Running two cars is costly. Insurance\tax\servicing\NCT\baby seats\break downs\fuel\tyres. Its a big difference from running your own car
- There is more electricity and heating bills as the house is occupied more or less all day every day
- Bit more wear and tear about the house with kids running riot from time to time
- Kids need to be entertained from time to time so there will be more expenditure on play centres, pet farms and eating out
- While its mothers best intentions to save on groceries I find its hard to say no kids all the time when they are also in the shops looking for toys, books, magazines (dont get me started on Match Attax soccer cards!)
- To give you an idea my wife spends €1500-€2000 every month which excludes the mortgage and bills. And I know the spends, its all normal and fairly necessary. There is the odd really bad month where it was €3200 (we replaced blinds in the house, the gas boiler broke down, the oven broke too, her car was due a service and NCT, the school fees were due, the kids needed clothes, there were 3 birthdays to go to etc etc etc).
- Grocery bills are a big spend, no matter how you try to go to Lidl\Aldi etc we end up sometimes in Tesco and Supervalue as I think the quality of some things are much better there.

But I wouldn't change it for the world, and my wife giving up her job to mind the kids is the absolute best thing we ever did. They really benefit as do I. Just be prepared, its a big hit financially.


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## willyfones (20 Jun 2018)

Thanks for the replies,, I think its a good idea to put the second wage into savings to test the waters.. unfortunately, on paper it is looking too tight at the moment. 

Basically, the relative could not be expected to mind both kids,, thats part of my concern.  I estimate full time creche for two kids will be about 1700 -1800 per month so in theory my wife would only gain an extra 450 or 550 euro or so per month by working full time. 
I accept it is our choice to have or not have another child, I might save like mad for the next 12 months and see how we get on.


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## POC (20 Jun 2018)

You say your wife would gain about 450 to 550 if she works full time. However some of that money will be spent on work expenses such as commuting, clothes, contributing to gifts for colleagues, maybe lunches or coffees, etc. So really the net gain to the family would be smaller.

Is part time work or job sharing an option? That might be a good compromise.


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## mtk (21 Jun 2018)

aristotle said:


> Running two cars is costly. Insurance\tax\servicing\NCT\baby seats\break downs\fuel\tyres. Its a big difference from running your own car



Not sure I fully get this point.
In general is it that with 1 working the stay home spouse needs the second car and that its assumed previously they only needed one car because drove together to work?
How true is this assumption e.g what about public transport , are they really working in same area 
or have i misunderstood the point ?


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## aristotle (21 Jun 2018)

Point is when you previously just paid for your own car you now have to take up the costs of your partners car as well out of your single salary, just making a simple point that those costs can be high and easy to overlook.


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## grenzgebiet (21 Jun 2018)

And don't forget that when your spouse returns to work, she might not be at the salary level she would have reached had she continued to work. 
Since there isn't a lot of difference between your respective salaries, would it be possible for both of you to work part time ?  That might allow both of you to continue to keep up with things in your work area and not to have to start at the beginning again in a few years.


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## thos (22 Jun 2018)

A couple of things not mentioned:
- Your 2yr old should be approaching age for ECCE, so there may be some benefit to savings made there, or helping with the hours that family members already cover. Most creche also do discount for additional siblings, so your estimate of 1700-1800 sounds high taking these into account.
- Does the employer pay any additional maternity benefit? Obviously would make sense to work up until that point and ensure to take advantage.
- Returning to work, there is additional unpaid leave available for mothers, so her job could be secured for a number of months after the birth, on the basis that it may prove difficult or want to change her mind and return to work. Also, whether a sabbatical was available again to try and protect the job and earnings level if/when she wanted to return.
- Home Carer tax credit, eur1200 per year, this should be available. Also, to factor in the additional child benefit +140/month

I'm in a similar situation and my wife and I debate this constantly, and the bit it comes down to has been mentioned above:


aristotle said:


> But I wouldn't change it for the world, and my wife giving up her job to mind the kids is the absolute best thing we ever did. They really benefit as do I.


The dilemma is what value to put on that.


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## AlbacoreA (23 Jun 2018)

You have to consider pension for the person not working. 
Also their loss of career advancement, and if they will struggle going back to work. 




aristotle said:


> My wife gave up work a few years back to be a full time mother (is that the phrase?!) to our two kids and some things I learned over the years:
> 
> - Running two cars is costly. Insurance\tax\servicing\NCT\baby seats\break downs\fuel\tyres. Its a big difference from running your own car
> - There is more electricity and heating bills as the house is occupied more or less all day every day
> ...



