Friday, June 15, 2007
For What It's Worth: Single Income
It's a dream for a lot of working moms, being able to stay at home with their kids, but with the cost of living, it's a dream that rarely comes true. Tonight Craig Stevens shows us that for what it's worth, the switch from two incomes to one might be easier than you think.
WSVN -- It may look easy on TV, but Claudia Falero knows all too well that being a stay at home mom is a demanding 9 to 5.
Claudia Falero: "It's just busy. It's non-stop all day."
And she and her husband had more than a few adjustments to make when they decided to rely on a single income to raise their kids.
Claudia Falero: "We had to see where we were gonna cut cuz when you have an extra salary, you do end up spending more."
While budgeting may seem overwhelming, Seven's financial expert Allie Jablon says living on one income is definitely possible.
Allie Jablon, 7 Financial Expert: " It really takes having a good look at your expenses and forming a new type of budget to decide whether or not one parent can stay at home."
And there are a few simple steps you can take to make sure your new budget can support your new lifestyle.
First, track all your expenses over a period of a few months to see where your money is going.
Allie Jablon, 7 Financial Expert: "If you start to pay all of your expenses with cash or either one credit or debit card, you're going to realize how frivolous some of your purchases are."
Allie says the best way to know if you're ready to go solo financially is to run the numbers. Look at the income that you're thinking about getting rid of on a monthly basis, after taxes, and do some calculations.
Allie Jablon, 7 Financial Expert: "Subtract from that the cost of transportation to work, childcare costs, professional work clothes costs and then the added cost of food by eating out during work."
The number you get is how much that second income is really bringing in.
Allie Jablon, 7 Financial Expert: "That number may end up being negative, which means that having a second parent working may actually be a drain on the family's income."
The last step, do a trial run of your new budget.
Allie Jablon, 7 Financial Expert: "Try to live on the single income, if it is your spouse's, for a period of about three months."
Claudia and her husband were able to work out the numbers in their favor, but Claudia says her pay-off is bigger than any paycheck.
Claudia Falero: "The best part of staying at home with my kids is being with them and it's just, I wouldn't miss it for the world."
Craig Stevens: "And Allie says if you don't want to run those calculations yourself, there are some helpful websites that will do it for you.
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