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Why Families Should Live on One Paycheck


Live on One PaycheckWow, a lot has changed in 5 years since I wrote this post. In 2011, I was very unhappy with my job and I needed to make a drastic change. We saved as much as we could and cut back our spending to prepare for my early retirement. A major part of the preparation was to save all of my earned income. This gave a big boost to our dividend portfolio and cash savings. It also let us test if we could really live without my paycheck. I’m happy to report that this has worked out very well. The test run prepared us for the lower household income and we kept our expenses moderate since then. If you have two incomes, I think living on one paycheck and saving the other is a fantastic idea. Every household should work toward that. Here is how we gradually moved to living on one income.

  • Age 22 – 25: I was single and saved mostly through my 401k and Roth IRA. I maxed out those accounts and invested in my brokerage account a little bit.
  • Age 25-33: I got married. Mrs. RB40 was earning some income, but I was the main breadwinner. We continued to max out our 401k and Roth IRA. We also saved more in our brokerage account. I didn’t track our finances closely in this period, but I’m pretty sure we saved more than Mrs. RB40 brought in. So we were already living on one paycheck early on. We saved a little less when Mrs. RB40 took a couple of years off to get her Master’s degree.
  • Age 33-36: The golden period of our earning years. Mrs. RB40 got a steady and well paying job after she finished her Master’s degree. We were living modestly and saving a ton of money as a DINK couple. Having two solid incomes and no kid was awesome. Coincidently, this was the trough of the last stock market crash. We invested a bunch of money during these down years and it paid off when the market recovered. We also started investing in rental properties.
  • Age 36-38: The end of DINK. We had a baby and our expenses shot up. However, we also made financial independence our goal. We cut back in other areas and were able to save all of my income in preparation for my early retirement from engineering.
  • Age 38-42: I quit my job and became a stay at home dad/blogger. Our preparation paid off because we continue to save over $50,000 per year and still enjoy a comfortable lifestyle.

This progression looks normal to me, but it seems very different from the average household who has a lot of difficulties with saving. We steadily increased our household income over the years and we also increased our saving rate. On the other hand, the average family seems to increase their spending in step with their income, while neglecting to save. Our earned income is lower now, but we have income from other sources to help supplement that. Eventually, Mrs. RB40 will retire early and we will transition from living on one paycheck to living with no paycheck. Here is what I envision.

  • Age 42-46: Increase our non-job income and continue to save and invest. Mrs. RB40 transition to early retirement or part-time self employment at some point.
  • Age 46-55: Hopefully, our passive income and part-time income can cover our expenses during this period. We won’t add much to our retirement savings, but we won’t touch it either. This will give our investments a chance to grow.
  • Age 55-65: Ramp down on work and start withdrawing from our retirement funds.
  • Age 65+: Social Security kicks in, so our withdrawal rate should decrease a bit.

The next few years are crucial because we’ll have to figure out how to cover our expenses without Mrs. RB40’s W2 income. I think it will be pretty easy if she can transition into part-time work. However, we’ll probably have to cut back on the expense side if she doesn’t have any income. I’m optimistic that we’ll figure it out.

Live on One Paycheck

To wrap it up, I think every families with two incomes should aim to live on only one income. This will give you a bigger cash cushion that you can invest and generate passive income. It will help you keep a lid on lifestyle inflation, too.

What is your situation? Dual income no kids? Dual income with kids? One income? I’m curious to see what everybody’s situation is like. If you have two incomes, can you live with one paycheck?

Image by ANguyenPhoto

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Joe started Retire by 40 in 2010 to figure out how to retire early. He spent 16 years working in computer design and enjoyed the technical work immensely. However, he hated the corporate BS. He left his engineering career behind to become a stay-at-home dad/blogger at 38. At Retire by 40, Joe focuses on financial independence, early retirement, investing, saving, and passive income.

For 2018, Joe plans to diversify his passive income by investing in US heartland real estate through RealtyShares. He has 3 rental units in Portland and he believes the local market is getting overpriced.

