Wife = asset or liability?

Screen shot 2009-11-17 at Nov 17, 2009, 8.15.38 PMSo I have this great plan in my head: Get married and get rich. They go hand in hand right? Okay, I know it may not be all gravy, but I still can’t wait for the days of being a DINK (Dual Income No Kids). I’ve got a gameplan in my head, but I wanted to run it by all you married folks to see if it was reasonable.

The plan is simple: Live off my income, put wife’s income in the bank. Let’s pretend I get married in a year. At that point, I’ll be making $62,000 annually. That is easily enough money for both me and the Mrs. to survive on. Let’s not forget she will be working as well. I’ll assume she will be making roughly $40K/yr. Whatever is left after taxes are taken out of her paycheck, will go straight to Roth IRA’s and savings (probably about $25K/year).

I’m not naive though, I’ve listened to my fair share of Dave Ramsey and it is not uncommon to hear a caller indicate his wife is responsible for accumulating a significant amount of debt without his knowledge (Don’t label me a sexist, I know this works both ways). The power of a larger income can lead to a tendency to live a more frivolous lifestyle. New cars, lavish vacations, and dining out become the norm. High income often causes increased spending.

The main reason I want to be able to survive off my income, and save hers, is I don’t think my wife will work forever. Once baby ninjas enter the picture I want her to have the option to stay at home. If we allow ourselves to become accustom to surviving off both of our incomes, it would be super difficult to take a $40K hit in income for her to stay home. I feel like a lot of people purchased huge homes based on their dual income, and now find themselves struggling as one lost employment or decided to stay home with the kids. I would like to avoid that situation at all costs.

If I play my cards right and buckle down on the budget, future Mrs. Ninja and I should be able to comfortably live on my salary and take hers to the bank. Hopefully accumulate $100K in savings come time to make a home purchase, and then she can quit and stay home with the kids. Am I living in a dream world? Is there something to the DINK formula I’m overlooking? For current Dinks, is it totally awesome? Have you become dependent on both incomes? Has the dual income caused any issues? I need all the info I can get so I can plan accordingly.

20 thoughts on “Wife = asset or liability?”

  1. Mr and I are living off one government salary, so it's entirely possible. We are living in a 4 bedroom house in a fairly expensive area (outside D.C.) and while we're not paying down debt as fast as I'd like, we're not accumulating any more debt.

    So yes, it's still possible, even in this economy if you a) have a little luck on your side and b) play your cards right. We've always survived on Mr's salary and mine was supplementary.

  2. I've thought of that idea too if I ever get married. Call me old fashion, but I want to have kids and not work full-time for a period while they are young, so getting into the habit of living off my husband's income ONLY is a great idea. Plus, it'd be pretty sweet to be able to save all my pretty pennies. ๐Ÿ˜‰

  3. Sure it's possible but it wasn't practical for me and the little miss just yet. It will work out in the future but as for right now we are not living off only one income quite simply because our expenses are two high. Our combined income is about 150k. We own one multi family which is upside down and not making money but yes it does almost cover it's self and one single family house as well. We have been renovating our houses for a couple of years and my hope is that in another year or so we will be done with the majority of the renovations finally be able to live off only one income.

    What I have come to realize is that it takes quite a while to establish your self and get ahead. I do not believe in taking on added debt or living beyond your mean's. I drive a cheap commuter car which has 1 year left on a 3 year loan. My wifes car we paid cash. To get in a position where you can pay cash for large expenses but the key is to be disciplined use your resources wisely and live within your means.

  4. This is a great idea, and I can tell you it is possible. Right now we live on 50% of our total income, and use his 24 hours every other weekend to pay cash for his tuition. When he graduates in May and starts working full time we plan on using his first few paychecks to pay off the rest of stupid Wells Fargo, and then we will only have a small mortgage. After that we will just put his paycheck in savings until babies come. Then if my job will not allow me to work part time (or from home) we will be in a position that I don't have to work.

    I will tell you that it gets pretty tempting to blow the extra cash we have every month on stuff together (purchases for the house, trips, etc). But as long as you and Mrs. Ninja both agree on the arrangement and regularly sit down to reassess the goals after you are married you shouldn't have a problem. Good luck, and personally, I can't wait to read your blog after you say I do (whenever that is).

  5. Right now, I am the liability in our relationship with more student loan and credit card debt than hubby. But, once my debt is paid off, we are totally able to live off one income since we bought a house based on one income (it was mine at the time, but my income has since decreased because I made a career move). Currently my take home income goes to my liabilities, I pay half the housing costs (mortgage and utilities), and my gas costs. I spend very little otherwise. Hubby covers the groceries and any 'fun' costs.

    Once all my debts are repaid, all of my income will go into savings. So I agree that your take on the salary division is a good one.

    Here in Canada, we get employment insurance when we are off work and we can take up to 52 weeks in total combined as maternity leave (mother only) and parental leave (either Mom or Dad). The maximum is $447 a week in Ontario, minus your taxes. We factor that income into our budget for being off work with the baby.

    Something to consider is that daycare costs can often be reasonable with just one child (meaning you would still come out ahead by having both parents work minus daycare cost) but once you have two in care it makes more sense for one parent to stay home. Usually. There are as always some exceptions to the rule.

