Career Information for the
Uncomfortable in business attire? Snoring through
planning meetings? Wishing you were at home with your
family? Well, do something about it!
Most families can survive, even thrive, on one
income. For most of us, especially those of us on the
web, income is not the problem. The problem is expenses.
We complain that money never goes far enough, but the
reality is that we consume too much. It's time to
lighten the load, to trim away the fat.
If you can answer yes to any of the following
questions, you can definitely trim some fat. And before
you get carried away here—none of this is about right
and wrong. It's just MHO (my humble opinion), so take
what you like and ignore the rest.
- Do you have more than one TV or DVR? I
don't know about you, but I spend too much time
watching TV anyhow. Cut down on the amount of time
you spend watching the boob-tube by just having one
in your family room. Try limiting your TV to 30
minutes per day. The first year that I was married,
we didn't even have a TV. It is possible.
- Do you carry a balance on your credit cards?
You're purchasing items without money in the bank to
pay for them. Stop it. There's an old proverb that
says, "The borrower is the servant to the
lender" (Proverbs 22:7). That's because with debt, you earn
wages to put into a purse with holes (Hagagi 1:6). The money you
earn isn't yours—it's your creditors'.
- Do you rent space in a storage building, but you
are not between homes? This is the epitome of
excess. Have a garage sale and save the monthly
- Is the term on your car loan 5+ years? You
are probably buying too much car. Pay off the car
you have and save for the next one so that you can
- Do you get a new car every 3 years? You can
easily keep today's cars six or more years. That
will give you time to pay off the current car and
save up for the next one.
- If I were to ask you how much your car costs,
would you tell me your payment amount? When you
purchase a car, you need to know whether or not you
are getting the best purchase price, not the best
payment. What's a better price: a) $480 per month or
b) $500 per month? The answer is b). $500 per month
for 48 months will cost you $24,000. $480 per month
for 54 months will cost you about $26,000. That is
$2,000 dollars saved by paying an extra $20 per
- Do you lease? Leasing is just a loan where
you don't get to keep what you are buying. Don't be
fooled by the hype. The reason dealers like leasing
so much is that it maximizes the interest rate and
minimizes the carrying or resale value. When your
lease is up, purchase a car with a 3-4 year loan,
pay off the loan, and then save for the next car.
- Do you operate without a spending plan?
Spending plan sounds so much more fun than budget.
Read The Complete Financial Guide for Young
Larry Burkett and get yourself a
spending plan. It will revolutionize the way you
- Do you plan to fill your new house with new
furniture on your new credit card? Resist the
temptation. I haven't met a couple with a new house,
two cars, and a credit card full of furniture that
was happy when the baby arrived. When Amy and I
joined our first Sunday School class after getting
married, we were amazed at the number of prayer
requests from couples where the soon-to-be mom
wanted to quit her job to raise her child, but they
didn't think they could afford it.
- Did you purchase your house based upon both of
your incomes? This makes an incredible
assumption about the future: that you will always
have and/or want two incomes. You are reading an
article about how to survive on one income. My
suggestion: Downsize. It takes humility, but you'll
never get to one-income living on a two- income
- Are you waiting till you make more money before
you start giving to your church or local charity?
If anyone tries to tell you that you have to give
more to make more, they are lying. God loves a
cheerful giver, not one who gives in order to
receive. Here's the deal: if you want to be a good
steward of the money God gives you, make cheerful
giving part of your spending plan. Start with what
you can afford today. As you get raises or bonuses,
share the wealth.
- Is your mortgage payment more than 27% of your
net take-home pay (take home minus giving)?
You've still got utilities, insurance, maintenance,
and incidentals that should eat up another 10-11%.
That's a total of 37-38% on housing expenses. If you
are spending more, then your spending plan probably
doesn't include categories for clothing (5%), cars
and repairs (15%), groceries (12%), savings (5%),
debt repayment (5%), medical expenses (5%), life and
disability insurance (5%), entertainment (5%), and
miscellaneous (5%). Why do you need 5% for
miscellaneous? You won't need it if you plan to go
without haircuts, makeup, postage, gifts, magazine
subscriptions, etc. For more help with a spending
plan, please read The Complete Financial Guide for Young
He also has versions for singles and college
What is the problem with debt? It makes assumptions
about your future income. What will happen if you are
without work for four months? All it takes is one pink
slip or an auto accident requiring knee surgery.
Why do I need to save now—I am nowhere near
retirement? Grace Caroline, our first baby, died the day
she was born. Even a simple funeral costs $2,000.
What is the problem with not having insurance? It
makes assumptions about future wellness. Our second baby
spent 12 weeks in the neo-natal intensive care unit. It
cost the insurance company about $250,000. That would
have devastated our family if we did not have insurance.
Nobody likes how much insurance costs until disaster
If you are going to make it on one income, you have
to have a plan, namely a spending plan or budget. Try
tracking your expenses for two months. Just keep a log
of everything you pay for and then divide them up by the
categories in question 12.
Do your expenses exceed your net take-home pay? If
they do, you are spending too much. You are probably
financing it at 18% on your credit card.
How do your percentages line up with those outlined
in question 12. If they are way out of whack or if
entire categories are missing, you'll have trouble. Are
you saving too much? That sounds great until you realize
that it is the reason you never feel like you have
enough for clothing and groceries. Hoarding or
stinginess is not much better a life than being consumed
Finally, how do your expenses compare to the one
income on which you want to live? The only way to make
it on one income is to develop a spending plan based
upon your income and adjust your expenses.
Before Amy and I got married, I was in the debt
spiral. I was overextended because of an expensive
apartment, an expensive Acura, and an expensive
lifestyle. We were engaged almost one year, so I made a
concentrated effort to get out of debt. The first step
was a smaller, less expensive apartment. The final debt
payment was made four months after we got married. We
stayed in the small apartment for two more years and
developed a spending plan. Amy knew she didn't want to
work once children arrived, so she went ahead and quit
working when we got married. Because of our spending
plan, we were able to support two people on the same
income that I had when I was single and in debt.
After we got married, I started driving Amy's
three-tone Buick Century (blue, rust, and metal), and
she started driving the Acura. Eventually, it was time
to get another car. We knew that we wanted a mini-van
for Amy after the kids arrived, so we bought a Honda
Civic to save money. Then we saved and got her a
mini-van. We continued saving for cars before buying
them, and now I drive a two-year old used Mercedes.
That's three "new" cars without any debt.
What about the house? We stayed in the apartment for
two years, all the while saving for a down payment. We
decided how much house we could afford based upon 38% of
our net take-home pay and a 15-year mortgage. That meant
a smaller home than most people in our income bracket,
but it also means that we don't sweat our mortgage
payment. Each year we increase our monthly payment,
adding an extra monthly principal payment. Lord willing,
we will have
our house paid off in eight years. Then we plan to use
the selling price for the down payment on our
next house. We can continue the same size mortgage
payment that we are making at the end of the eight-year
period and purchase a much larger house. Hopefully,
we'll have our dream home paid for within 16 years.
Larry Burkett is the chairman of
Financial Ministries. Many of the concepts I have
written about here are based upon principles I learned
from books by him. I feel safe recommending Larry
Burkett because our family has found that his principles
don't just sound good; they actually work. The Crown website
offers books, tapes, software and other resources about:
- home buying or selling
- auto leasing, buying, selling, and repairs
- renting your first apartment
- preparing for college
- getting your first credit card
- debt-free living
Changing from two incomes to one is not easy, but it
can be done. Start now. The longer you wait, the harder
James G. Lewis