Moving to a one-income household
September 15, 2021 6:38 AM
Due to increasing and incompatible personal and work demands, my wife is strongly considering quitting her full-time job, possibly consulting on a project basis for her current employer (or new clients), or possibly just taking some time off. We can live comfortably on my salary. If you've been in a similar position, what should we be thinking of as we consider this important decision? We're in the US.
Wife works full-time a not-for-profit, doing work she's good at and enjoys. However, it's the familiar story of too few people to do the Important Work, leading to unreasonable demands and expectations. There's no end in sight. I'm in a for-profit field, and make, frankly, close to 9x her salary. We are deep in our MFJ tax bracket, so every dollar of her salary is being taxed at our marginal tax rate.
We both agree that my wife's time is worth more to her and our family than she's being paid. She's strongly considering giving notice and either taking some time off or offering to consult for her employer on a project-based basis.
I am aware that quitting may impact wife's average indexed monthly earnings for US Social Security purposes, will impact our ability to save for retirement (since she'll no longer be covered by her employer's 403(b)), and aware that she would be a 1099 recipient for any consulting work she does and will have different tax payment obligations. And, of course, one wonders about how and whether she would re-enter the workforce in the future, if she should so desire.
If you or your spouse have made similar transitions, what would you advise we consider as we ponder this decision? Also, do you have any specific recommendations for the unique transition from employee to consultant working on an hourly basis on projects that were previously in your full-time remit?
Wife works full-time a not-for-profit, doing work she's good at and enjoys. However, it's the familiar story of too few people to do the Important Work, leading to unreasonable demands and expectations. There's no end in sight. I'm in a for-profit field, and make, frankly, close to 9x her salary. We are deep in our MFJ tax bracket, so every dollar of her salary is being taxed at our marginal tax rate.
We both agree that my wife's time is worth more to her and our family than she's being paid. She's strongly considering giving notice and either taking some time off or offering to consult for her employer on a project-based basis.
I am aware that quitting may impact wife's average indexed monthly earnings for US Social Security purposes, will impact our ability to save for retirement (since she'll no longer be covered by her employer's 403(b)), and aware that she would be a 1099 recipient for any consulting work she does and will have different tax payment obligations. And, of course, one wonders about how and whether she would re-enter the workforce in the future, if she should so desire.
If you or your spouse have made similar transitions, what would you advise we consider as we ponder this decision? Also, do you have any specific recommendations for the unique transition from employee to consultant working on an hourly basis on projects that were previously in your full-time remit?
I don't have specific tax or consulting advice, but in general, it would be wise for your wife to have a plan to transition to some kind of work outside the home, at least on paper (e.g. setting up as an independent consultant). Quitting a job and then having a large gap could affect not only her income for social security and other purposes, but also her ability to transition back to the workforce if/when she wants to.
I am hearing more and more of these stories, and as the head of a non-profit (which is lucky to be properly staffed and funded), I feel for these organizations. Still, your wife is wise to prioritize her mental health--nobody will ever compensate her properly if that is compromised by a dysfunctional workplace.
posted by rpfields at 7:22 AM on September 15, 2021
I am hearing more and more of these stories, and as the head of a non-profit (which is lucky to be properly staffed and funded), I feel for these organizations. Still, your wife is wise to prioritize her mental health--nobody will ever compensate her properly if that is compromised by a dysfunctional workplace.
posted by rpfields at 7:22 AM on September 15, 2021
With a 9x multiplier what I'm going to say applies less to you than other households going from 2 to 1 income, but:
The impact of losing a job in your household is now much higher, since there's only the one to lose. My wife and I make very similar money and her benefits are much better than mine, but I have health care through my job if I want it. So while losing either job would be painful, we could live on either income alone if needed. We have an emergency fund too, but would (hopefully) not have to touch it for single-job unemployment.
By contrast, if you lose your job, your *entire income* goes away. So it would be wise to make sure you have a *lot* of backup savings, such that if you do lose your income, your household is ok. You won't have her benefits or wages to fall back on to cushion the loss.
posted by Tomorrowful at 7:25 AM on September 15, 2021
The impact of losing a job in your household is now much higher, since there's only the one to lose. My wife and I make very similar money and her benefits are much better than mine, but I have health care through my job if I want it. So while losing either job would be painful, we could live on either income alone if needed. We have an emergency fund too, but would (hopefully) not have to touch it for single-job unemployment.
