My wife and I (Mid 30s) are lucky to both make pretty good money and live in a MCOL area. Her job has gone downhill so far this year and for the first time this week she is openly talking about quitting it and becoming a SAHM.
We have been living a good amount below our means so I haven’t been that into budgeting. I have a monthly cash flow tracker where I figure out how much in excess we have each month to put into investment accounts or (on a rare month usually around holidays or vacations) what I need to pull from savings, and I keep a “balance sheet” for us that I update quarterly.
This obviously changes if we go down to just my salary. The belt is going to get a lot tighter, though on paper, based on an excel I just made we can make it work. For reference our monthly mortgage is about 34% of my take home pay.
The issue I’m running into is worrying if I am missing something big that is going to come back to bite us or trying to plan for the unexpected. How do you factor in the fact that there is a good chance we will need a new HVAC in the next 3-5 years but probably not this year? Or how the TV might break and we need a new one?
Other parts of our financial situation that may be relevant:
Debt free besides our house.
Have an emergency fund with about 6 months of living expenses but if it gets depleted I’m not sure there will be enough leftover with just my earnings to replenish it.
Have non-retirement investments that I would prefer not to touch.
Wife may be able to pull part time freelance work but can’t really count on it. Was thinking her proceeds from that could be used to partially fill the “fun” budget.
Kicking the tires on going from a two income household to one. What are some budgeting pitfalls I should watch out for?
byu/Distinct-Cut-6368 inpersonalfinance
Posted by Distinct-Cut-6368
29 Comments
Me personally, I have 2 online high yield savings accounts. I put $25/ week into 1 of them & $40/week into the other one.. just in case an emergency arises.
A big thing to consider is, as money starts getting tight, please don’t let it create conflict between you two. Not sure how old your children are, but if she can do any part time work from home or elsewhere if they’re in school, it’ll help. Any little bit helps. Just don’t let money become the demise of your marriage. 👍
We went from 2 incomes down to 1 when we had our kid almost 4 years ago. We were much worse at consumption and spending then, and I went back to work after the first year because we couldn’t swing it anymore. We also had student loans so that was part of it.
Seems like y’all are in a much better place with no debt. You’d have to plan for the bigger stuff that needs replacing separately from your emergency fund. I’d create sinking funds for that stuff. Put a certain $ each month that is earmarked for replacements/upgrades/maintenance.
I think the real question is, how tight is it? I’d need to see actual numbers to give my true opinion on tightness.
If you really need to tightly budget you can utilize sinking funds for the large lumpy expenses like home repair, car repair, medical, pet care, etc. Estimate what such categories would cost you over a typical/average 1 year period and then contribute 1/12 of that amount each month.
Although since you are *voluntarily* on a tight budget and have what sounds like a decently large net worth you can just do this mentally or on paper in my opinion. It’s important to know where you really stand accounting for these expected unexpected expenses but I wouldn’t forgo retirement in order to actually contribute to such funds (for example) when you know you have savings or other investments to pull from if necessary.
In this economy she should keep at least a foot in her career. How stable is your job?
Before your wife quits her job see if you can increase emergency reserve to 12 months of expenses. This extra cushion will help a lot with home repairs etc.
If she can do a part-time job, that would be beneficial and reduce dependence on one income.
Consider getting a home equity line of credit if you can, or a home warranty if you can’t. You shouldn’t have to pay for a new roof or HVAC all in one lump sum. You’re doing good though, see if you can make it work.
If I were in your shoes, my spouse and I would come to an agreement that we would live on my salary for 6 months and see how that feels. In the meantime, I’d put all my spouses salary in an emergency fund HYSA for that roof or HVAC of whatever big ticket item you’re concerned about.
I would take a few of months and try living on just your salary. Put her paychecks directly into a savings account and use only your checks to pay bills, buy groceries and clothes, pay for whatever you need. The only exception would be any daycare expenses that you won’t pay if your wife was to stay at home. Continue to pay those from her salary.
Do this for the next three months or so. See if you can do it without dipping in to the savings or using credit cards. If you can’t, it’s a very good sign that dropping to one income isn’t sustainable without some lifestyle changes. Then you can decide if those lifestyle changes are worth it to both of you.
It sometimes happens that when one person stops working the things they want to do instead end up costing some additional money. Think with her about how her newly found time might be spent.
Does your wife like to cook?
If you had to pull you’re entire emergency fund and then couldn’t replenish it you really shouldn’t drop not drop to one income by choice Unless you’re already maxing out 401k, Roth IRA, or have a pension so could contribute less to those which is still not best case but understandable
This typically hurts SAHM long-term bc social security and retirement accounts will be stagnant. It is why many women end up in poverty.
SAHM shopping expense. Mine was $70 every 5 days on average at Target, followed by $20 at Chic-Fila or Panera. Death by 1000 cuts.
To put that into perspective, that’s ~$500/mo. In 2 months, that’s a car repair wasted. In half a year, that’s a new water heater gone. My wife didn’t understand how $70 “a week” could add up to anything meaningful.
Live on your salary alone for six months and see how you feel. Stash hers to beef up emergency fund. But I think also if a new tv would break you that’s too tight.
Not sure with the signs in the economy now is the time to go down to one income. But if you’re serious about it the easiest way to figure out if it will work is to have the entirety of the SAHS-to-be with adjustments (like daycare would be paid out of the SAHS income, but if they carried their own health insurance then deduct the amount of the higher insurance out of the income you’re testing living on).
Do it for several months. If you can manage it – congrats you get to go into it with abigger chunk in savings. If you can’t manage it – congrats at least you’re not having to job search after you depleted savings trying it out.
