Dual Incomes

I saw an article recommending that couples with dual incomes try to live on just one of them, banking the other one for retirement. That’s sensible advice it seems to me. But it caused me to remember that in our case, it was losing the second income, not banking it, that set us on the path to economic freedom.

When Cherie and I got married, I was a young lawyer, working long hours and weighed down with student loans, and she was a paralegal, working her way through college at night, one class at a time. We weren’t living extravagantly by any means, but it seemed we needed everything we made just to keep the bills paid.

Nearly two years after we were married we had our first child. Even though we knew it would be tough, we decided that instead of going back to her job, Cherie would stay home with our son. We took an immediate and fairly dramatic reduction in our household income. We wondered whether we’d be able to make ends meet.

But we soon made an important discovery that has affected how we have lived ever since. We found that even with our income reduction, we had more money left over at the end of each month after she quit her job than we had before. Because we had to be careful about our spending, we found that we were spending far less. When we were both working full-time, for example, we went out to restaurants for dinner several times a week. After our son was born, we hardly ever did that. Those kind of simple adjustments to our lifestyle, none of which diminished the quality of our life, made a big impact to the bottom line. And the reality of having a child (and soon a second one) impressed on us the importance of financial responsibility. So we started a disciplined regimen of saving, and we spurned nearly all of culture’s calls for us to “keep up with the Joneses.” We set a goal of being able to transition out of my job by the time I turned 50.

The day before my 51st birthday, I packed my car and drove to Virginia to our farm. I haven’t been in my office since then, over four years ago.

We accomplished what we had set out to do. And, perhaps ironically, it was a the loss of our dual income that got us started in the right direction.

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24 comments on “Dual Incomes

  1. bobraxton says:

    In our case, could be called “dueling incomes.” Our first year in New York City, we each had apartment mate – lived apart – single and separate “budget.” Still on our September (early) honeymoon, we moved into seminary student housing in a high rise (Morningside Heights) where we went to seminary (two more years) – both students for pastoral ministry. The following two years I served alternative service (the “draft”) having been granted Conscientious Objector status. As a number, my Nurse’s Aide pay was about five and the pay of my (female) spouse was greater than seven. My pay was weekly, hers was two times per month. We put all of her pay every other time into Savings bank account (interest-bearing) for those two years 1969-1971. A couple of months after we moved to Charlottesville (a brief stay) our offspring was born, after which we moved (end of February) back to NYC to live in the smallest possible commune. For money, the reason I say “dueling” is that according to a “Couples and Money” (book) survey, her style is “freedom” (give it away) and mine is “security” – invest it. Actually we do both (liberally). The church Stewardship principles include: Pay God first (give), pay selves second (invest) pay what you must (the bills, the mortgage) and then mostly forego “discretionary.” For us before 2011 retirement, it was not the loss of one (of two) incomes but rather maximizing year by year our 403(b) – total $45,000 or so – direct withholding – we never saw that money PLUS maximizing year by year Roth IRA (and converting as soon as that became an option – paying massive income taxes on those conversions over a period of four years subsequently). In all of this, the first principle remains “Pay God first.”

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    • Bill says:

      Thanks for sharing Bob. Every couple will have to work out what makes sense for them. In hindsight we could have saved Cherie’s entire income, but if you had told me that at the time I would’ve thought it nearly impossible. When “forced” into that situation we did fine, as it made us take a hard look at all of our expenses. We discovered that a lot of what we thought were necessities, were in fact luxuries that did not improve the quality of our lives.

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  2. daphnegould says:

    I read an interesting study a while back. It looked at people with the exact same income. Some were on food stamps and some were not even though they were eligible. The ones that didn’t get food stamps ate a better diet than those that got food stamps. I think spending is a lot about priorities. Do you prioritize your food? The size of your housing? Your savings? Charity? Going out? Buying stuff? My husband and I were always into prioritizing savings. Luckily for us we are both built that way so we don’t have the typical couples arguments over money.