By contrast, if you lose your job, your *entire income* goes away. So it would be wise to make sure you have a *lot* of backup savings, such that if you do lose your income, your household is ok. You won't have her benefits or wages to fall back on to cushion the loss.
posted by Tomorrowful at 7:25 AM on September 15, 2021
On the change from employee to consultant: Boundaries are critical for any job, triply so here. Especially if it's a 'lots of people wear many hats' nonprofit, as most are, she may have to be extra-clear on a regular basis that she's still working on Project A and Project B but will not be talking about Project C, or D, or participating in hiring, or helping brainstorm new ideas for the department, or helping out with an event, etc, etc.
posted by Tomorrowful at 7:27 AM on September 15, 2021
posted by Tomorrowful at 7:27 AM on September 15, 2021
We have not done this, but we have discussed it and may go in this direction in a few years. The biggest thing that gives me pause, given the paltry public safety nets in the US, is the risk of having the single wage earner lose their job and then having to simultaneously deal with loss of income and loss of healthcare coverage. With enough savings this can be buffered, obviously, but it is something to consider.
I have some acquaintances who did this earlier in the pandemic (in large part because of the school-at-home situation). I also have friends who did the reverse (using the tight job market to facilitate the formerly stay-at-home spouse returning to the workforce); they have told me that having that smaller second salary has really reduced their financial stresses, but they also don't have a 9x salary differential. I think this is a common discussion and a common thing to be doing, but because people mostly keep their finances private it can be hard to see how they make it work.
posted by Dip Flash at 7:34 AM on September 15, 2021
I have some acquaintances who did this earlier in the pandemic (in large part because of the school-at-home situation). I also have friends who did the reverse (using the tight job market to facilitate the formerly stay-at-home spouse returning to the workforce); they have told me that having that smaller second salary has really reduced their financial stresses, but they also don't have a 9x salary differential. I think this is a common discussion and a common thing to be doing, but because people mostly keep their finances private it can be hard to see how they make it work.
posted by Dip Flash at 7:34 AM on September 15, 2021
it would be wise for your wife to have a plan to transition to some kind of work outside the home, at least on paper (e.g. setting up as an independent consultant). Quitting a job and then having a large gap could affect not only her income for social security and other purposes, but also her ability to transition back to the workforce if/when she wants to.
This is really good advice. A close friend was able to successfully re-enter the workforce relatively smoothly recently after a half dozen years as a stay at home parent because occasional consulting work and semi-regularly doing volunteer work that related to her field kept her nominally in her profession.
If your wife's work is the kind of work that involves a portfolio, keeping that portfolio fresh, even on an unpaid basis, can be extremely helpful as well.
posted by DirtyOldTown at 7:41 AM on September 15, 2021
This is really good advice. A close friend was able to successfully re-enter the workforce relatively smoothly recently after a half dozen years as a stay at home parent because occasional consulting work and semi-regularly doing volunteer work that related to her field kept her nominally in her profession.
If your wife's work is the kind of work that involves a portfolio, keeping that portfolio fresh, even on an unpaid basis, can be extremely helpful as well.
posted by DirtyOldTown at 7:41 AM on September 15, 2021
Just chiming in -- I'm part of some women's groups where women who have transitioned to full-time parenting with zero work in their field have struggled mightily in the event that they need to go back to work (divorce, loss of primary income, primary earner's illness, etc). Super super highly recommend she keep a toe in if at all possible to preserve her ability to re-enter the workforce if she chooses or needs to.
posted by Medieval Maven at 8:04 AM on September 15, 2021
posted by Medieval Maven at 8:04 AM on September 15, 2021
Make sure you're well-insured in case you suffer a catastrophic injury and can no longer work or die. For the wife, I would think about what she would do if y'all get divorced and how much risk is there for her.
As far as her career, if I were her I would start an LLC for her consulting and throw up a webpage. Even if she does very little or no work, she'll have something to put on her resume that she can describe pretty much how she wants.
posted by lockestockbarrel at 8:05 AM on September 15, 2021
As far as her career, if I were her I would start an LLC for her consulting and throw up a webpage. Even if she does very little or no work, she'll have something to put on her resume that she can describe pretty much how she wants.
posted by lockestockbarrel at 8:05 AM on September 15, 2021
There's a difference between being a fully one-income household and your wife keeping a toe in the field. The former does affect her future ability to earn, as it's harder to re-enter after being out. The latter can scale up and down as needs and interests demand.
She can do both, but I would think through an ideal plan. What does her ideal day/week/month look like? Does she want to take a set period off entirely (a few weeks or months? a year?) What would she do during that time? If she then decides to consult/freelance, what would that look like? What types of clients would she pursue? Are there others (beyond her current employer) where she has connections that might be a good fit? What kind of work/life balance does she want? Is it simply a matter of wanting to make closer to what she's worth, or about working fewer hours?
I quit my full-time job three years ago when I was struggling with burnout and lack of meaning. I left my job on very good terms, giving them 4 weeks notice and leaving the door open for some ongoing consulting work. (Tomorrowful's point here is excellent - she'll need to clearly define scope and expectations!) In the year before I left, I also began putting out test balloons among former colleagues to see what kind of opportunities might exist - talking informally about "if I were to go freelance, would you have the need for my type of services?" To lockestockbarrel's point, definitely use this time to set up the barest of infrastructures - a website, sole prop or LLC, strong LinkedIn profile, etc - that can serve her down the road.
