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Published:July 31st, 2009 23:49 EST
One Family, One Income

One Family, One Income

By Matthew Vossler

The debate rages on, as to what effect two income families have on the children. One thing seems obvious, for most families, if one parent can stay home with the children, overall stress in the family is reduced.

I have taken some liberties with the exact truth in the following senerio. I did this only to better illustrate my philosophy on matters of money. I must also add, that this philosophy is one that I do not always follow myself, usually to my detriment, whether it be from contention with my spouse, or my own feelings of guilt. Anyway, striving for perfection is my own hang-up, and I don`t recommend it.

When I was growing up in suburban Maryland, I had a friend who was different from the rest of the kids. We made fun of him for being can be cruel. As teenagers, we would go out to the malls, fast food restaurants, record stores and concerts, and spend our money, just about as fast as we made it. But Alex would always opt out when spending a lot of money was on the docket. We would try to coax him to go along with us, but he always-remained firm.

Fast-forward about 15 years, and Alex at 30 was retired, at least from a 9 to 5 job. Now, people don`t make fun of him about how he saved his money and lived within his means. If anything, people admire, and some envy him for it.

I on the other hand, had to learn the hard way about living within my means. I had a negative net worth by the time I was 30 and had to scramble to correct the problem. Since then, I have not only been living within my means, but have been able to save, thanks in part to my wife. And when we made the decision for me to become a full-time father, my wife and I were faced with figuring out a way to continue to live within our means and save for the future. In short, we had to do something that most of the rest of the country was not doing, and indeed, our capitalist system seemed to actively discourage.

During my years of being an at-home dad within a one income family, and being business minded and educated in management, I had the chance to reflect and learn how to make one income work.

The following tips are some of what I have learned:

The word procrastination has gotten a bad rap. I am going to tell you how you can make procrastination work for you. When you feel the urge to buy something, procrastinate until the need to buy it is screaming at you, and it becomes very apparent that you really need this particular item. More often than not, you will realize, in the light of day, that you don`t really need that painting of dogs playing poker, or that dish soap dispenser that comes in the shape of a lava lamp, or the lava lamp for that matter. Yes, I am talking about impulsive buying decisions.

Understand the value of things: make comparisons that make sense for you. For example, not buying this item will allow me to purchase a week`s worth of food for the family.

Pay yourself first! Before you pay the butcher, baker and candlestick maker, pay yourself first. I am speaking about savings and investing, and preferably a minimum of 10% of what you take home. Many a fortune has been amassed with this kind of discipline. Remember Alex?

When you are about to buy something, ask yourself some questions:

Is this really what I need, does it make sense or is it going to do for me what I think it will. Honestly reflect on your experience/results from the last time, if it is a repeat purchase. Ask yourself, did it do what I thought it would?

Is this something that I can do myself or make myself, or is it something that can be done with, for example, tools that I already have? In other words, is that new and improved gizmo really an improvement, or is it something I can do without? Keep reminding yourself the opportunity cost of spending money. There is always an opportunity cost to spending money, or in making any kind of decision, for that matter. The opportunity cost of buying item A is that you cannot therefore buy item B or C.

Can I get this item for free? For example, going to the library to get a book, video, etc. Or instead of buying a book, can you read about it on the Internet? Also, ask yourself how you can get something for less; i.e. packing a lunch instead of buying out, and don`t forget clipping coupons!

Be aware of sales techniques that often work to make us buy something we do not necessarily need.

One thing that the marketers of the world count on is something called brand loyalty. I make a point to not have brand loyalty. I buy what I think is the least expensive, all other things being equal.

Make yourself aware of some of the marketing terms and tricks of the trade, such as, up-selling, add-ons, instilling a sense of urgency in the buyer, bait and switch, and be aware of pain/pleasure techniques. Another thing that salespeople often count on, is their, shall we say, pleasant looks, or if over the phone, voice.

Be also aware that agents, such as real estate agents, have a financial motive to selling you the biggest and best for which you qualify. When making purchasing decisions of this magnitude, try to stay objective. Keep in mind the other things you may want to do with your money, such as private school for the kids, decent vacations, or even saving for retirement.

Finally, here are some ways that our society and the government we elect, actively encourages us to spend, spend, spend.

For example, there are tax incentives to buying an even more expensive house, after selling your current house, which by the way, has most people strapped for cash in the first place (`s called being "house poor").

Another example, of course, is the constant barrage of marketing of products and the integration of this consumerism into our entertainment. We see our favorite movie or television stars with all the latest stuff, and naturally we sheep, want it too.

The federal income tax, as opposed to a national sales tax, like Europe uses, also encourages more spending.

Alex explained it to me like this:

"I am clear about what I want and why I want it. You can call this self-awareness. Keep in mind two of the biggest reasons why people buy something. 1. To get something you cannot or do not have the time to do or make for yourself without a monetary exchange, and/or 2. To change the way you feel. Neither of these reasons is in itself bad. It becomes troubling however, when one falls into a continuing pattern of buying things one doesn`t need, make sense, or worse, cannot afford."

The silver lining for those of you who are living on one income for the sake of the kids, is to just keep reminding yourself, the kids will inevitably grow up, and you will again have more choices regarding your income. And hopefully, in the mean time, your kids will grow up to be well-adjusted adults who do great things and are grateful for your sacrifices.