If you are wondering about going from being a dual income family to a single income family, consider the following. There are times when a single income can actually save you money and leave you with a better financial outlook that does a dual income.
Here are some ways where you may actually do better on a single income.
When the second income puts you in a higher tax bracket. Dual income earners are often penalized in the form of state and federal taxes based on that second income. I know I was shocked this year of how making just a little extra gross money caused us to actually retain less actual net income than we did last year, once we factored in taxes. In other words, I worked more but got less money to keep.
When the second income causes more expenses than it covers. When considering a second income, do a breakdown of what it will actually cost you to support that second income. Child care is a big expense for example. Also include transportation, wardrobe, purchased lunches, membership dues and any other work related expenses.
When the dual income prevents you from living frugally. If you are working full time outside of the home, what extra expenses do you have in your home that stems from not having enough time? Look at things that the stay at home spouse does now or could do to eliminate spending.
Families with dual incomes may need some extra help. For example, look at some of the following extra costs.
Will you need a lawn service or a maid service? Will you need to hire someone to paint, decorate or do minor household repairs? Will you reply more on eating out instead of home cooked meals? Will you have to give up taking the time to cut coupons and watch grocery food sales? (You could add another 50 percent to your grocery bill, at least). Will your children have to buy lunch instead of packing a home made lunch?
All of these expenses can add up, and depending on the actual size of the salary, may even surpass the second income.
You can read more articles by Mary Ann Romans when you click here
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