When I finally quit, I did absolutely nothing for two months beyond continuing those conversations with former colleagues. I've since built a very strong client roster and regularly turn away work. I work 25-30 hours/week and make 20% more than my engineer husband and nearly 50% more than my last full-time salary. But if I were to suddenly have more pressing needs - say, a child at home - I would happily scale my business way back for awhile, knowing that I could ramp it back up when wanted/needed.
posted by writermcwriterson at 8:19 AM on September 15, 2021
She can do both, but I would think through an ideal plan. What does her ideal day/week/month look like? Does she want to take a set period off entirely (a few weeks or months? a year?) What would she do during that time? If she then decides to consult/freelance, what would that look like? What types of clients would she pursue? Are there others (beyond her current employer) where she has connections that might be a good fit? What kind of work/life balance does she want? Is it simply a matter of wanting to make closer to what she's worth, or about working fewer hours?
I quit my full-time job three years ago when I was struggling with burnout and lack of meaning. I left my job on very good terms, giving them 4 weeks notice and leaving the door open for some ongoing consulting work. (Tomorrowful's point here is excellent - she'll need to clearly define scope and expectations!) In the year before I left, I also began putting out test balloons among former colleagues to see what kind of opportunities might exist - talking informally about "if I were to go freelance, would you have the need for my type of services?" To lockestockbarrel's point, definitely use this time to set up the barest of infrastructures - a website, sole prop or LLC, strong LinkedIn profile, etc - that can serve her down the road.
When I finally quit, I did absolutely nothing for two months beyond continuing those conversations with former colleagues. I've since built a very strong client roster and regularly turn away work. I work 25-30 hours/week and make 20% more than my engineer husband and nearly 50% more than my last full-time salary. But if I were to suddenly have more pressing needs - say, a child at home - I would happily scale my business way back for awhile, knowing that I could ramp it back up when wanted/needed.
posted by writermcwriterson at 8:19 AM on September 15, 2021
I'd advise your wife to get professional references before she leaves.
posted by Ms Vegetable at 8:38 AM on September 15, 2021
posted by Ms Vegetable at 8:38 AM on September 15, 2021
My wife did this 8 years ago. We consolidated on my health insurance, etc, to raise our kids.
I would agree with others that she needs some kind of plan, because from what I can tell now that our kids spend most of their day in school, that sitting at home all day is not some great prize. She is regularly bored. She takes some small jobs to make some income not associated with her field, but it's sporadic.
It's also hard to go back to regular work when school ends at 2:45 and so we would need day care until 5:00. Daycare is $500 a week, so her job would have to be pretty well paid to be worth it, which is not an easy ask while also having flexible hours.
On the financial side, I fund my wifes IRA ever year, and she has worked enough to receive her max social security when the time comes, so any more working she does just increases the amount she will receive.
You also have to have some kind of plan to give her some money for her own spending.
posted by The_Vegetables at 8:40 AM on September 15, 2021
I would agree with others that she needs some kind of plan, because from what I can tell now that our kids spend most of their day in school, that sitting at home all day is not some great prize. She is regularly bored. She takes some small jobs to make some income not associated with her field, but it's sporadic.
It's also hard to go back to regular work when school ends at 2:45 and so we would need day care until 5:00. Daycare is $500 a week, so her job would have to be pretty well paid to be worth it, which is not an easy ask while also having flexible hours.
On the financial side, I fund my wifes IRA ever year, and she has worked enough to receive her max social security when the time comes, so any more working she does just increases the amount she will receive.
You also have to have some kind of plan to give her some money for her own spending.
posted by The_Vegetables at 8:40 AM on September 15, 2021
I should add that my friend was asked by her new employer to provide tax records to verify her reported freelance/consulting work. For the volunteer stuff, they took just references. So the latter angle provided... more opportunities to uh, describe things generously.
posted by DirtyOldTown at 8:43 AM on September 15, 2021
posted by DirtyOldTown at 8:43 AM on September 15, 2021
I would suggest that she investigate if she could go to part time at the nonprofit with a very defined project as her goal (giving up any administrative responsibilities and having a single project have both helped to define boundaries in the nonprofits I've worked in.
This would be appealing to them, potentially, because it would reduce their benefits costs, and would much more explicitly allow her to have time boundaries and privilege family priorities. But it would also keep her in the work world, both in case she wants to return and also for the very real personal importance of keeping her adult self balanced.
(or alternatively, if she could get a new part time at a different nonprofit with a fresh start.)
posted by mercredi at 8:50 AM on September 15, 2021
This would be appealing to them, potentially, because it would reduce their benefits costs, and would much more explicitly allow her to have time boundaries and privilege family priorities. But it would also keep her in the work world, both in case she wants to return and also for the very real personal importance of keeping her adult self balanced.
