The philosophy for our family has always been to live off of one income. When I was single of course I lived off of one income. When I got married my wife and I continued to live off of one income, despite now having twice as much income, and invest the rest.
The reason we did that was to get used to just one income so if my wife chose to quit and stay home there would be no major financial change later on for us. Plus, if you can save so much of your income, why wouldn’t you do it? Basically, it comes down to trying to save 50% of your income if possible.
The first career I chose out of college was not being a big money-maker. So do not go into broadcast journalism if you are looking to be financially independent. Only the head anchor folks reading the news make the big bucks.
Everyone else barely scraps by. There were many reporters on food stamps on their first jobs. That is how awesome that career pays. Low pay and crazy deadlines and hours make for a rough life.
We look at six-figure salaries as great salaries. It took me four years to even make six figures when you added up my salary from the four years.
Surviving on Little Income
The one great advantage of making so little for so long after college was that I kept my expectations low and my expenses even lower. I really got used to living life that way so later on in life when my income went way up, there was no need to really boost my expenses other than for a bigger house for my family. I’m not sure I would have kept those frugal habits had I started out with a much larger salary out of college.
I wasn’t starving, and I didn’t consider myself poor, but I was just living life with what I had and enjoyed being out on my own with my first job. If you can be happy on a low salary then things are going to go well in life. Salary to me hasn’t created my general happiness, I’d rather have more than less, but it’s other activities outside my job that generally make up my general happiness level.
One advantage of being on TV was having free gym memberships and haircuts. Working out always makes me feel better and having a free membership (even though it wasn’t the nicest gym) helped me fill the time I was off-air with something healthy and productive to do.
Two Incomes & Living Off One
When I got married my wife made more than I did. In fact, she was afraid to tell me her income initially. We decided early on that we could live off of my salary for all our expenses. We already had our cars paid off. I had a townhome with a very low and manageable payment. We commuted together to our jobs so there was really no excuse for us to not save one whole salary. Talk about a great way to start off a life together with no debt except a small house payment. On top of saving one whole salary, we were able to make a decent amount when we sold our townhome.
After a year of marriage, we decided to have a family and my wife wanted to stay home. It’s something we had talked about before we were married so it wasn’t a big surprise. We had a game plan and stuck to the plan the best we could from the start. We knew that going down one salary wouldn’t be a big deal because it was only extra income at the time.
Surprise at Work
There wasn’t much of a hit when my wife quit because I suddenly got a huge boost in my salary. My boss decided to leave for another company and all of a sudden, the upper management came to me and offered me the position. Not only did I make more but I made more than what my wife and I had made together, but just off of one salary.
Temptation to Spend
So, with the increase at work, we were tempted to spend more. We had some expenses coming up. We couldn’t stay in the townhome without starting a family. So, we purchased a home and that increased our housing expenses. We also purchased a more family-friendly vehicle but paid in cash because we had it.
Basically at the end of the day, it doesn’t matter if you have one income, two, or even more coming into the home. It’s about controlling your expenses so that you aren’t maxed out or spending more than what you make at the end of the day.
The best way to do it is to start early. Again if you read my first blog about my $150 tennis shoes then you know I started saving early so making a very poor salary out of college didn’t seem to be a big deal. Actually, I thought my first paycheck was pretty big. Sometimes ignorance is bliss because you don’t know any better (until I had a roommate a few years later who was an engineer – wait you make how much?).
If you didn’t start early you can start today. It may take some time because of some large purchases you have already committed yourself to, but at least look at the option of how quickly you can rid yourself of the commitment.
When you live your life spending more than you have you are basically just trying to live someone else’s life. You are lying to yourself and making things more difficult down the road.
There probably isn’t anything wrong with things other than a few misplaced priorities on spending which can be corrected to help bring balance and happiness into your life and to help you on the path toward healthier finances and true wealth growth.