A woman drawing with her two children.

One of the popular myths of our society involves the notion of the two-income family. The reality is that an increasing number of men and women are sacrificing their careers and income to stay at home and raise their children. If you'd like to do likewise, and maintain a healthy financial situation and still save for your children's education and your own retirement, this advice is for you.

Learning to Live on One Income

Making the decision: The first thing your family should do is discuss the idea and make a list of the pros and cons of staying at home to raise the children. It is important to evaluate the current situation honestly and determine if this is something you actually can do. What may be an easy decision for one family may be a much more difficult decision for another. Have you created a budget yet? Can your current budget withstand any loss in income? If so, how much? Your budget must be as accurate as possible to answer these questions properly. If it isn't, you may make a critical mistake. It may be necessary to put your decision off by a month or two while you update your budget figures. Don't worry about the delay; this is too important to rush into.

Making the transition: You may be able to avoid a complete disruption of your family's lifestyle by easing into the stay-at-home position. Ask your current employer if you can work a few days from home and come into work on the other days. This type of arrangement may offer you the best of both worlds. It is important to recognize, however, that you must be a highly motivated and organized individual to order to accomplish the same amount of work at home that you do in the office.

You may also want to consider starting your own business from home. When choosing what you could do, keep things simple. Think about turning a hobby into a business. What are you passionate about? Do you write? Are you a natural editor and find typos and grammatical errors without thinking? Are you good with numbers? Could you find satisfaction in performing small business accounting duties from your home? Examining the possibilities of those activities you already enjoy is a good place to start.

Any change in your household income is a call to update and adjust your budget. There are many areas of our budgets where we can make changes and tighten our belts. Here are a few of the tried and true methods to save money every month:

  • Coupon cutting: This is a worthwhile project that takes a ridiculously small amount of time each week, and that always saves you money. Combining this process with a shopping list that incorporates the current week's grocery circular specials and sales will definitely help you cut back on grocery spending.
  • Car insurance: There are several ways to cut back on this cost. Shop around; you may discover that you're paying too much for the policy you're presently carrying. If you find a lower quote, your existing company may agree to reduce your premium in order to keep you as a customer. You may also want to adjust your policy's deductibles. At the very least, you should advise your insurance company that you are no longer using your car to drive to work every day.
  • Car loans: This may be a good time for you to refinance any high interest rate car loans you may have taken out. Local credit unions usually offer competitive rates.
  • Utility Services: Many companies offer utility bill budget plans that will divide your total bill for an average year into more manageable monthly charges. (Click here to learn about utility bill budget plans.)

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