Joe highly recommends Personal Capital for DIY investors. He logs on to Personal Capital almost daily to check his cash flow and net worth. They have many useful tools that will help every investor analyze their portfolio and plan for retirement.

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{ 109 comments… add one }
  • LifeAndMyFinances July 20, 2011, 3:53 am

    Great job living on one paycheck! My wife and I are striving toward this goal (we’ve done it before) once we move into our house.

    The great thing is, while we will reduce our expenses to the amount of her day-job, we both have side-gigs as well that bring in quite a lot of money. So, even if one of us loses our jobs, it’s going to only be a 25% loss in our total income.

    Good luck finding that 4-plex! I can’t wait to read about it!

    • retirebyforty July 20, 2011, 2:57 pm

      Good luck on getting back to living on one paycheck! Wow, that’s great that you two are bringing in multiple streams of income. You’ll have that house paid off in no time.

    • Fiscally Free June 8, 2016, 8:14 am

      Sounds like you’ve got some pretty sweet side-gigs. Mind sharing what they are?

  • Jana July 20, 2011, 5:34 am

    We’re 2 incomes with 1 kid. We’ve tried to plan a budget for 1 income but right now, with our current debt load and expenses, it’s not feasible. Once a couple of debts are permanently removed from our life and our daughter starts school, we could do it. It would be tight but not impossible.

    • retirebyforty July 20, 2011, 2:58 pm

      I know what you mean. With 1 kid, the day care cost already made it impossible to live on one pay check (now that I’m back at work.) If one of us stay home, that cost will be gone though.

  • Moneycone July 20, 2011, 5:43 am

    Love that word – DINK! The rental home refinancing was pretty slick RB40. Exploring REITs is another good option for some stable revenue. The housing market being where it is, this a good ‘buy low’ moment.

    • retirebyforty July 20, 2011, 3:00 pm

      Doh! I missed the opportunity to make a bunch of acronyms. DINK, DIOK, SINK, etc… That’s what happens when you write a post at 10pm. 🙁
      I’m beginning to think REIT is the way to go as well. You don’t have to deal with tenants and their issues…

  • Kellen July 20, 2011, 6:16 am

    Yeah, but if you have a parent staying at home, then you save $3,000/month on day care!

    I get the impression you’re not really going to be “Retired” by 40, just pursuing money from other sources than your regular day job 🙂

    • retirebyforty July 20, 2011, 7:42 pm

      You got it! I’m just retiring from my corporate job. 😉

  • LLF July 20, 2011, 6:17 am

    Traditionally, a lot of women stay at home during the early years of starting a family. It makes financial sense to stay home and watch 2 or 3 kids instead of send them to daycare. After the kids are all in grade school, some women start going back to work at least part time. So if you are having more baby rb40s, go for the stay at home dad thing. Plus, who says you can’t earn some side hustle on the ol’ interweb?
    We are DINK and have 2 kids, one in will be in school this fall (thank goodness). We used to live on one paycheck and save the other, but not so with kiddies. Once they are in both school (public) then we might go back to that again, I hope.

    • LLF July 20, 2011, 6:40 pm

      we were DINK, I mean to say

    • retirebyforty July 20, 2011, 8:16 pm

      We are not planning to have anymore little ones, but I’m planning to be a stay at home dad in a few years anyway. 🙂
      Good luck getting back to living with one paycheck. From what I heard, kids just get more and more expensive as they get older….

    • David @ VapeHabitat July 26, 2018, 11:20 am

      My situation – 2 kids, 2 good jobs giving us $100K in savings per year. Still don’t know whether my kids need a degree or not

  • Everyday Tips July 20, 2011, 6:53 am

    We have been everything: DINKS, double income kids, single income 3 kids, 1.5 incomes 3 kids, etc. I am working part time from home for a company now, plus I blog. The money I make is used for savings and vacation, we do not pay fixed or most variable expenses using my income. When I had 0 income, we got used to living on one paycheck, and have kept that mentality even when I did go back to work. My ‘real’ job is variable based on the project I am on. I work a year or two, take some time off, then they call me back if they have another project, etc. Works out good. But if I am off for awhile after my current project ends, we will be fine.

