To ask if you can afford to live on one salary?

[coffeeforone]

I'm currently on mat leave and due to go back full time soon. DH found out last week that his job is at risk of redundancy.

We need to do the sums to work out if we would be able to manage on one salary in the short-medium term and if not, what cutbacks we need to make.
I was chatting to a family member earlier who is very shocked that we do not already know with confidence we can live on one salary and should already have been living within the means of the lowest earner in case of this eventuality.

AIBU to this it is ok to need to spend more than one salary if you both work?

It is perfectly possible, provided of course that the person working is earning a good salary.

We did it as I gave up work when the children came along. I felt very strongly that I didn't want them brought up by nursery staff or a childminder, but that I wanted to be home with them full time.

Also, we had more than one mortgage as we had started to buy properties around that time to rent out as an investment for the future. It was a bit of a struggle at times, but generally it worked out very well as the rentals paid for the mortgage, and of course the properties increased in value over the years.

Single mum here... it has to!

At one point we could have, after I received a promotion. I offered DH to be a SAHP (he was off work due to an injury & my parents had been helping out up to that point) but he said he really needed to go back to work. Not just for the family, but for his own self-esteem. Plus, he said being a SAHP was too hard!

Thing is, it would have been a skint, bare-bones, penny-pinching, any-emergency-would-have-been-a-disaster life. And who wants that, really?

We manage on one salary because dp earns a good wage (well, I think it's good, it's crap by mn standards!!!).

Does your relative really think that in a household with two earners on, say £30k and £20k they should live on £20k? Unrealistic if they're saying they should live on the lower earners salary.

I know of a few friends who have lived on the higher earners salary alone for a few months/ a year to save up for mat leave or a specific large purchase but not forever.

We could manage "normal living" on either one of our salaries, except we currently send our children to private school, and both salaries are needed for that. I suppose we could probably use up savings to take them to the end of their schooling, but we'd never be able to amass significant savings again if we were living on one salary.

But once they've left school, then yes, either one of our salaries would allow us to live a reasonably comfortable, but not excessive life. That said, we're mid-late 40s now, so perhaps further along in our careers than many.

Not without benefits topping us up, no. Bills wise we could cancel around £30pm of subscriptions but nothing else we could amend there. We don't have sky etc or cars on finance that we could cut back on for example. We'd be left with around £300 for food, petrol, clothes etc with one of us out of work.

We could live on both DP and mine alone actually quite well. He's on a six figure and I am on 70-80k depends on the month/if there are any bonuses etc.

However none of us would give up work willingly (only God forbid illness related or mat leave in my case)

Well, that would be nice, wouldn't it?

But not possible in our case for anything other than short term.

In the short term, we could pay the mortgage, council tax, utilities, broadband & mobiles, essential insurances etc., and groceries and petrol, and put by money to tax the car, etc.

But we'd have to cut things like pet insurance, holidays, entertainment, buy no clothes or 'stuff' for the house, be very frugal with birthdays and basically stop paying for non-essentials. Which is unsustainable in the medium-long term.

However I guess there would be a redundancy payment, we have savings in case of "oh fuck" moments, and we would be looking for jobs - even NMW jobs - to supplement all that. So I wouldn't touch the "oh fuck" money unless it was desperate, and that means chopping all the other expenses first.

I'd certainly consider childcare - your nursery bill - to be a luxury if one parent was at home and available to do childcare. So your relative is bonkers on that point alone, as even though we have savings I wouldn't spend them on that over Dad being home to look after them.

Aiming for six months savings of frugal living seems more sensible than within the income of the lowest earner.

It could be useful as a savings exercise though I guess - spend six months just banking the top earner's salary entirely (if possible), before returning to normal expenditure.

I'm quite a fan of financial 'crash diets' though. I.E. every other month skip all unnecessary spending.

If I lost my job, we could probably survive for a short time VERY skint for a couple of months on DPs salary. However, not the other way around.

We have discussed this many times though, as both of us would just go out and get any job we can in the meantime whilst job hunting to continue bringing in money.

I earn 4 times DHs salary. If we lived within his means, what the heck would we do with all the cash piling up?

We actually earn quite similar amounts, so I think the relative was referring to our own circumstances referring to the lowest earner (which at the moment is DH as I've just had a pay rise).