I agree with this. There is a huge hit financially.


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## Bronte (24 Jun 2018)

What happens if your wife hates being a full time mother.  What if she resents never having any time off. What if you resent her spending your money.  Or she feels guilty spending it. Being at home and being expected to penny pinch in order to do so is bound for trouble.


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## Leper (24 Jun 2018)

Mrs Lep had to give up work on marriage (we as a nation don't need to return to those days). She sacrificed her independence for our children. My independence suffered to as we hadn't a bob with one salary. Were we thanked for it? Pass the bucket swiftly from the left please.

Keep the two jobs no matter what the price of childcare etc. Two incomes beats one everytime. Anybody who tells you different ain't doin' you a favour.


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## AlbacoreA (24 Jun 2018)

If I had to do it over I wouldn't go down to one salary again. In think families with two people working have a better life work balance. 

Take something as simple as running a cheap second car. They've made this more expensive than running a new car. Excepting depreciation. 

You hit that kind of stuff all the time.


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## aristotle (25 Jun 2018)

AlbacoreA said:


> In think families with two people working have a better life work balance.



Interested in this, how do families with two working have a better life\work balance?
I would have thought that its better with one working given you have one person spending less time working\commuting therefore they can fully focus on the life part?


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## Ceist Beag (25 Jun 2018)

Bronte said:


> What happens if your wife hates being a full time mother.  What if she resents never having any time off. What if you resent her spending your money.  Or she feels guilty spending it.


Simple, she doesn't give up her job. Nobody is forced to do anything here, why do you think they are? The OP is simply trying to calculate the financial side of such a decision. 



Leper said:


> Keep the two jobs no matter what the price of childcare etc. Two incomes beats one everytime. Anybody who tells you different ain't doin' you a favour.


This is oversimplifying things Leper. The amount of the income plays a major role in the decision.
We made the decision for MrsBeag to stay at home (Bronte it was a mature conversation between two adults with both parties coming to an agreement without any pressure!) and we're delighted with the decision. She loves being at home with the kids (she has no intention of returning to work any time soon) and we had put in place a plan around finances to ensure that neither of us felt either beholden to or controlling over the other. We have reviewed it annually since it began and tweaked it as suited the situation at that time.
Sure there were sacrifices made but ultimately it is a decision that worked well for us.  
I should note that we are in a more fortunate position in terms of income compared to the OP so I'm not saying the OP should go ahead with the one income approach here, simply saying that the blunt statement from Leper is not true for all couples. 
OP as others have said, a good approach here would be to try it out for a year in terms of putting the money from your partner aside into savings and see how you manage on one salary, before you come to any final decision.


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## RedOnion (25 Jun 2018)

Similar circumstances to @Ceist Beag 
We've been a single income household for 5 years, and it works for us (and we had the mature adult conversation too). 

Different financial circumstances, so I won't pretend to understand trying to get by on 46k a year. There is some good advice earlier in the thread - the one thing I'd say is you might see if there is anything you can do to increase your salary. Cutting costs will only go so far, and it'll take sarcrifices to achieve.

If part time is an option for one spouse (particularly once oldest starts ECCE scheme) have a look in the Tax forum at this thread: https://www.askaboutmoney.com/threads/how-much-can-a-spouse-earn-before-paying-40-tax.204950/

I wish you the best of luck.


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## AlbacoreA (25 Jun 2018)

aristotle said:


> Interested in this, how do families with two working have a better life\work balance?
> I would have thought that its better with one working given you have one person spending less time working\commuting therefore they can fully focus on the life part?



With more money you have options. With less money you have less options. If the budget is very tight you will have no options. 
With a family you end up with all sorts of unexpected expenses. You simply have less ability to cope with this, on a reduced income. 
You could get lucky and have no unexpected events. But if you do...
If you have a high single income then its less of an issue either. 

But I think the OP budget is too tight for what he is planning to do. If either partner takes on extra work then your free time is gone.


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## Leper (25 Jun 2018)

This is a fairly sensitive subject and everybody has an opinion one way or the other. But, before you decide on one thing or another ask yourself "What price does financial independence come in at?" - Lose your financial independence and you lose much more in the process.