    • retirebyforty July 20, 2011, 8:18 pm

      So you are living on one paycheck now. That’s great! You are expanding your online empire anyway so maybe you won’t have to go back to the part time job one day.

      • Everyday Tips July 21, 2011, 5:36 am

        I am in ‘part time’ mode right now, so I we get a paycheck and a half. Having the ability to be flexible is a wonderful thing.

  • Financial Success for Young Adults July 20, 2011, 7:30 am

    I’m single so I definitely live on one paycheck lol. But my goal is to eventually live on only half of the paycheck and then be able to generate enough passive income to support my shopping addiction 🙂

    • retirebyforty July 20, 2011, 8:19 pm

      That’s a great goal, but shopping addiction is going to take more than passive income to satisfy. 🙂

  • No Debt MBA July 20, 2011, 8:45 am

    We’re DINKs, but we keep separate finances so it’s more like we each live on half of our paychecks rather than spend one and save the other. We make similar amounts so it’s effectively the same thing. Saving 50%+ is such a great financial tool and we’ve found it gives us a lot of flexibility and peace of mind.

    • retirebyforty July 20, 2011, 8:22 pm

      If separate finances work for you, that’s great! It’s awesome that you are still saving 50%+. Sometime I feel separate finances make you want to spend more money since it’s your portion.

  • Henry @ TotallyMoney July 20, 2011, 8:50 am

    I am definitely a DINK at the moment and we can live on one paycheck, but it wouldn’t be that pleasant. We are trying to save the second income for a deposit on a house, but it is taking a lot of discipline. We should really get into a situation that we can live comfortably on only one income. I am working on a second income stream, but it will be quite a while before just one person working would be a desirable situation.

  • Crystal July 20, 2011, 9:21 am

    My husband and I are still DINK’s. For about 4 months, we had triple income, no kids, but I have left my day job now (woot!). He makes $47,500 a year before taxes and it looks like I am making $36,000-$60,000 a year before taxes (I’ll have a better idea by the end of the year). We live on about $38,000 a year after taxes and save the rest. We’re hoping that we’ll be able to retire early at age 52 this way.

    • retirebyforty July 20, 2011, 10:26 pm

      Triple income no kids sounds like a dream!!! You guys are doing so well. I bet you can retire before 52 since you are putting away so much each year.

  • Barb Friedberg July 20, 2011, 10:25 am

    You can do it!! Like anything else, once you adjust, it’s no big deal. You will be amazed at the ways your investments will grow and how you may find other avenues to bring in some cash.

    • retirebyforty July 20, 2011, 10:27 pm

      Thanks for the encouragement! It’s just going to take a little time. 🙂

  • Lindy Mint July 20, 2011, 12:23 pm

    We had big plans for being DINKS, but six weeks into marriage, we botched that one. 😉
    So we’ve been rocking the DIWK plan for a while now. My dream is to quit working when my kids reach their early teens. It’s backwards, but I want to be around when they start to get wise and mischievous.

    • retirebyforty July 20, 2011, 10:29 pm

      Haha, it happens. 🙂 Hope you can achieve your dream!

  • Andy Hough July 20, 2011, 2:14 pm

    We are dual income with one child living at home. Our combined income is still pretty small so we both need to work. However since we are both self-employed and we have a lot of flexibility in when and how much we work there isn’t really any point in one of us not working. We plan to semi-retire and travel around the country after the youngest child graduates high school.

    • retirebyforty July 20, 2011, 10:30 pm

      That’s great! I wish I could work flexible hours, but we just can’t do it with our job. Hopefully, I’ll be self employed some day so I can spend more time with our little guy.

  • krantcents July 20, 2011, 4:33 pm

    We are a dual income family with grown up kids! Since we max out my 403B, IRA and Roth IRA, we almost live on one pay check. It is not that hard because we no debt except for a small mortgage. We have a lot of flexibility and have a pretty low profile lifestyle.

