This is a branch off of the other thread about spending habits if your income doubled:
From reply #85 of that thread:
We did this, when D was born & I decided not to return to work. What did we do differently? No meals out, no ski trips … I shopped very carefully for groceries, and I found recipes that included low-cost-but-nutritious ingredients … cut back on H’s retirement savings (just put in what his company would match) … shopped at resale shops for kids’ clothes & didn’t buy myself/H new clothes … bought in laws’ (very) old car when we needed to replace a car … did our own car/home repairs … whatever we could do to save money. Our kids had everything they needed and most of what they wanted, and H & I were fine. We survived just fine. Of course,our jobs paid a decent salary … not executive pay or anything, but not $10/hour, either. It would have been much harder if “half” was half of a lower income.
Cut house cleaner and other outsourced maintenance tasks. Ramp charitable giving way down. Be more frugal with vacation spending. Cut retirement contributions (started funding in our 20’s which would make this possible). Eliminate household upgrades (e.g. replacing old flooring). Sell off children. 
On a daily basis, not much would be different for me. I’d cook at home more. Switch from the nicer more expensive gym back to the YMCA. Probably stop paying Orkin for pest control and do the perimeter and yard treatments myself. H has an online game he loves that he regularly spends money on and he’d have to cut way back on that. Lawn service is a tough call; when we moved to the area we never bought any big lawn equipment (mower, weed whacker) so if we stopped paying for the lawn service we’d have to shell out money for the equipment. Would have to compare the upfront cost of the equipment to the cheap weekly cost of lawn service.
On a longer term basis, we’d keep cars for a lot longer. H and I got new cars in 2016, and S drives a 2009 Honda Accord. We had told S he could have one of the 2016 vehicles when he goes off to college (and we’d trade in the 2009 for a new car for us), but with half our income we’d probably have to renege on that and give him the 2009 instead. We haven’t traveled much in the past couple of years because of scheduling issues, but going forward money would also be a consideration for travel. We’re planning to move closer to H’s job once S is in college, and with 50% reduction in income we’d choose a different area and look for a smaller cheaper house than we currently have, to reduce property taxes and operational expenses. We’d been planning to move to a really desired area very close to his office but the homes are more expensive than our current home, so we’d have to give up that plan. Or we might avoid the expense of a local move and just stay in our current house with the long commute; we have no mortgage and we could easily afford to continue living here with half our income.
DH and I are doing it now that I left my job.
We downsized a couple of years ago and banked the money from our old house.
We got rid of our Obamacare health care plan and switched to an HMO
We quit our expensive club and joined 24 hour Fitness.
We eat out only on special occasions (but then feel free to splurge - so they’re GREAT and memorable meals.)
I don’t buy books (big library user) and we don’t go out to the movies (but lots of Netflix.)
We’re considering getting rid of our TV subscription and getting a much cheaper streaming service.
We drive old cars that were inexpensive to begin with, and paid for in cash. (Sigh… honestly, I hate my car, but hate the idea of buying a new one even more.)
We can do all this because our children are on their own and because we have all the “stuff” we need. The house we have also needs relatively little in terms of upkeep, and with mostly just the two of us it’s easy to clean. DH mows the lawn, I maintain the garden.
Things we haven’t given up: skiiing (we buy a multi-use pass) and travel (off-season, usually on mileage, usually to inexpensive places, always staying in modest accommodations/with friends/relatives.)
We’ve done it before – DH quit his job to go back to school and I supported us on @$20k/year. Back then, we got rid of the second (used) car, saving gas, insurance and loan. Paid off some of our small student loans in advance so we didn’t have to make monthly payments on a small income. Moved to within walking distance of his school, which was also a quick public transit commute to my office. (Rent was cheaper than the burbs.) I wasn’t able to put much in retirement funds (but I was in my 20s and never withdrew what did get put in, so appreciation has done well for me.) I had company-provided life insurance, so we weren’t paying premiums on both of us for individually held policies. We didn’t have a sofa, a headboard, or color TV. DH’s work desk came from a sale at his former office where they were selling off old equipment. My sewing chair (which dates to the early 60s and which I still use) cost $5. We had some of my college apartment furniture – I’d bought it all from a friend for $125 when she moved from GA to TX. We didn’t eat out often. We used our wedding gifts (pots and pans, canisters, knives, dishes, microwave, linens, towels) so we didn’t have to buy that stuff. We took one vacation a year to visit friends in CA, who were kind enough to put us up. Any other trips were driving many hours to visit family. We volunteered to be bumped on flights to earn free tickets for future travel (and we used to make out like bandits in that score!). I sewed my work wardrobe and made every curtain in the apartment. It was actually a really happy time in our lives – we walked out at Valley Forge NP several times a week, planning and discussing, and we had a real sense of teamwork. Being on the same page made it easier to economize.
We did it again when I had to leave work due to medical stuff. I wasn’t making half our income, but it was the chunk that represented about half our EFC. We wound up taking a HELOC to cover that piece for S2’s last two years. Since we had never tapped into our equity over the years, those funds were there and the amount was small enough that it wasn’t a big monthly payment.