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    • Bill says:

      Yes I’ve seen the same kind of thing in my life. I know people who get by happily on what culture would call a small income. I’ve known people with very high incomes who were broke all the time and some who filed bankruptcy. There is a basic minimum income we all need to get by, and that can vary depending upon life circumstances. But beyond that, whether a person is financially comfortable for financially distressed will often depend upon how they set priorities.

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  3. nebraskadave says:

    Bill, I’m always glad to see couples that have turned away from the culture trap and build a life around simplicity. With my wife’s every increasing health costs of our 23 years of marriage, building a nest egg was not an option. One income had to be enough. My investment had to be in a company that had a good pension and good benefits in retirement. I credit divine guidance for the career job that I started way back when I was only 20 years old. I was working for a not so good book warehouse and store when I saw an add in the paper that a telecommunication company was hiring. I applied because it was $15 more a week than I was making. Little did I know that it would be taking care of my wife’s health issues many years later and my retirement 41 years later. I have to say that God has blessed me over the years even when I didn’t realize it.

    Today in retirement many of my co workers have retired with large sums of money but are always glued to the TV watching the market where it’s all invested. I have a small savings but nothing invested in the market. I have a modest pension and social security which together is more than enough to live. Health benefits come from medicare and supplementary from the company I retired from. Together they more than cover all my health needs. So I don’t have a big sum of money socked in an investment some where but I have every thing I need. Yes, it’s all vulnerable and could go away at any time but so can market investments. My faith for provision is in God and not my wisdom.

    Have a great modest income day.

    Liked by 1 person

    • Bill says:

      Thanks for sharing your experience Dave. We planned diligently for our future, but we’ve always known that it will never be possible to have complete “security.” Much of what our culture thinks of as security isn’t much more than an illusion and, as you say, nothing is guaranteed. It seems to me that, as with most things in life, the key is to avoid the extremes–neither recklessly giving no thought to the future, nor sitting in fear staring at news from “the market.”

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  4. Katie Rosson says:

    I always thought that I would be married to my job just like a lot of people in our country are but once I was married and my position fell through I discovered that being a housewife was a job! There are lots of things that I have to keep running and in top order because of Stephen’s work schedule and in the future our own children. At first I felt like I wasn’t contributing anything but then i remembered the wife described in Proverbs and Psalm, I realized that this was how women for hundreds of years lived and contributed to their families by cooking, cleaning and creating ways to save money and homemade products do just that! I think people have the mentality that if they are not like “The Joneses” then they are failures which is completely false. This lifestyle works for us and that’s all that matters.

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    • Bill says:

      I absolutely agree. In our case the decision for Cherie to stay home was not only best for our children, but her homemaking kept our expenses down and was a major factor in our being able to transition to a new lifestyle. Sometimes people would treat Cherie as “inferior” because of our choice. That’s a cultural pressure/expectation we have to deal with too. In the end every family must make the decision that is right for them. For some it will be dual incomes and for others it won’t. But those decisions need to be made without regard for what “the Joneses” are doing.

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  5. Joanna says:

    We didn’t even get as far as the second income before our oldest was on the way. We married at university and then shortly after we graduated I got pregnant. Our kids didn’t go to this, that and the other club and sometimes they felt a bit left out, but I don’t think that did them much harm. Now we are living on savings and my minuscule income with an inheritance to tide us over for a little longer. We have never felt deprived and for the few years that Ian was earning good wages, we found it a headache sometimes to know what to do for the best. Having managed with little for so long, it is second nature as we live off the savings and it has lasted far longer than we could ever have imagined. 🙂

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    • Bill says:

      In our culture it isn’t easy to take the path you and Ian (or Cherie and I) have taken. Everyone must choose the path that is right for them, but I’m glad to know there are folks like you and Ian out there, swimming against the current. 🙂

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      • Joanna says:

        Yes it is much more difficult for our children. Our oldest has managed to stay at home, as her husband is on a good income and our son’s wife is managing maternity leave, not sure if it will last though, if they are to be able to afford a home of their own.

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  6. I think we lose much of our freedom when we buy into the paradigm that more is better or define who we are by the toys we have. A great life can be had enjoying simpler things, like a walk in the woods. –Curt

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  7. BeeHappee says:

    Bill, I was surprised to read it has only been 4 years since you packed up in your car?!! Wow, that amazes me even more how quickly you guys got well established. Wow, gives me hope.