    • retirebyforty July 20, 2011, 10:31 pm

      Excellent! It must have been a nice boost to your income once your kids are grown up!

  • SB(One Cent At A Time) July 20, 2011, 8:42 pm

    we are a single income family and live in one pay check, still we can save 50% of the salary. Good advises

  • Miss T @ Prairie Eco-Thrifter July 21, 2011, 8:10 am

    Congrats to you for living on one paycheck. That is awesome!! This is one of our goals. We would like to use one paycheck for expenses and the other strictly for savings. We haven’t quite gotten there yet but we are on our way. Hopefully within the next couple years we can start this.

  • Ginger July 21, 2011, 8:20 am

    My DH and I live on one income and use the side incomes (including my part-time job) for extras and savings. Last year we used it to save for our wedding, this year (and hopefully from now on) it is going into retirement and savings. Living on one income can be such a relief, if helps shield you from financial problems and down turns. I am not sure that is possible to do when you have kids and daycare, part of the reason many women stay home, but until then I am going to save as much as we can.

    • retirebyforty July 21, 2011, 10:19 pm

      Great job! I’m glad to hear you are saving as much as you can now. When you have kids, it’ll be a lot more difficult. 🙂

  • Broke Professionals July 21, 2011, 10:54 am

    We are DINKS (but planning to start a family in the next year). We ran a quick back of the envelope calculation to see how much I have to make from my blog to take some time off without affecting any of our goals that we are saving for. If we move away from California, it would work well, but in CA we need a lot more. I have to do a real calculation with tax, 401k and everything we take before tax into consideration as well. Because I want to continue putting away as much as we put now into retirement even if I quit.

    You have developed a good cushion with real estate and investments. Great work!

    • retirebyforty July 21, 2011, 10:20 pm

      Yeap, CA is expensive. Thanks for the complement.

  • Jeff @ Sustainable life blog July 21, 2011, 12:25 pm

    Keep up the good work and soon you’ll be able to retire! You’re getting so close. Have you looked into buying a larger house and converting it into a duplex/4plex yourself?

    • retirebyforty July 21, 2011, 10:18 pm

      Not really. That sounds like a lot of work and I am not especially handy so….

  • Matt Wegner @ Financial Excellence July 21, 2011, 1:34 pm

    We’ve never been DINKs. Always lived on one income and did well with two kids. We’re debt free now so it makes it a lot easier to do but living within our means has always been a part of our lifestyle. I’m looking forward to becoming DINKs when the kids move out of the house!

    • retirebyforty July 21, 2011, 10:21 pm

      It’s great that you are debt free. Not many people can say that these days. 😉

  • Freddie @ Invest With Passion July 21, 2011, 2:12 pm

    This is a great goal you have here. We are a two income two kid household. Working on living on paycheck, but not there just yet. I am hoping to get my blogging and web design profit high enough this year to make this dream a reality.

    From there the goal is to remove the need for web design and live just on the blog revenues from anywhere in the world. Closing in, but have a way to go. Just need to increase my efforts (doing a bit of outsourcing now) and we will see what happens.

    Best of luck to you!

  • Money Reasons July 21, 2011, 6:46 pm

    We never had our money stream in synch until the last 3 years before my son was born, and even then, we saved up our money for an over 20% downpayment on our house.

    After my son was born, my wife didn’t want to go back to work, so money has been tight for a while. There were a few years that he had to skip vacation. But now that has all changed and I’m going for a more balanced lifestyle…

    So for the past 10 years (or so) we’ve mainly have been a 1 income household. My wife did pick up a job for spending money though (she now works 8 to 10 hours a week as a bookkeeper/accountant).

  • The Passive Income Earner July 21, 2011, 8:33 pm

    We are a 1 income 2 kids and have been for over 10 years. I have never experienced the dual income … Soon though. That’s going to be the gravy train 🙂

  • youngandthrifty July 21, 2011, 10:57 pm

    I love the DINK lifestyle.. but I will be dropping down to part-time come September for two years when I go back to school. My boyfriend and I keep separate finances and do a joint account.

