Living on one income and having one partner stay home is a dream for many families. And sometimes living on one income can actually put you ahead in terms of savings and expenses. Could you live on one income? In this continuing series, I’ll talk about some of the factors, such as reduced standard expenses that will help you consider this important decision.
If you missed the first article, just click here: Can You Live on One Income? Taxes Explained.
Insurance: You may reduce your health insurance payments with a second income. How? Well assuming that the stay at home parter was paying insurance for coverage through his or her employer, that payment will go away when the employment goes away. Of course, the stay at home partner will still need insurance. This can be achieved through the family plan of a working partner or independently. If you are already paying for a family plan for children, then adding the other partner may not cost you any additional money, or the additional cost may be less than what the partner is currently paying for his or her employer’s plan. Take a good look at the various insurance plans offered by the working partner to see if you can save on your insurance cost.
Most insurance plans allow enrollment at the start of the new year or whenever there is a major life change, such as a marriage, the birth of a child or if one partner loses his or her insurance.
Independent insurance can be purchased, but it may be more expensive than what you are currently paying.
Auto Expenses: There are a few different auto expenses that should be cut when you go down to one income. The first expense is gas. Eliminating a commute to work will eliminate the fuel cost for the vehicle, as well as any tolls and parking expenses.
Gas is no small expense these days. In addition, you may also qualify for a low-milage discount on your car, if it is driven infrequently.
If you can do so, living with only one vehicle will yield you the highest savings. Eliminating a vehicle will make you save on a car payment or purchase cost, auto insurance, auto maintenance, and in some areas, a vehicle tax. Commute to work using mass transit? You’ll obviously save on bus or train fares or the elimination of car pool contributions.
Coming up next in this series is a look at child care and child-related expenses.
Mary Ann Romans writes about everything related to saving money in the Frugal Blog, technology in the Computing Blog, and creating a home in the Home Blog. You can read more of her articles by clicking here.
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