  6. It's definitely possible, as long as you've saved that hefty down payment. As renters, it's a breeze to live on one income, and we're talkin' Jersey/NYC metro area. It's the mortgage that shoots it all to shit. As long as you both pay off your debts and your mortgage payment is similar to what you would pay for rent, I think you'll do just fine.

    Similar situation/salaries here, only reverse the genders. So unless we go all Alien Nation and Mr. Saver becomes able to give birth, we'll have to get creative with our finances to enable me to stay home, since our mortgage is more than what our rent was (stupid property taxes).

  7. Hmm, Financially it might work out, but has Girlfriend Ninja agreed to stay at home to raise the Baby Ninja?

    Personally, I could never stay home with kids. I would be craving a social life and work fulfillment. I’m sure that raising kids is fulfilling for some..but not for me. I’d rather work while raising kids.
    .-= Duddes02ยดs most recent blog ..10 Random Things About ME =-.

  8. One of my co-workers is doing that now. His wife works as a nurse, so she makes about $50k/year. He's a graduate student, makin around $22k/year. So they live off of her salary and use his to pay student loan debts.

    I think it is even MORE ideal to live off of the lower individuals salary, that way no matter who looses their job you'll still be covered.

  9. I think what makes this scenario tough is that the stay-at-home spouse usually has problems re-entering the work force so it's not a temporary loss of income. The working spouse will have to support spouse, usually wife, and kids for the rest of his/her life. I know many couples who have done the stay-at-home route and never recovered financially.

  10. Ladies, I like your "assets" ya'll seem to be doing very well for your family! I'm stoked most people seem to say the Dink Formula works wonders, I was scared there would be a ton of horror stories.

  11. Yes, this can totally be done, provided you keep the baby ninjas out of the picture for a while. ๐Ÿ™‚ Those little tykes are money-sucking black holes let me tell ya. ๐Ÿ™‚ Good luck!

  12. I was taught this in High School and it makes total sense. You live off of one income just in case two things happen, one persons loses a Job or you pop out a kid. I read so many stories in Total Money Makeover about people making a combined $93K and still they were in debt because they lived off of every cent of that $93K. When you live off of $45K then you start to become Financial Stable. Get rid of Debt, and start saving for Retirement, House, or whatever your future goals are.

  13. I'm pretty stoked to hear that living off of one income will be possible. I've never considered it, but I may bring that up to the BF when we have the next in line in our series of "talks."

    Interestingly only one commenter hinted at Girl Ninja's thoughts on this. It's not really the point of the article, but I notice these things. I'm assuming you've already talked to her about this and she is ok with staying at home. RIGHT? If she says no, the plus side is you'll still have the money coming in. And can you really say no to more money? But I understand the importance of having the option to stay home with the kids (which is ultimately the best for the family in the end)

    • Girl Ninja is all about the stay at home mom deal. I wouldn't mind if she wanted to stay working. All I want to do is be able to afford the option for her to stay at home if she so chooses. I probably sound sexist, when I say things like the wife will stay at home, but I'm a little old school and so is Girl Ninja, so I think that is our plan at this point. Once we actually are engaged and start talking about marriage more, we will fine tune our ideals.

      • Oh that's great. If she's on board then I think this is a great plan. So I brought this idea (the operating on one income idea) up to the BF yesterday (in the car, you know, the perfect place to have PF discussions) and he thought it was a fantastic idea. I think you just changed our lives with this post!

  14. At our house we have two incomes, and after we paid off debt a year or so ago it has been all gravy. Only debt we have is a manageable mortgage. Being a DINK is awesome!

    At our house we live on a small portion of my income, and the rest of my and my wife's income goes to saving/investing/giving. We're nowhere near where we want to be – but even after having my wife go through a series of health issues and surgeries in the past two years (and 250k+ in medical bills – thank God for insurance), and a variety of other things, we're still in the black and racking up the cash.

    So yes, it can be done, and it is awesome! We also want to have the option of my wife staying at home with any kids we might have. I don't think it's sexist to talk about that or even say that having that option would be great – I think being a stay at home mom is an honorable and laudable choice!

  15. It really depends on how much money each of you makes. I have a master's degree, but could maybe clear $35,000 a year max because I work in social services. My husband has a high school diploma but makes about $60,000 a year because he works in IT. Two people who each earn less than $40,000 a year would probably have a hard time sustaining a one-income lifestyle with any comfort or flexibility, especially once children come along.

  16. Do you have any friends? Dateable I mean.

    It can be done, but Americans have learned to become "fat" cats. If they really saw how people lived outside of this country. They don't need to get a bigger place just because you have a kid – stop buying [email protected] for your kid. We moved here from another country, but I have lived here most of my life. We were a family of 7 living in a 3 bedroom 1 bathroom house . I slept in my parents room for over a year until they could afford to make the kitchen two rooms and moved my brothers bunk bed in there.

    As long as you and the potential Mrs. Ninja are on the same game plan of goals, it is DEFINITELY doable. You just have to decide to live differently than your friends…

    A man with a financial plan – that's what I like to hear! Now if you just had an older friend…

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