  • Money Beagle July 22, 2011, 9:09 am

    My wife is a stay-at-home mom so we have a one-income household by default. She did work before, and when we found out we were pregnant, we started adjusting our finances so that by the time she quit we were running solely off my income. That made the transition seamless PLUS it allowed us to pay off a bunch of our student loan balance using 100% of her income for those last several months.

  • Spruce Up Your Finances July 22, 2011, 5:38 pm

    We are currently living with just one paycheck but eventually this will change when my wife graduates from college. We’ve really tighten the belt during these times and an extra income would really help us a lot!

  • Evan July 22, 2011, 9:31 pm

    The Wife and I both work, but she works from home and not that hard lol. She provides her portion of expenses (when we split everything 65/35) through her existing customers so I can’t complain too much

  • 101 Centavos July 23, 2011, 3:18 am

    Great job on moving towards your goal. We’ve always been one income with two kids.

  • World of Finance July 23, 2011, 10:59 am

    DINK (Dual income no kids), great acronym 🙂 … I am currently MINK (Multiple income no kids) with extremely low expenses 🙂 Great post!

  • TJT July 24, 2011, 9:29 am

    My family is now living on 20% of one paycheck, which leads to a great positive feedback loop of investing. I’m saving at a high rate, therefore investing more, leading to higher dividend income which results in a lower percentage of my paycheck used, which leads to more investing… And so on… 🙂

    I should be on 0% of my paycheck within 18 months.

  • Paula @ AffordAnything.org August 1, 2011, 8:21 am

    We live on one income right now, while I re-build my business. Our cost of living is low, so we end up with savings every month. I’d ideally like to be saving more and investing more, but I suppose that’s the sacrifice I’m making for the sake of “not working” // building a business that doesn’t pay off right away.

  • South County Girl August 7, 2011, 8:37 pm

    We just got married a little less than a month ago, so we were Single income, no kids…

    but my husband just got a full time job on friday and starts tomorrow so now we are DINKS. We are planning on living on one income and using the other to save for a rainy day and start funding our retirement accounts since we are debt free (sans the mortgage)!!!!

    • retirebyforty August 7, 2011, 9:31 pm

      Congratulation! Enjoy your marriage for a while before you have kid. 🙂

  • BytheGraceofGod October 29, 2011, 10:17 pm

    Were a family of 5 living on my husbands sole income of 65k a year. We do not recieve any type of government assistance. Have great medical, dental, vision benefits from his company also 401k etc.. (great company to work for). He has a company car & we live the Dave Ramsey way.. and bought our 3 yr old Lincoln Navigator with cash. Husband has excellent credit & we have a big beautiful home. I buy most of my kids clothes off of ebay (all designer labels) as well as a season ahead when they’re on sale, and our house and car were “steals of a deal”… I dont buy anything unless it’s a good deal. We also don’t pay for anything (except mortgage) on credit. In my opinion, maxing out your 401k is one of the best choices you can make, why would you pass that up? It’s free money! I don’t use coupons for food or anything like that, but I do grocery shop at walmart because their great value brand is less expesive. We tried Sams Club for a year and “broke even”. With all of that being said, I find that we just don’t have the extra $ to put aside for the kids college funds and still “have a life” now.

  • Lisa @ Cents To Save November 17, 2011, 8:38 pm

    Oh…. we are living on my husbands income and my unemployment for the last 3 months. So far so good! Hoping to be able to do the same when I do find another job.

    • retirebyforty November 17, 2011, 9:58 pm

      Good luck on finding another job soon. Can you live on just your husband’s income?

  • Eric H. Doss February 13, 2012, 5:07 am

    My wife and I have been living on one paycheck since the beginning of this year. We set a goal to be debt free this year and the easiest way to get there was to live on her salary and spend my paychecks on paying off debt.
    Last month was a surprise. We overbudgeted in some areas and were short in others, but the overall budget worked and we stayed in bounds, with the exception of a $14 iTunes purchase. We’ll see how we hold up over the next 10 months.

