debthaven
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Post by debthaven on Sept 5, 2015 17:39:31 GMT -5
Zib you forgot never go on vacation.
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zibazinski
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Post by zibazinski on Sept 5, 2015 17:41:38 GMT -5
That's a given. I also forgot gas, insurance, co pays, deductibles. The list is endless.
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debthaven
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Post by debthaven on Sept 5, 2015 17:43:08 GMT -5
Carl I hope this is a hypothetical question.
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zibazinski
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Post by zibazinski on Sept 5, 2015 17:44:04 GMT -5
It's never a bad idea to try btw.
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trimatty471
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Post by trimatty471 on Sept 5, 2015 18:29:42 GMT -5
So, staying at home with kids isn't a "job"?
It should never be a job in the emotional sense, but the time and effort? Seems like a job to me, which doesn't pay well.
Poor people can't afford to work jobs that don't come with paychecks. That's why they don't do as much volunteer work as middle class and wealthy families. True. This was one of the reasons why I never did an internship during college.
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phil5185
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Post by phil5185 on Sept 5, 2015 18:54:08 GMT -5
The 'easy credit' in the modern era has made it harder for young folks to manage their assets. 1. DW and I graduated from college before (big) student loans were 'normal'. And before many of the 'silly' degrees were invented, so our degrees were marketable. 2. Car loans are now universally 'normal' - and long, up to 7 years - and easy to get. 3. House loans became "a right", Congress (Barney Frank, etc) deemed that home ownership was the America Dream and that everyone should be able to buy one, regardless of income. In fact lenders were forced by Law to make a certain % of money available to high-risk borrowers or they would not be licensed to write mortgages (the invention of FHA235 & FHA245 Laws -(if you could fog a mirror you qualified). 4. The proliferation of credit cards. (In the 1960s, the only cc's were gas cards). 30 years later, cc's were handed out to my kids in the college lunch line). 5. Furniture loans, appliance loans, all recent.
So - DW and I would have had a hard time getting in over our heads, we were in a pay-as-you-go society. No student loans, minimal car loans, no cc loans, a mortgage but on a small house, no mcmansions in those days.
But, w/o much debt, we probably could have lived on either of our salaries at any point in time (engineer & RN). The only time that we did drop to one salary was when the kids were preschool - even then DW occasionally took w/e shifts, stayed in touch with the hospital.
But, in general, I think that a steady income stream is more important than a large but sporatic income. Eg, a pair of teachers that are never unemployed can steadily invest $5000/yr for 30 yrs without a miss - and build a million. But a high-earner that is forever on-strike, on layoff waiting for a union job, etc, will continually have to draw-down savings between jobs - and then start over - never a solid 30-yr run where the compounding can work.
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Deleted
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Post by Deleted on Sept 5, 2015 19:07:37 GMT -5
My brother and his wife married shortly after they got out of college. They both started good careers and immediately banked 100% of her take-home pay. (They lived in Charlotte, which was relatively LCOL at the time.) No student loans; my parents paid my brother's expenses, SIL got a full-ride volleyball scholarship. When she decided to leave her job after having their first child, very little adjustment was necessary and they had a nice down payment for their first house.
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quince
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Post by quince on Sept 5, 2015 19:22:12 GMT -5
When we pooled our lives, we pretty much lived on one income. Going down to one income was not so problematic, as the one income has increased, and we had a decent savings cushion. We might spend a bunch of money in one go, but recurring payments are avoided. Other the the stupid bloody rent, and we stuck with a one bedroom apartment, and will, right up until we have 2 children. If income was cut in half, obviously we'd need to move, but in the meantime, some easy things to cut, and like I said, decent savings cushion. Husband is has a reasonably good network in the area, and is already paid on the low end of the scale for what he does, because he's working for a start-up, so having income actually cut in half would really involve moving. (When I hear what Google employees make, I flinch, but he's happy and we have everything in sufficiency or excess. )
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giramomma
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Post by giramomma on Sept 5, 2015 19:37:37 GMT -5
Well, if the cause of loss income is due to divorce, the likely quickest way to get the income back is to remarry, or to have your x remarry in cases of alimony.
If my boss's x were to remarry, that would "save" him 40K of alimony/year...
I married up and therefore had access to what I consider a fair amount assets. SIL didn't really marry up, but she did marry a saver, which gave her access to assets and income to help her (she's a spender, BIL is a saver.)
Otherwise, you try to think creatively to solve your problem. I'm not exceptionally smart, but I am pretty resourceful. That can get you pretty far.
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zibazinski
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Post by zibazinski on Sept 5, 2015 19:44:56 GMT -5
Most women receiving alimony are smart enough to stay single if they're smart enough to get and actually collect alimony.