Now, I look at income replacement numbers in retirement and think that 50% of our current income will be fine, since we won’t have retirement contributions, additional $$ going to savings, several hundred a month in life insurance premiums (which we carry now in case something happens to DH before we qualify for pre-retirement medical coverage, because I am VERY expensive), we won’t be paying SS, the house will be paid off, etc. DH will have a pension, plus our SS and 401ks. About 2/3 of the projected income replacement is regularly monthly payments with some COLA, so we aren’t as dependent on good market results for day-to-day income. We’ll still do some traveling, but we are trying to front-load that now since we don’t know what my health will be down the road.
That said, it looks good on paper, but I totally get @NorthMinnesota when she talks about cutting back on things already. I worry that we are relatively cash-poor outside of retirement investments. I also suspect the idea of “spending it down” without replacing the funds will give us pause about spending in the first place.
I would retire! I will be doing this in about 4-5 years. But retirement means “another job” in a significantly lower cost of living area. The houses will be 20% of the cost. No 400$ train tickets every month. Car insurance will be less than 1/3. No state taxes!
Then once I am used to that level (less than half of current), I’ll retire.
Hmmm…a lot would depend on how the health insurance panned out. Would we get subsidies then, and if so, how much?
We’d probably have to get rid of the third car, the one the kids use when they are home. Or, see if we could get something used for cash.
Our ability to save would be scuttled if our income were cut in half. We’ve been there, and it was keep your head above water times.
We are already neglecting our underwater home in favor of paying down a Parent Plus Loan ASAP and putting money in savings. On half our income? I’d seriously considering letting the house go and getting an inexpensive apartment in a decent enough/safe enough neighborhood.
Yep, but would have to tweek some things as 60% of our income now goes into savings/investment accounts. We could give up the savings part as H will get a very healthy guaranteed pension when he retires - so other savings we do is pretty much gravy and we couid stop that completely now and be fine.
If our income were halved, we’d go back to living the way we did before it doubled, but save less and perhaps have to draw down on savings as needed. We’d eat out much less and travel less and gift the kids less.
We did this in the last year because my husband lost his great paying job and at 54 it’s harder and harder to find those exec jobs–and we wanted to focus on enjoying what we had rather than feeling like we were digging a deeper hole.
The main thing we did was move into a smaller rental property that we owned. The mortgage on that is …well, my husband says it’s the lowest mortgage payment he has ever heard of (and will drop by about 25 % next year when PMI goes off-woo hoo!!). The place is smaller, no pool or paid landscape maintenance, less utilities. And we of course put nothing into savings…as opposed to before when we were saving substantially every month. We think harder about money for extra activities/extra cirricular trips for the kids but they have all been able to keep up their primary activity. We’ve tried to taper off gifts to other adults…I’d prefer just to gift the kids/nephews/etc. for holidays and birthdays.
This is a hard one for me. I rarely go out to eat (last time was seven months ago), I spend approximately $30 per week on groceries and household items, I don’t drink, I don’t belong to a health club, I don’t go to movies, I rarely buy clothing, I rarely travel (last time also was seven months ago). (Yes, my life is very boring.) I’d cut contributions to retirement and savings, I’d get rid of cable, and I’d ask my ex to pay for our older daughter’s health-care expenses (or to share more of them). I’d have more no-driving days. I’d hope for good weather, so I could get by without the furnace or a/c.
We would have to downsize, buy a smaller house in a different area. We’d also need to return our younger kids to public school. I might actually have to quit my job and homeschool my special needs child if I expect him to have any sort of future.
We sort of did this several years ago. I had been in a horrible, high-stress job, living away from home during the week for the privilege. When I quit the job, we:
- Stopped paying $500 a month for the room near the job
- Sold the house and bought a smaller one nearby so we didn’t have to pay a mortgage anymore
- Stopped saving (I was already 64 at that point anyway)
- Pretty much stopped eating out and paying to go to movies
At first I got some contract jobs to fill in the gaps (and I continue one of them to this day) but as we got older, we became eligible for Medicare (huge savings!) and DH has started to collect my spousal SS benefit. It’s all worked out.
That’s what’s kept me in my bad marriage. We have no real nonessential spending now. My vacations are both freebies so all I pay is gas to get to the retreat center, my $10/month gym membership replaced physical therapy. Usually eat one meal a day now so can’t cut food budget!
When I move out to start my chaplain residency my personal income will drop by a third and I won’t have his. I looked at what’s available now and saw rooms for rent near the hospital for fairly cheap and the hospital discounts meals for residents. Hope a room available within walking distance of hospital. So I should survive. I’ll stick up on business attire now by adding extra home care hours and buy classic instead of trendy.
After losing my second job this past week, if I had to survive on my one job alone I wouldn’t be able to do it without assistance. Even bleaker, the company I’ve worked for for 25 years was put on the market to be sold three months ago and we are all just holding on by a thread. So, essentially, this “pretend situation” could very well be me in the next week or two. On a more positive note, I have never been without a job since I was 14 and can do lots of things, just not things that pay well, but certainly enough to keep food on the table and D in college. I have been searching for a career position for three months but haven’t secured anything to this point.
Good luck, @NEPatsGirl and @KKmama.
I’m chuckling because the growth in my practice means I was living on roughly half my current income three years ago. It’s a recent memory instead of a theoretical question. Our lifestyle hasn’t changed much, except that we eat out more because I have less time to cook.
Good for you, Hanna. Now I just have to ask…Did you marry that professional gambler? I would imagine that would lead to some ups and downs in income.
Prayers for KKmama and NEPatsGirl.