    That article is quite depressing for it ‘counts’ only money, in the very small section that it mentions children it says if childcare is more expensive than the lower earner’s salary, it would make more sense to stay home. That saying in itself is quite sad for me. No money can ever pay for the time not spent with your children. Earlier this week I declined a job offer that kept telling me how much more they will pay and how many promotions they will have, etc. etc. If you only add up all types of hidden costs: commute times, extra vehicles needed, more time away from family, extra travel, extra lunches, no flex hours, or what not – often the ‘extra’ is not extra at all. Just an extra burden. We had survived on a single income for many many years, and some years really on no income or 70% of an income, mainly by cutting things out, like one car or no car (Yes, quite an adventure to live in the suburbs without a car), few things, cheap vacations.

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    • Bill says:

      Actually we’ve been transitioning much longer than that. We moved here 12 years ago and I continued to work full time for the next several years (that was a crazy life), then part-time a couple of years after that. I fully severed the chord and got my last paycheck a little over four years ago.

      In defense of the author, I think he was only trying to look at the subject from a purely financial perspective. The intangible value of staying at home instead of working outside the home (and vice versa) are subjective and will depend upon the people making the decision. What we found interesting is that even on a purely financial basis, we ended up being better off on one salary than on two, thanks to the financial disciplines we learned.

      Liked by 1 person

  8. shoreacres says:

    Since I don’t have anything to contribute to this thread re: dual incomes, I’ll offer this little tidbit about Uber going rogue in St. Louis. The sharing economy at its best, I’d say.

    Have you come across Charles Murray’s book, “By The People: Rebuilding Liberty Without Permission? I have it, but haven’t begun reading it yet. I’ve heard good things.

    Liked by 1 person

  9. EllaDee says:

    Your second last para reminds me of the G.O. who holds off using his birthday IOU’s to the day before the next birthday when it’s use it or lose it, and knowing he’ll get another the next day.
    I think saving of one income is a good plan but any plan that involves both partners communicating and being involved is way ahead of winging it… which we did for far too long… in other lives. Some of the winging paid off, but other cost money. However in 10 years working together, we have accomplished much 🙂

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    • Bill says:

      I was 30 when I vowed to do something else with my life when I was 50. I kept that vow, even if I drug it out to the last possible moment. 🙂 I had given up my partnership status, gone to part time and taken a dramatic decrease in comp a few years earlier. Finding the courage to jump out the plane wasn’t easy. 🙂

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  10. smcasson says:

    Thank you, thank you, THANK YOU, Bill for bringing this up! I have been preaching this to all my friends. We have dramatically decreased our spending and we haven’t had any less fun. In fact, it seems we are living more sincerely and consciously, and our family has gotten closer.
    My baby girl is almost 11 months old and my wife hasn’t been back to work since she delivered. She planned to, but the baby would NOT take a bottle.
    Since going on a strict budget about the time the baby was born, we’ve made a many-thousands-of-dollars turnaround, on less household income, and we are happier. I don’t see the downside here!

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    • Bill says:

      I’m really glad the post resonated with you. Seems that your experience is similar to ours. That’s wonderful! As I’ve said, everyone must figure our what is best for them, but our experience (and now yours) is that you won’t necessarily suffer financial hardship by giving up the second income.

      Liked by 1 person

  11. I worked as a bank teller for almost 3 years and was amazed at how many people have no idea where their money is going. If you don´t pay attention to the little purchases, they eat away at saving for big things. It prodded us to start tracking our spending and made a huge difference in being able to buy a home, etc. We both work and bank my salary for those large life purchases. Glad you moved in the direction you did.

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    • Bill says:

      That was our experience too. I would have told you that we were prudent and certainly we weren’t spendthrifts. But we discovered we were spending far more than we needed to (on all those “little things”). Weaning ourselves of them made a huge difference.
      We did the same thing we when transitioned to this life. We discovered that many things that had seemed like necessities, were actually luxuries.

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