In answer to a couple of questions upthread:

Yes, they are of an older generation where the majority of families lived comfortably on one salary!
DH has worked there 10 years - not sure if the details but should get redundancy at least equivalent to a good few months pay.

We do and always have done (salary ranging from about £20k up to £70k odd...he likes change 😂) because I've been at home. When I go back to work I'm hoping we can save what I earn...may be a while though as youngest is still a baby. We've always said we wouldn't spend up when salary has gone up, but it doesn't always work.

No we couldn’t live off just one, mortgage and bills is one persons salary childcare is another’s and basically wiped out.

Single parents live on one salary......

I'm guessing your relative is a bit on the older side OP?

My grandfather is fond of saying "live for a month on what you earn in a week" but fails to recognise that that's not possible in today's world - when I was renting my rent was more than 50% of my monthly wage.

We have always lived on one salary regardless of the work situation. We deliberately bought a house which was way under budget (big, with sea views but needed a lot of work) so one wage could cover the mortgage easily and are slowly chipping away at re-decorating/changing the bits we don't like. Before we had children, the 2nd wage was for extras (added holidays on top of the ones we always take etc)/savings/indulging my book buying habit and whilst dh's parents throw money at us (and his sisters), we could manage perfectly well as a family of 4 without it. I'm currently a SAHM and our bank balance is going up, not down .

However dh's wage is higher than most of the ones I've seen quoted in this thread and we live in a rural bit of NE Scotland (close enough to 2 cities though).

Yes we could comfortably. That being said, DH and I are high earners but we also live on an island with an astronomically high cost of living, so even if we "could" live on one salary, our standard of living wouldn't be worth remaining.

We tried for about 6 months after my maternity ended and it was utterly miserable.

We had a high mortgage and even though DH earns a reasonable salary after household bills, two cars, food, clothes and other essentials we were literally left with pennies at the end of the month.

If we were to do it long term we would have to sell one car and downgrade the other, budget about £30 a week for food and completely forget any idea of saving. I don’t know what we would do if the boiler packed up or how we would afford Christmas etc.

I really admire families who make it work, however, we would have to move and sell most of our things to get by.

It depends on your income and outgoings, I suppose.
You could be in your early 20s, married with a small baby with no savings, paying a large amount for rent or mortgage, and both on lower than average incomes. Or you could be in your late 30s of 40s with established careers with a steady, high salary and plenty tucked away.

Assuming the couple both earn the average wage. Around where I live, just over half the average take home pay of one person would cover the rent and council tax (based on family of 2 adults and 1 tiny child in 1 bed maisonette). Could a couple live on £945 per month? They would have utilities bills, childcare, food, clothes, commuting costs and so on to come out of that.

Anyway that is based on both earning the average salary.

We could on just his salary. Not on just mine. We could pay mortgage and council tax only on mine.
But, I've squirreled away savings and dividends over the years (I'm tight) and he's got nearly a years salary in savings, investments.
If we had to sell up, we live in the nicest area of a shithole town with alot of equity.
We're not high earners at all, but we'd be ok for a bit.

Sure, if we had to, we could survive. But it wouldn't be much more than that. And we'd both need and be eligible for state financial support.

chatting to a family member earlier who is very shocked that we do not already know with confidence we can live on one salary and should already have been living within the means of the lowest earner
With respect, your family member sounds ignorant and out of touch.

That's quite an old-fashioned view and unlikely to apply to many couples nowadays, unless one of them earns enough for the other to be a stay at home parent. My parents did it with relative ease in the 80s/early 90s, but their housing costs were far, far lower - they were hugely shocked by how big our mortgage is for a small three-bed.

We both earn about the same and could just about manage on one salary but it would be very, very tight. We'd have to cut out all luxuries (and I'm including non-essential insurances in that) and eat extremely basic food. We would be miserable.

We have taken steps to avoid it happening - we have savings, I would get a very good redundancy package if it came to it, and we could both freelance as we've worked on those skills to give us a safety net. Our only debt is the mortgage. Short of moving to a completely different area or a much smaller place to live, we've done all we can.

And what are you supposed to do with the rest of your money? Sure save some for a rainy day but most people are working to pay the bills or for a better standard of living.