    • retirebyforty February 13, 2012, 9:16 am

      Good luck! It’s easier than you thought right? I’m sure many more families can live on one paycheck and save the rest, but when you’re stuck in the spending cycle, it’s hard to see that.

      • Eric H. Doss February 13, 2012, 9:19 am

        Very true, much easier than you expect.

        I don’t think we’ve totally changed our spending habits, but we’re working on it. No need in beating ourselves up about spending the $14, it’s reasonably insignificant and we don’t want to lose sight of the bigger goal.

  • The Green Swan June 8, 2016, 4:32 am

    I like how you pull forward old articles, thanks for sharing the update. I think it is a very good point to try and save one income and live off the other. I remember my parents saying that when I was growing up. My Dad would tell me they basically would save my Mom’s entire salary each year. Definitely pays off over time!

    • retirebyforty June 8, 2016, 9:07 am

      It’s summer time and I’m having a little writer block. There are only so many topic to write about anyway. 🙂 I need to rewrite the old posts that weren’t so well written.

  • Apathy Ends June 8, 2016, 4:38 am

    Dual income no kids (yet) – we come close to saving my wife’s income after taxes – which means we should probably step that up a bit to live off one income.

    • retirebyforty June 8, 2016, 9:07 am

      It would be great if you can save her whole paycheck. It’ll give you more options when you have kids. 🙂

  • Emmanuel June 8, 2016, 5:05 am

    I agree wholeheartedly with this post. In my family, we are almost there. Together with my wife, we had to go through our finances again to bring it completely under one income.

    • retirebyforty June 8, 2016, 9:08 am

      Keep working on it. Good luck!

  • Robert M. June 8, 2016, 5:35 am

    We’ve been living on one paycheck for the last 17 years. I’m in the military and my wife is a stay-at-home mom who home-schools our 4 children. We own a nice sized house, have retirement savings for both of us and college funds set aside for the kids. Through aggressive saving and sacrificing (my wife drives a 14 year old minivan with low miles; we don’t have the latest and greatest gadgets) we’ve managed to set ourselves up for early retirement. I will leave the military next year with a decent pension and work for about 5 years while our oldest kids work through college. We’ll be in our early 50’s and hopefully have many decades of travel and relaxation ahead of us. It can be done if you get your priorities set.

    • retirebyforty June 8, 2016, 9:08 am

      The military is one of the best way to reach early retirement. Great job and thank you for your services.

  • Sam S June 8, 2016, 6:17 am

    We were making really good money when my wife was working FT. We were looking to buy a house around the same time as some of our friends. They all questioned why we picked the area we did and I’m sure if they had the balls, would’ve asked why we didn’t spend the $350k they did for a house. Well, I told my wife that we could afford to (we made more combined than some of our friends), but I wanted to be able to pay for our expenses from my income alone and use hers for savings. I don’t know our friend’s financial situation, but I’m sure they both have to work FT in order to live their lifestyle.

    A couple of years later, we had our first child. My wife cut her hours and is now working weekends. It’s tough on the family, but we live comfortably even after her paycheck was cut almost in half. We’re happy with our decision and our old house suits us fine for now.

    • retirebyforty June 8, 2016, 9:10 am

      Thanks for sharing. It’s great that you were able to build the life you want. Working part time is much better when you have kids. Some kids rarely see their parents. It’s a little sad.

  • Believe Fire June 8, 2016, 6:29 am

    We are currently rocking the NINK stage ourselves. We could have lived on one paycheck when we both had them before. We’re currently spending some savings since we don’t have paychecks coming in. Hopefully it will pay off with an awesome low cost retirement abroad. If not, we’ll need to generate some income so we can increase our net worth and retire in the U.S.

    • retirebyforty June 8, 2016, 9:10 am

      NINK sounds awesome. Mrs. RB40 would have liked that, but I wanted a kid. 🙂

  • Jim @ Route To Retire June 8, 2016, 6:56 am

    We’re currently dual incomes with one kid, but my wife is only working part-time and it’s at a non-profit so there’s very little pay coming in on her side.