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8 Bit WWBG
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Post by 8 Bit WWBG on Sept 5, 2015 19:54:33 GMT -5
...:::"Got the information I needed for my research!":::...
What specifically were you looking for? Were you looking for legitimate tips, moral support, hacks...?
If we suddenly lost one of our jobs, it would not be fun. We'd do what needed to be done, but hot damn we'd hate it. I am honestly not sure how we'd cope. I suppose it depends on which of us is the one out of work and what we are doing to rectify the situation, then how long it goes. It'd be one thing to start off trying to stay calm and focused, but it would obviously grate on us.
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zibazinski
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Post by zibazinski on Sept 5, 2015 20:01:36 GMT -5
...:::"Got the information I needed for my research!":::... What specifically were you looking for? Were you looking for legitimate tips, moral support, hacks...? If we suddenly lost one of our jobs, it would not be fun. We'd do what needed to be done, but hot damn we'd hate it. I am honestly not sure how we'd cope. I suppose it depends on which of us is the one out of work and what we are doing to rectify the situation, then how long it goes. It'd be one thing to start off trying to stay calm and focused, but it would obviously grate on us. Guaranteed it'd grate on one of you!!
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GRG a/k/a goldenrulegirl
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Post by GRG a/k/a goldenrulegirl on Sept 5, 2015 21:26:51 GMT -5
We didn't plan to drop to one income. We were struggling as it was on two incomes, so it was far harder than it should have been. I cannot in good conscience recommend that anyone do it the way we did. But, life happens and sometimes you just have to deal with it. What's the saying? "Man plans, God laughs." The learning curve was almost vertical for us but I latched onto Donna Freedman and the Tightwad Gazette by Amy Dazczyn. I found some AOL message boards devoted to frugality and budgeting. Based upon what I learned, we downsized our apartment. We ate home-cooked meals and snacks out of a pantry stocked with loss leaders, drove one car for awhile, dropped cable, skipped vacations, and became experts at finding fun things to do for free. Our kids were in middle school before we could buy a house. In time, DH got 2nd and 3rd jobs to help ease things a bit. I worked off-shift part-time jobs here and there. Overall, it was really difficult at times to stay optimistic that things would improve. Eventually, DSD's child support payments stopped (in MA they go until the child is 23!), we were able to ease up on some very expensive excluded medical expenses, and we just kept putting one foot in front of the other. One of the most difficult aspects of it all was living on such a microscopic margin in a town chock fully of genuinely wealthy people and Keep Up With The Jones' zealots. I think in many respects, our lack of conspicuous consumption was a threat to them -- we weren't drinking the Bigger and Newer is Better juice. They probably thought we were Communists, or, at least, Socialists!!! We survived, but we are still behind and may never fully catch up. We try not to focus on the financial losses and the loss of my professional career, instead gratefully reminding ourselves that we were able to give our kids what they needed. We eventually moved to a different, more economically diverse, town so the KUPWTJ pressure is not an issue. But, I won't lie -- having lived it, I can't recommend VOLUNTARILY choosing to drop to one income without making sure that every duck is in a row beforehand. If happens suddenly, without planning, just dig in, and keep looking forward.
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Deleted
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Post by Deleted on Sept 5, 2015 21:35:02 GMT -5
It also makes a very big difference how much that one income is. Signed Ms. Captain Obivous
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TheHaitian
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Post by TheHaitian on Sept 5, 2015 22:07:37 GMT -5
We didn't plan to drop to one income. We were struggling as it was on two incomes, so it was far harder than it should have been. I cannot in good conscience recommend that anyone do it the way we did. But, life happens and sometimes you just have to deal with it. What's the saying? "Man plans, God laughs." The learning curve was almost vertical for us but I latched onto Donna Freedman and the Tightwad Gazette by Amy Dazczyn. I found some AOL message boards devoted to frugality and budgeting. Based upon what I learned, we downsized our apartment. We ate home-cooked meals and snacks out of a pantry stocked with loss leaders, drove one car for awhile, dropped cable, skipped vacations, and became experts at finding fun things to do for free. Our kids were in middle school before we could buy a house. In time, DH got 2nd and 3rd jobs to help ease things a bit. I worked off-shift part-time jobs here and there. Overall, it was really difficult at times to stay optimistic that things would improve. Eventually, DSD's child support payments stopped (in MA they go until the child is 23!), we were able to ease up on some very expensive excluded medical expenses, and we just kept putting one foot in front of the other. One of the most difficult aspects of it all was living on such a microscopic margin in a town chock fully of genuinely wealthy people and Keep Up With The Jones' zealots. I think in many respects, our lack of conspicuous consumption was a threat to them -- we weren't drinking the Bigger and Newer is Better juice. They probably thought we were Communists, or, at least, Socialists!!! We survived, but we are still behind and may never fully catch up. We try not to focus on the financial losses and the loss of my professional career, instead gratefully reminding ourselves that we were able to give our kids what they needed. We eventually moved to a different, more economically diverse, town so the KUPWTJ pressure is not an issue. But, I won't lie -- having lived it, I can't recommend VOLUNTARILY choosing to drop to one income without making sure that every duck is in a row beforehand. If happens suddenly, without planning, just dig in, and keep looking forward. Thanks for sharing...