Others have commented on the finance side so I’ll add this instead. Transitioning from both working to wife becoming a sahm can be tough. A really good sit down talk potentially with an assist from a 3rd party like a family therapist may be worth its weight in gold.
Talk about how you’re going to divide chores, how she can buy non household budgeted items like a treat for herself or gifts? Will you put aside an allowance so she doesn’t need to ask for money. Will you expect to do less around the house? Does she need a socialisation outlet (without work colleagues a sahm can be a lonely role without a club or something). A regular date night or a game night with friends etc may be a welcome escape from the house for her
There’s lots of little things that should be talked about first because while they’re all small they can cause resentment or issues down the line.
Sounds like wife would be better served finding a job she doesn’t want to leave in this economy.
Also I see a lot of optimistic people in these comments while I see red flags in your post.
You check your budget each month to see if you have enough to throw in investments. But then come holiday season you’re pulling from savings to pay for stuff.
1. You don’t have a good budget.
2. You’re definitely living on the margin more than you think.
Taking some time to truly live on one income would be very revealing for you I think. And once kids go to school full time, she might miss having a career. They’re hard to get back.
Best thing is to try it for a month or two. All of her income gets immediately transferred into savings while on this trial. See if you can make it a month or two to start, and what you have left over (or how much you are pulling from savings to make this happen). If it works for your family, she can leave her job and you just bulked up your emergency fund. If it fails miserably, maybe she could look for other work to get her out of her current situation.
When you ran the numbers, did you use bare bones numbers, average numbers, or did you pad the numbers to give yourself a comfortable margin of error? If you know you’re going to need a new AC in the next few years, does your income allow you to save 50-200 a month for this anticipated future expense? In the same vein, how are your vehicles, roof, and other major appliances? Are any insurances through her work?
What % of your total takehome pay do you spend each year?
Not like hypothetical “I spend X on mortgage and Y on utilities” which always misses the non-monthly spend.
Like if you took 100% of your spending in 2025, what % of your takehome pay would that be?
The way we really tested this before my wife converted to SAHM. Was for 6months we both kept working but we ran our lives completely on my salary. Anything she made, we stuffed into a separate account.
After 6 months we were able to figure out we could actually pull the trigger. The only place we really had to slow down was vacations/flying to see family.
My wife had asked about this. I wasn’t totally a no, but I explained the other side she didn’t think about. I said if she took off for 10 years, for example, that’s 10 years that her Roth IRA would get minimal deposits into, she would be missing out on 401k deposits/matches and her works ESOP shares.
I simply explained that in the long run, it would make an impact on retirement funds and could impact how early we could retire.
I didn’t provide concrete math, but she did agree to my point.
I think the 3 months at home with the baby is what solidified her choice to go back to work.
Addition , at their work rally this April, the ESOP shares doubled in price and she mentioned the topic and was glad she decided to stay working.
As far as making ends meet, it would be tight if she did quit. It’s the HDHP that would get us. My deductible is 8k for a family. As far as other unexpected expenses, we would have relied on our emergency fund, but it would take it a lot longer to recover if we dipped into it.
Didn’t see any mention about cars. How soon do you anticipate needing a replacement?
A car payment could really shake things up if there’s no plan.
I consider it never too early to be thinking about retirement. Not of whether you can get by today but what impact the decisions will mean to your retirement funds. I honestly can’t imagine trying to live in the modern world on one income if I didn’t have other options. Job sucks? Get another job.
I’m in a similar situation. With a very tight budget the unknowns and unexpected stuff absolutely crushes us.
We try to do 0% financing whenever possible for home repairs. This keeps the emergency fund flowing in and out in case something else comes up. Draining it all at once is terrible and takes forever to replenish if your budget is tight.
You need to get a term life policy on yourself. If something happens to you, your wife will go back to work but will not have the earning power she would have had if she had continued working. Especially since you have young kids.
Is she on her company’s health insurance plan? If so, make sure to price out what it will cost to switch to yours. Some plans can be pretty costly to add a spouse.
Soemthing to consider outside of the money is the intense stress that comes with being the sole provider for a family. All of the sudden, a layoff can leave you with no income, no health insurance, etc. i
It hit me a LOT harder than I expected.
We are doing SAHP. Going well so far and plan to buy a house soon when up to a 33% PITI payment of net income.
We have the benefit of reliable cars, and have been operating on one income since we’ve been together (paying student loans, then amassing a house fund will do that). If we get a house with that kind of PITI payment, savings will be only Max HSA and contribute to 5% Max on 401k.
We figure it is worth it since SAHP will go back to with after kids are in school. But we are very aware that this decision impacts our retirement ages. We just think it is worth it
Only way to know is to get on a fully written out budget. Looks like this for my wife and I, and my wife doesn’t work – https://imgur.com/a/budget-spreadsheet-2026-2MZk8Xq
You want your fixed costs to be no more than 50-60% of your take-home pay after taxes (but before 401k or HSA contributions come out). That leaves you margin to invest for retirement, save for emergencies, and enjoy life. You’ll likely have to follow stricter spending habits. That might mean you acknowledge that if the emergency fund gets depleted, you’ll have to temporarily cut out discretionary spending and possibly reduce retirement contributions until it’s full again. That might mean you acknowledge your cars won’t last forever and start setting aside a few hundred per month as a car fund in addition to your emergency fund. My wife and I have an HSA for medical costs, an emergency fund for home repairs, and car funds to replace our vehicles, and all of that is on the table if I were to lose my job.
But it obviously comes with trade-offs. You might not be able to retire as quickly. You might not eat out or travel as much, or you might not upgrade cars as often. You get some say in your relationship as to how important those things are to you. If you don’t want to give those things up, now is the time to speak up. If you are willing to give some of those up, be clear about what the new future will be and lean into it.