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## Bronte (25 Jun 2018)

The thing that most couples fight about it money. Especially in houses with low income.  Yes this is a money website.  And one might look at the figures and say that the wife will only lose 500 a month by not working, but that is to entirely miss the point.  From my viewpoint I'd work even if I gained zero financially by paying for childcare. 

And of course it can work out very well for those with the income to do so.  But I suggest it won't work when things are tight.  You've also got to consider what happens if the main income spouse loses the job.  And yes been there done that. 

Have a mature adult conversation about it is all very well, until reality hits.  One of my SIL's wanted to stay at home, she simple couldn't because she's a massive spender.  You wouldn't believe the stuff she wastes money on.  And I've a sister married and both are spenders and can't say no to their kids, getting themselves in dept for them.  Then I've the BIL sole earner, wife has never spent a penny on herself because he's so bad.  Having to justify spending money on cigarettes. 

I agree with Leper about what price does financial independence come at.


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## thos (25 Jun 2018)

The money is obviously a big part of 'IF' this can work. The part I am also concerned about is When and for How long - ie; at what age does this provide the most benefit, I can see the costs for creche etc when younger, but also looking at the increasing 'chauffeur' duties when kids get a bit older for after school activities.
Trying to figure out if people see this as a fixed (5yr?) arrangement or look at it differently?


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## Fella (25 Jun 2018)

Myself and my wife work part time and we are at home with the kids everyday. It is more expensive than you initially think , I did notice that the bills are more expensive for Gas because in Winter someone is here everyday so heating is on. You will spend money on the kids when your home with them . We eat a lot better now as someone cooks everyday. 

Life is short and your kids won't be kids forever I have no fear of been broke , money is the most replaceable thing on earth , you can always earn money if you have to . I don't understand why people have kids and then spend there life working and kids are been rared by childminders , I see it myself with my own siblings. If your broke and home with your kids everyday doing stuff with them going for a cycle bring them to parks etc its better than been rich and bringing them to Disneyland . You can always get another job , but you can never get the time back with your kids you lost while working.


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## Ceist Beag (25 Jun 2018)

Bronte said:


> Have a mature adult conversation about it is all very well, until reality hits. One of my SIL's wanted to stay at home, she simple couldn't because she's a massive spender. You wouldn't believe the stuff she wastes money on. And I've a sister married and both are spenders and can't say no to their kids, getting themselves in dept for them. Then I've the BIL sole earner, wife has never spent a penny on herself because he's so bad. Having to justify spending money on cigarettes.


None of those adults sound all that mature to me....
Sure Bronte, things can happen such as the main income spouse losing their job but I think couples can plan for this to a certain degree. What I don't buy is this argument about financial independence. I see myself and Mrs Beag as a team. Just because I have an income and she doesn't, that doesn't mean I dictate where the money goes. It doesn't take too much work to split the income between us such that we can each spend as and when we need. You seem to view it that the home carer has to go cap in hand asking for money from the earner but it doesn't have to be like that if both are adult about the whole thing.



thos said:


> Trying to figure out if people see this as a fixed (5yr?) arrangement or look at it differently?


I don't think you can ever had a fixed view of these things. Really what I think you should do is have a fallback option at all times so that if things don't work out with plan A, you have a plan B. Each year you can review how things are going. We started off viewing it as something to be done while the children are in primary school but now we may well extend that through secondary school if the situation remains as is currently.

As with Fella, life is short and it won't be long before the children are off forging their own path. Like I said, I can appreciate that it's not always an easy decision for couples earning lower salaries where it would be hard to survive on just one of those salaries but if you think it's something you really want to do and that you can manage then I don't think you will regret it.


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## Bronte (25 Jun 2018)

Ceist Beag it clearly works for you. But for every one of you there are many a different case.  Especially if money is tight. 

Are you telling me you don't know of mature adults that don't behave in similar fashion to what I've outlined?


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## AlbacoreA (25 Jun 2018)

Fella said:


> ...If your broke and home with your kids everyday doing stuff with them going for a cycle bring them to parks etc its better than been rich and bringing them to Disneyland . You can always get another job , but you can never get the time back with your kids you lost while working....



You might not get another job at the same level. your career might never restart. 
Also people plan around one kids. But when there's more than one then all these plans extend, as do costs etc. 
Its not about Disneyland. Its may be about never having any holiday, kids extra activities all cost money. 
Drop a 2nd car, can affect what activities you can do on the same day. When you have 2+ kids doing say football 3 times a week, the time just disappears. 
Then again, many have no option. You might have 3 kids in primary school. Someone has to look after them during the summer. 

