If your partner has just been laid off or injured and isn’t able to work, you’re probably very concerned about your financial situation and how you’re going to cope. Equally, if you’ve recently had children or you want to achieve a better work-life balance, you may be thinking about one of you packing in your job to stay at home. But how do you cope with this transition and is it achievable?
While this is a major undertaking and will differ with each individual circumstance, changing from having two full-time earners in the family to just one is possible, especially when financial planning is put in place. Below you’ll find some helpful tips on how to make this transition as smooth as possible:
Putting Together a Financial Plan
Should one of you be thinking of leaving work to become a housewife or husband, you will have time to start considering a financial plan before you make decisions. However, if you have been injured at work, then you’re probably having to put plans together overnight, trying to make ends meet so you can afford to pay the bills. If you are in this situation you should first contact an injury lawyer at a company like Marks and Harrison to find out what you’re entitled to. Then, you can start to put together a financial plan.
The best way to start looking at your finances is to create two plans which will help you to see the difference between the two lifestyles and what spending plans need putting in place. In the first plan, place all of the expenses and incomes based on both partners working; in the second, look at the same finances with just one of you in work. In both, cover all sources of income and the potential expenses that will be met.
Understandably, this is going to show a higher income when both of you are working. However, you may also be surprised at the number of expenses that will be reduced when one of you remains at home. Things like meals out during the day, dry cleaning bills, work clothes, child care and convenience meals will be eradicated (at least for one person!). You’ll also notice reduced car costs, including parking tickets and fuel.
When you now compare the two finance plans, you may find that things aren’t as bad as you initially thought as there are many ways that you can save money with just one of you working, particularly if you put further plans in place.
Make a Budget
With a reduction in income, now’s the time to look where you’ve perhaps been a little more frivolous than you maybe should have been and the areas that you could reduce your monthly expenses. Look at how much you’ve spent on dining out, smoking cigarettes, drinking and going to the movies, as these are all additional things you could stop doing, or reduce, until you feel more financially stable again.
Finally, remember to talk among yourselves about the situation, communicating your thoughts, concerns and hopes, so you can work through this together.
Elise Slater writes about a variety of topics which get published online. She writes about family life, and things that effect them, sharing her knowledge online with others.