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TheHaitian
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Post by TheHaitian on Sept 5, 2015 22:08:32 GMT -5
It also makes a very big difference how much that one income is. Signed Ms. Captain Obivous Anywhere from 50% to 30% I would guess unless one spouse was drastically out earning the other (think 5 or 6 times Salary) then it would not really impact them would it?
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TheHaitian
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Post by TheHaitian on Sept 5, 2015 22:10:54 GMT -5
Carl I hope this is a hypothetical question. I have said it 5 times at least already: just making conversation! That is all
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Deleted
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Post by Deleted on Sept 5, 2015 22:21:52 GMT -5
It also makes a very big difference how much that one income is. Signed Ms. Captain Obivous Anywhere from 50% to 30% I would guess unless one spouse was drastically out earning the other (think 5 or 6 times Salary) then it would not really impact them would it? I meant how much money that one income is. There is a big difference living on one income of $20,000 or one income of $150,000.
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quince
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Post by quince on Sept 5, 2015 22:34:38 GMT -5
Yuh. If they both make 200K, I would hope they could figure out how the hell to live on one income. If not, sympathy at a minimum from this person.
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svwashout
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Post by svwashout on Sept 5, 2015 23:03:02 GMT -5
It nearly happened to me a couple of years ago when I was about to retire. That meant giving up W2 income and relying purely on 1099 passive income from my portfolio. I had a rough plan for the transition, it involved spending 50-100% more to occupy the free time, and certainly no cutting back. My attitude is it's fine to dip into principal on my savings up to 3% per year, it's nice if expenses are completely covered by income but not necessary. Still, most of my portfolio doesn't pay dividends so I'd probably switch a chunk into oil companies and REITs. And maybe ditch any low-yielding muni bonds.
Management talked me back in with a special arrangement so I'm still getting both incomes, but this is still the plan for when I retire. On second thought I would cut way back on one expense-- my quarterly estimated tax checks would shrink by a lot.
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marvholly
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Post by marvholly on Sept 6, 2015 5:23:55 GMT -5
I'm old (69) and old fashioned - knew I would stay home w/kids. We ALWAYS lived on his income & saved mine for the biggies: house, car or good furniture.
DD1 practiced for a year before getting preggie.
DD2 did a TOTAL review of her spending & set up a basic needs budget w/o counting on child support several before her divorce finalized.
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OldCoyote
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Post by OldCoyote on Sept 6, 2015 7:09:16 GMT -5
My wife was laid off a year ago last July We are lucky it just meant that I had to work a little harder, maybe take on jobs that I would have turned down before. Wife, "Get your lazy butt to work".
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TheHaitian
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Post by TheHaitian on Sept 6, 2015 8:13:53 GMT -5
Anywhere from 50% to 30% I would guess unless one spouse was drastically out earning the other (think 5 or 6 times Salary) then it would not really impact them would it? I meant how much money that one income is. There is a big difference living on one income of $20,000 or one income of $150,000. True but for this exercise let's assume the remaining income is anywhere from 50k to 100k.
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Blonde Granny
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Post by Blonde Granny on Sept 6, 2015 8:28:39 GMT -5
You can set the remaining income at any level you want, but the issue is what is the amount of ongoing spending going to be. What can be cut? What would never be cut? How does the non working spouse react to no longer having the ability to spend at will?
I can guarantee you that marvholly would survive quite well, others of us on here would likely find a better paying job or struggle to find places to cut expenses. Another group would pull out the credit cards and continue on living as if their life never changed (the last category are certainly in the very small minority that hang out here).
In other words, there is no magic bullet to this "exercise" that will allow your life to continue uninterrupted.
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Deleted
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Post by Deleted on Sept 6, 2015 9:06:48 GMT -5
You can set the remaining income at any level you want, but the issue is what is the amount of ongoing spending going to be. What can be cut? What would never be cut? How does the non working spouse react to no longer having the ability to spend at will?
I can guarantee you that marvholly would survive quite well, others of us on here would likely find a better paying job or struggle to find places to cut expenses. Another group would pull out the credit cards and continue on living as if their life never changed (the last category are certainly in the very small minority that hang out here).