Also as the kids flee the next, or become independent, then looking after parents becomes an issue. if you think kids are expense don't look at nursing care.


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## Ceist Beag (25 Jun 2018)

I think we're agreed on the "especially if money is tight" point Bronte, I said as much in my posts. However you don't seem to allow for the possibility that this is a good option for those that can afford it in your posts - you seem very much against the idea. When I put forward the argument that couples can avoid some of the scenarios you outline (such as rows over the money) by simply being mature adults and discussing these you countered this with examples of people who are not very mature imho. I don't think they are really good examples tbh because those people could (and most likely would/do) have rows over money if both are working as well.
I don't know of mature adults who behave the way you have outlined no - that's not to say I don't think it happens but given the OP has come on here looking for advice and has already don't a fair bit of thinking, I doubt very much that he/she falls into the category who would behave that way either.


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## Frank Underwood (25 Jun 2018)

I think your incomes are two low for One of you to give up completely. Could one of you try to do three days and one try to do a four day week? Children would only have 2 days childcare then? 
One of us stays at home full time and our remaining salary is a lot larger than your highest salary. Things come up, unexpected bills etc. also being at home is hard work. But if you have to watch every penny aswell it’s very very hard.


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## AlbacoreA (25 Jun 2018)

Most of the people I know its only a partially lifestyle choice. Most have no other option. I know some who can easily afford it, but choose not to do it. 
It works for some very well, no so well for others. Seems very much down to the individuals.


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## Fella (25 Jun 2018)

AlbacoreA said:


> You might not get another job at the same level. your career might never restart.
> Also people plan around one kids. But when there's more than one then all these plans extend, as do costs etc.
> Its not about Disneyland. Its may be about never having any holiday, kids extra activities all cost money.
> Drop a 2nd car, can affect what activities you can do on the same day. When you have 2+ kids doing say football 3 times a week, the time just disappears.
> ...



People are forgetting we only work to live not vice versa , I see people stressed out commuting living in big houses fancy cars and 2 weeks a year nice holiday with the kids . They don’t even know there own kids . I’m off with my kids 4 days a week and my wife the same you get to know them you get to do loads with them your realise the kids would rather you be there everyday with them than even having a holiday at all . 
I bring my kids out nearly everyday i’m off . 
If you want to work you’ll get another job if you can almost get by on one wage it won’t take much from another new job to bump you up .


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## AlbacoreA (25 Jun 2018)

Fella said:


> People are forgetting we only work to live not vice versa , I see people stressed out ...



Plenty of people struggle to make ends meet every month. I think we have habit on this forum of forgetting that. So its working to get buy. Not fund two skiing trips every xmas.


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## Purple (25 Jun 2018)

aristotle said:


> To give you an idea my wife spends €1500-€2000 every month which excludes the mortgage and bills


 Sweet This post will be deleted if not edited immediately, does she have a gambling problem or something?



aristotle said:


> Grocery bills are a big spend, no matter how you try to go to Lidl\Aldi etc we end up sometimes in Tesco and Supervalue as I think the quality of some things are much better there.


 I have 4 kids and budget €100 a week on groceries. I shop in Lidl most of the time as they are close to work and so I can do the shopping on my lunch break. While Tesco & Supervalue have more choice the quality of the meat, fruit and veg in Lidl is consistently better than either of them. Asian markets full the void for spices, beans and other such stuff.


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## aristotle (25 Jun 2018)

Purple said:


> Sweet This post will be deleted if not edited immediately, does she have a gambling problem or something?
> .



Ha, no, its all household\groceries\clothes\kids etc. I didn't mean to imply its spending on just herself.


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## Purple (25 Jun 2018)

aristotle said:


> Ha, no, its all household\groceries\clothes\kids etc. I didn't mean to imply its spending on just herself.


 
It's still a lot of money though. Fine if you have it but €150 a week should be more than enough on grocery shopping.


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## Bronte (26 Jun 2018)

You're forgetting Purple that some people have money.  I'm sure I could spend just €100 on groceries but I choose not to.  I imagine many of the posters on this website that give advice tend to have money, while those asking for advice don't.  But many of us remember the days of struggling.  Particularly when one starts out in married life.


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