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How do you deal with...
the loss of your spouse's income?
I am trying to get all my ducks in a row and figure out the logistics of things. Currently MH pays the mortgage and our car insurance. I pay for everything else (groceries, utility bill, cable, car payment, cell phones, etc). We just about split the cost of childcare. We each pay for gas for the car we drive the most.
I am assuming we would sell the house we own now upon a divorce because neither of us can afford it on our own. I would then be buying a smaller house because apartments in our town are so expensive it just makes more sense to buy. If I could find a house for the right price I think I could make it work but it would be tough.
So how do you deal with going from a duel income household to a single income? Any tips? Advice? Thoughts?
Re: How do you deal with...
For me, my XH took a lot of the bigger expenses with him...his truck payment & insurance especially. He also had a two loan payments (personal and his duct cleaning truck), and insurance as well.
Before formal CS was ordered, he payed for half of daycare as his contribution to DS' care.
I reduced my cell plan since XH was no longer on it, I cut back on my cable package and I use coupons for grocery shopping.
Everything is on a budget for sure. I use mint.com. I track all of my expenditures and income in Excel as well. When I pay a bill I mark it off in yellow so I know it's taken care of for the month. I also earn a sizeable bonus each November so I use most of that for savings/paying off my lawyer/adding to DS' college fund and a very small portion of it to treat myself.
Groceries seem to be really expensive for me. I used to use Emealz that sends you weekly recipes as well as the list. The meals are cheap and nutritious (some of them aren't that great though).
For Christmas a lot of people on my list will be getting a Christmas card and a homemade plate of goodies.
Well, it sucked. Major monkey balls.
I basically had to get my butt in gear because I lost his income right before having a baby and adding all of her expenses... AND since he lost his job I was not getting child support.
I budgeted and clipped coupons. I researched every single purchased and downsized my life. I sold a lot of items that I did not need. Then, I studied hard, got a certification and got myself a raise. After that I found a higher paying job.
The first thing I did when I was going through my divorce was make a list of all of my expenses, and then figure out which were necessities, and which ones could be cut out. Do this and then compare with your income to see if you break even, fall short, or have some leftover. Luckily, I still had some leftover each month after cutting back a little.
I would be careful about buying a home right now if I were you, unless you get a fantastic deal. And even with that, you have to watch out for repair costs, property taxes, home insurance, etc. I am a single female homeowner and if it wasn't for my dog, I wish I could get rid of my house and rent.
Budget. It really isn't a dirty word.
I had been the breadwinner for most of our marriage so when STBX moved out and took his debt with him, I ended with more money available to me, which now all goes towards DS.
Before you go house hunting, make sure you have written down all of your expenses and see what kind of payment you can afford. Good luck!
ETA: Because of the bad housing economy, it was a wash when we sold our house because realtor fee's was around 35K. We made no profit from selling our house. I am not sure where you stand with your house value and remaining payment, if you are upside down, you may have to owe money.
We sold our home and I now rent. I can't afford the property taxes and HOA fees on top of a mortgage. Also, the houses in my price range were "fixer uppers" and I know the needed repairs will cost me way too much. I rent a duplex with a private back yard and garage for now. I had to let the homeownership bug go. But then again I live in a high cost of living area. If it is significantly cheaper to buy than rent in your area, try buying but make sure you can afford the monthly payments and taxes without stretching yourself thin and that you have a nice emergency fund for urgent repairs that may come your way. (Good rule of thumb that total housing cost (ie. mortgage, tax, HOA and monthly utilities costs) should not exceed 35% of your take home pay).
Reasons I am glad I am not buying:
1. I am still transitioning with life and going through a divorce, I don't want to make any big or permanent decision during this time.
2. I have no idea where I want to be in 5 years. I don't want to buy and then try to sell again in case I want to move or meet someone special and buy a house together. I would not be "stuck".
3. I don't have time to fix or repair anything with the home, especially with a 14 month old. I simply call my landlord.
That that said, I don't think anyone who rents is "throwing away money", they are paying for shelter and there are no hidden costs outside of monthly rent. If you can afford a home comfortably, than kudos to you as that would be a much better deal. I would practice living under a smaller income before deciding to buy if you can just so you know you are not stuck in a bad situation later.
I budget as is right now. My dad always taught me to save as much of my money as possible so that's what I do.
And as for what you said about before I go house hunting that is exactly what I did before we bought our current home. I made a spread sheet of our incomes and figured out our debt and what we qualified for vs what we could realistically afford. At this point in time I am more just weighing my options. But after searching Craigslist this morning and realizing that any apartment that is going to be big enough for me and 2 kids is going to cost the same as a mortgage payment to me it just makes more sense to buy.
I;'m buying a cheaper house so my mortgage will go down to about 20% of gross salary... right now it's 25%. Then I need to pay my student loans (about 10% of gross salary)
I'm ditching cable for online Netflix and going with a cheaper phone plan.
I've always brown bagged so I'll keep doing that
I sell on Ebay to buy myself (or kids) any luxuries
Plan to continue with free activities (farmers markets, parks, etc)
All very good advice too and all things I have thought about/ am currently thinking about. I'm still just weighing my options KWIM?
The first part I bolded is something I have to look into for sure.
Since it would be me and 2 kids I would need at least a 2 bdrm apt which would cost me just about $100 less a month than a mortgage would (rough estimates obviously) which to me makes me sense to go for the mortgage at least then I am building towards something.
Since my oldest is in school I would like to stay in the area we already live in and I'm certain DH would do the same b/c we live in his hometown. This obviously limits me, but that situation is not going to change in the next 5 yrs and I imagine that when I start dating again and if the time comes that we would move in together I would want him to be accepting of the limited areas we could live. All hypothetical of course at this point in time I want nothing more than being on my own with my daughters.
The last part is very good advice thank you. I think for the time being I will be watching every penny I spend and seeing where I could could back and monitoring what I really can afford.
You know, this was hard for me because he paid all the bills and I did whatever I wanted with my money. I've had to adjust to not being able to just spend or buy whatever I want. He still pays my cell phone bill and one other thing, but I will have to take those over soon.
ETA: I earned more than him and had a house before we got married that I was using as a rental. I just made some renovations and moved back to my house.