    Not having 2 full time incomes makes it a little more difficult to get closer to FI, but we’ve managed to keep putting away a little more every year (currently around 35%).

    — Jim

    • retirebyforty June 8, 2016, 9:11 am

      35% is really good. Keep it up! I’m sure you’ll get there someday. I’m very thankful that we put off having a kid until we were a bit older. We were able to save a lot when we were young.

  • Pia @ Mama Hustle June 8, 2016, 7:04 am

    We’re dual income, dual kids 😉 I’m optimistic that once our oldest starts kindergarten in August, and the astronomical childcare bills drop somewhat, we’ll be much closer to putting half our income towards debt/savings.

    Childcare is our largest bill. Up until we moved into our house this past month, it was 2.5x times the cost of our rent! Now, the kids are in a slightly less expensive camp for summer, so it’s only 1.5x the monthly mortgage. (To all the folks who don’t have kids yet, let me reassure you by saying they are WONDERFUL little people. LOL)

    Every dollar we save from decreased childcare goes towards our debt (or, in the case of this month, my kiddo’s dental work). Once the debt is paid off, both our kids will be in public school, and the after care costs are very reasonable, and at that point we’ll be saving over 60% of our income! I can’t wait.

    • retirebyforty June 8, 2016, 9:13 am

      Childcare is pretty crazy. Our kid starts kindergarten this fall too. I’m really looking forward to having no childcare expense and a little more time to work. Keep at it and good luck!

  • Fiscally Free June 8, 2016, 8:01 am

    We are currently operating with one income and one kid. Hopefully we will have no traditional incomes soon.

    I have a question: Are you considered “retired” if you quit your job but your spouse is still working?

    I’m inclined to say no. At that point you are a stay at home mom/dad, or a housewife/husband if you have no kids. I don’t think I’ve ever heard a stay at home mom refer to herself as retired. My wife certainly doesn’t.
    The one exception may be if you are older and your spouse will be retiring soon. In general, I think both partners need to quit working in order for either to really qualify as retired. Retirement is about freedom, and you don’t really have much freedom when one spouse is working. Even though you aren’t working, your life will still be dictated by your spouse’s work and vacation schedule.
    It’s mostly semantics, but it feels a little misleading to claim to be retired when your spouse is still working. I suppose I feel the term retirement implies you are living off of your savings, or at least passive or non-traditional income.

    Note: I’m not trying to be a troll. I am actually curious what other people think.

    • retirebyforty June 8, 2016, 9:16 am

      It’s just semantic. Mrs. RB40 likes working and she wanted to keep working. Why force her to quit?
      She can retire when she’s good and ready.
      We’ll still be tied down with our kid’s schedule when she retires. Freedom isn’t that easy. 🙂 When our kid is out of the house in 13 years, then we can do whatever we want.

      • Fiscally Free June 8, 2016, 9:32 am

        The kids’ schedule does present a challenge, but summer break has a lot of potential for long adventures if you don’t have any jobs to stop you.

        • retirebyforty June 8, 2016, 11:32 am

          We’re working on it. Hopefully, Mrs. RB40 will retire in a few years. We want to take a year off to travel around the world. We’ll home school the kid for a year. Should be fun. Cheers.

          • Fiscally Free June 8, 2016, 6:28 pm

            That sounds exciting.
            I’m sure you were planning to, but please write about the home-schooling experience when the time comes. I’m very curious to hear how that works out.

  • William June 8, 2016, 8:15 am

    Currently: two incomes, one college student, one middle (junior high) school kid and trying very hard to keep things in order.
    The wife is not a saver, the kids are kids and life likes to throw ridiculous curve balls at us. But keeping the head above water as it goes.

    • retirebyforty June 8, 2016, 9:17 am

      It would be great if you can convince your wife to save more. That can be difficult, though.

  • BeSmartRich June 8, 2016, 9:04 am

    We are SINK for now. My wife will be done her school in about 2 years then will be DINK for a while until we feel that we want to have babies 🙂 SINK is serving me well although I feel that since there is no income splitting between couple in Canada, one pay cheque is tough on taxes. We have been moderately frugal and invested wisely and were able to reach $170K of net worth so far with single income.


