without reflection, research, meditation, and possibly a short vacation. Women who are thinking about dropping out of the workforce should talk to others who’ve made that transition. Check out Mocha Moms and Mothers & More, two national networks of stay-at-home moms, before you resign from your position, just so you get an idea of what life holds in store for you if you choose that route. The workforce is like a plane at 20,000 feet–it’s easier to drop out than it is to drop back in. And the drop down can be exhilarating, but you better know where you are landing and you better have a parachute. (You can learn more about the groups at www.mochamoms.org and www.mothersandmore.org.)
Living off of one income may seem impossible if you’ve been counting on that second paycheck. Most couples decide they can only afford the house they want or pay tuition for their children to attend private school or take family vacations each summer if both spouses are working. But living and depending on two incomes for basic household expenses can be dangerous. Your budget is set, and often maxed out, on that combined income. What happens if one of you gets sick or loses his or her job? How long can you afford to pay your mortgage or rent and other bills on one income? What if you get pregnant? Even if your company offers some paid maternity leave, what if you decide you want to stay at home longer?
If you’ve based your budget for essential monthly expenses on one income–or even if you live off just one-and-a-half of your combined earnings–you’ll have enough money put away to cover those difficult periods. You may not be able to stash any cash in your savings account during those trying times, but you won’t have to worry about how you’ll pay your mortgage either.
By living on one income you can also use the other income to fulfill other dreams and goals: spending more time at home with your children, going back to school, or starting your own business. The best part is, if you never need to dip into the second inc
ome, you may have a sizable savings account that could help you whittle down your children’s college bills and build a large nest egg for your retirement. As financial adviser Mo Barakat says, “The couple that can manage to live off one income and save the second is the couple that is headed toward financial wealth. That’s the golden formula.”
Maybe you can’t make a dramatic change in your spending and savings habits immediately, so start gradually. Instead of spending two incomes (or one income, if there is a sole breadwinner) down to the last dime each month, stash away 5% of your pay, then 10%, and work your way up to 20% to 25% of your gross income.
You may still think that is impractical or impossible in your situation. It may seem that way at first, but keep reminding yourself of the financial