In other words, there is no magic bullet to this "exercise" that will allow your life to continue uninterrupted. Nobody can give you THE ANSWER for how to adjust to a 50% paycut. It's going to vary so widely from person to person based on their budget, cost of living in their area, job availability, willingness to go without, etc. For some it would be absorbed quite easily, for others it would suck tremendously. If you really want to give it a go, I like your idea of sticking it in 401Ks where you can't get it, opposed to your wife's idea. (Yes, I saw the Facebook post! )
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TheHaitian
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Post by TheHaitian on Sept 6, 2015 9:09:05 GMT -5
You can set the remaining income at any level you want, but the issue is what is the amount of ongoing spending going to be. What can be cut? What would never be cut? How does the non working spouse react to no longer having the ability to spend at will?
I can guarantee you that marvholly would survive quite well, others of us on here would likely find a better paying job or struggle to find places to cut expenses. Another group would pull out the credit cards and continue on living as if their life never changed (the last category are certainly in the very small minority that hang out here).
In other words, there is no magic bullet to this "exercise" that will allow your life to continue uninterrupted. Nobody can give you THE ANSWER for how to adjust to a 50% paycut. It's going to vary so widely from person to person based on their budget, cost of living in their area, job availability, willingness to go without, etc. For some it would be absorbed quite easily, for others it would suck tremendously. If you really want to give it a go, I like your idea of sticking it in 401Ks where you can't get it, opposed to your wife's idea. (Yes, I saw the Facebook post! ) I don't know what you saw but I did not post it! I was not looking for a magic bullet; just wanted to see how others did it and how it worked out... Simple! I got my answers for my research; I am good!
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TheHaitian
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Post by TheHaitian on Sept 6, 2015 10:39:56 GMT -5
Yuh. If they both make 200K, I would hope they could figure out how the hell to live on one income. If not, sympathy at a minimum from this person. You need to visit "DC Urban mom dad" finance forum
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teen persuasion
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Post by teen persuasion on Sept 6, 2015 11:01:00 GMT -5
You have to be prepared in advance, to some degree, to pull it off successfully. Decent EF, to cover you for 6 - 12 months if no income at all, longer if some income coming in. CCs paid in full every month. Used cars bought for cash, no car notes (and thus cheaper insurance, too). No other monthly obligations, except reasonable mortgage and student loans. Money going into savings of some sort: retirement accounts, bank, etc.
If this is a planned change, you rework the budget to compensate for the income loss, beforehand. If this is unplanned, you go into proactive crisis mode, and rework the budget. Some things will work in your favor: reduced taxes, increased credits like EITC, daycare expenses go away if one parent home, deferrals for student loans while unemployed, unemployment insurance income, etc. Some changes you need to make: cut cable, cut luxuries, cut vices (cigarettes), reduce utilities, reduce food bills - skip going out and cook meals instead, stop buying convenience foods and buy basic ingredients, stop buying junk food and pop, shop sales and use coupons. No recreational shopping. Prioritize spending on necessities, save for wants.
Cut back regular savings if necessary, but try to still maintain at least a little buffer for Murphy, and for the future (retirement). Save EXTRA when things are good, to give you that room to cutback when things are not so good.
Most people's spending is pretty slushy - there is a lot of unnecessary stuff to cut out. It is more difficult to cut things when you lock yourself into contracts, or dig yourself a hole of debt. If your current comfortable income leads you to believe you can afford something, don't buy it in installments, buy it outright and be done. Oh, can't swing that, but can swing the monthly cost? Sorry, you can't really afford it, now. Put the monthly cost in savings, until you can buy it outright instead.
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Miss Tequila
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Post by Miss Tequila on Sept 6, 2015 11:02:18 GMT -5
I dropped to one income when I got divorced. I have never lived an extravagant lifestyle so my day to day living hasn't changed.
The biggest change is that I no longer drop $10k-$15k on vacations a year. We used to go away as a couple to a resort in the Caribbean (10 days) and also take the kids in a tropical vacation and sometimes tossed in a thire vacation. This year I took the kids to the shore for 5 days. Meh, different but it was still the ocean!
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MJ2.0
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Post by MJ2.0 on Sept 6, 2015 11:16:48 GMT -5
I'm doing it now somewhat and will be doing it officially after 9/30. I think the "easy" part for me is reducing fixed expenses (smaller, cheaper housing, only internet, cheap phone plan). Variable expenses and saying NO to the little indulgences I enjoy will really be the tough part. The little shindig in midtown NYC I went to a few weeks back is definitely the last of its kind for the foreseeable future.
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