    • retirebyforty June 8, 2016, 9:21 am

      Ohh… DINK will be awesome. Your net worth will increase at a faster pace, you’ll see. Good luck! 🙂

  • Cash Flow Diaries June 8, 2016, 9:43 am

    I feel like I am on the same exact path you are on. Next stage for me is having babies. Im hoping to be a stay at home dad like you in my early 40s.

    Congrats on the hard work you did to get to where you are at now.

    • retirebyforty June 8, 2016, 11:32 am

      Being a stay at home dad is the best job I ever had. It’s awesome. 🙂 Thanks and good luck to you as well.

  • desidividend June 8, 2016, 2:23 pm

    We are currently 1 income and 2 kids.Hopefully some time in near future we become 2 income family

  • Smart Money MD June 8, 2016, 7:25 pm

    While only peripherally related to this article, the other extreme I commonly see are dual-income households where one spouse earns significantly more than the other. In many of these cases, the lower income spouse may other have been in the 10% effective tax range but is now up in the 39+% marginal range plus state due to high combined income.

    I’ve wondered what the best way to suggest to them for the lower income spouse to either quit his job or switch to some independent contract/self-employment status to maximize tax breaks. No dice just yet. But I do see why some people wish to keep working not to feel that they’ve wasted their careers.

  • MrSLM June 8, 2016, 8:34 pm

    We’re currently 1 income with 1 kid, second on the way. We live in our own rental though, and the other units cover costs. We manage to still save about 75-80% of our income.

  • Steve @ Think Save Retire June 9, 2016, 8:01 am

    Dual Income No Kids (forever) and living off of one income. Actually, it’s not even one income – probably 3/4ths of that single income. Saving the rest for retirement at the end of the year.

    • retirebyforty June 10, 2016, 8:38 am

      Love it! Looking forward to see how you like ER. 🙂

  • nicoleandmaggie June 9, 2016, 11:41 am

    This year we lived on about 25K more than our joint take-home pay. But take-home pay doesn’t include the amount we save for retirement, which is some % of DH’s pay and 12% of mine plus 36K, nor the 12K we put into 529s for our kids each year. So I guess we’ve been technically spending less than we earn, though probably more than DH’s salary.

    Next year I will be back to full income and our living expenses will be halved. I think we might run out of tax-advantaged savings room and our mortgage will be done by March so we’ll be out of easy places to stash money. That will be fun! We might put money in taxable stocks for the first time since we’ve been out of graduate school. Or maybe I’ll get a Tesla (kidding!).

    • retirebyforty June 10, 2016, 8:44 am

      It will be great to have no mortgage. Our living expense would decrease quite a bit after our mortgage is done. It will be a while for us, though. Enjoy your mini retirement. 🙂

  • Lazy Man and Money June 9, 2016, 4:36 pm

    This is remarkably close to our path. The years differ by one or two. Also we have two kids.

    We have a little more real estate investment by default of buying at the wrong time, being very underwater, and needing to move across country for military commitments.

  • The Jolly Ledger June 10, 2016, 6:21 am

    DH an I have one child and only have one income. We still save >60% of that income per year. For us, the key is reducing expenses. Our happiness is not derived from paying too much for entertainment, food, daycare, or housing. I think we are kicking ass, and am very proud of our progress.

    • retirebyforty June 10, 2016, 8:57 am

      Congratulations on making it work. Saving 60% of your income is a fantastic accomplishment when you have only one income. Great job!

  • Finance Patriot March 24, 2017, 10:46 am

    Well said, we’ve lived on one income for five years. It’s really no big deal, even with two kids.

    Soon I hope to join my wife as co stay at home parents. I’m really excited about it. At 40, I am yearning, like you already do, to become a gentleman of leisure.

  • Ms. Frugal Asian Finance April 4, 2017, 11:53 am

    Mr. FAF and I live on my paycheck and put his towards our mortgage. Our immediate goal is to pay off the mortgage. After that, we will start investing in rental property and retirement (more).

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