(or alternatively, if she could get a new part time at a different nonprofit with a fresh start.)
posted by mercredi at 8:50 AM on September 15, 2021
I advise you consider her mental health over all else.
posted by AugustWest at 9:32 AM on September 15, 2021
posted by AugustWest at 9:32 AM on September 15, 2021
We are a one income family (my wife is employed, I am the primary caregiver for our kids), and one thing that I think helps it work well is that we consider all our money to be joint money (we did experiment with having separate “fun money” monthly budgets for each of us, but ended up feeling like it wasn’t necessary). One of the comments above suggests that you “give” her spending money, and that kind of framing of our income wouldn’t work for me at all. My wife doesn’t “give” me money - her salary is our income. She contributes money to our family, I contribute more time doing childcare, being in charge of groceries, doing more dishes, etc. My wife values my contribution to our family and we make major financial decisions together; the fact that she earns the money doesn’t give her more authority over how we spend it, just like the fact that I do more childcare on a day to day basis doesn’t mean that I can or should make major decisions about our kids alone.
You don’t mention kids in your question - if you don’t have children, or if they’re old enough not to need hands on care all day, what will your wife do with her time? Some people can be very happy and fulfilled without employment/volunteering/etc, some people find that they need more structure to their day or things or need to have some kind of goals to accomplish. Before quitting, your wife should spend some time thinking about what her day to day life would be like without a job, and how that sounds to her.
You two also should sit down and talk about how you both envision the split in your household labor if she is no longer employed. Will she do 100% of the grocery shopping / household errands? 80%? 50%? Will she be responsible for doing more cleaning, cooking, dishes, laundry, etc? Will you continue your current division of responsibility? Will she take on any of your personal errands/tasks since she’ll have more time? There are lots of different ways to handle this, and no right answer - but it’s important for the two of you to be on the same page about it.
posted by insectosaurus at 10:05 AM on September 15, 2021
You don’t mention kids in your question - if you don’t have children, or if they’re old enough not to need hands on care all day, what will your wife do with her time? Some people can be very happy and fulfilled without employment/volunteering/etc, some people find that they need more structure to their day or things or need to have some kind of goals to accomplish. Before quitting, your wife should spend some time thinking about what her day to day life would be like without a job, and how that sounds to her.
You two also should sit down and talk about how you both envision the split in your household labor if she is no longer employed. Will she do 100% of the grocery shopping / household errands? 80%? 50%? Will she be responsible for doing more cleaning, cooking, dishes, laundry, etc? Will you continue your current division of responsibility? Will she take on any of your personal errands/tasks since she’ll have more time? There are lots of different ways to handle this, and no right answer - but it’s important for the two of you to be on the same page about it.
posted by insectosaurus at 10:05 AM on September 15, 2021
Life insurance for you, more than you think and from a private company even if you have it as a work benefit, in case you lose your job. Make sure you're well covered for disability as well. Life insurance for her if you want; for us we sized it roughly based on how much it would take to replace her at-home contributions (mainly childcare, when the kids were very young) with outside paid-for services.
posted by true at 10:45 AM on September 15, 2021
posted by true at 10:45 AM on September 15, 2021
I say do it if she is curious to try it. It may make things much better. I currently do this in my relationship (I work and they don't).
Agreed with talk about household labor, talk about money if you do not currently mingle your finances. Get it in your head that its not your money and their money, but you now have a single main earner its our money the minute your employer deposits it. I needed to encourage my spouse to use our money like it was theirs as well.
We, roughly, kept our division of labor in the house. The only real change was that they are more likely to stay up with one of our kids since I have a work schedule and they could more easily catch a nap.
I think the gap is resume matters more if she doesn't do consulting. If she does some consulting then its easy to talk about projects and things that were accomplished.
posted by creiszhanson at 12:10 PM on September 15, 2021
Agreed with talk about household labor, talk about money if you do not currently mingle your finances. Get it in your head that its not your money and their money, but you now have a single main earner its our money the minute your employer deposits it. I needed to encourage my spouse to use our money like it was theirs as well.
We, roughly, kept our division of labor in the house. The only real change was that they are more likely to stay up with one of our kids since I have a work schedule and they could more easily catch a nap.
I think the gap is resume matters more if she doesn't do consulting. If she does some consulting then its easy to talk about projects and things that were accomplished.
posted by creiszhanson at 12:10 PM on September 15, 2021
If I had this to do over again, I would not do it without a postnup that compensated me for the hit to my Social Security and future earning ability in the event of divorce. I will be paying for my mistake until I die.
Also, based on the experience of every woman I know who has done this, there’s about an 85% chance that you will lose respect for her if she’s not working. Ridiculous but true, even for my high-achieving Yale law grad friend. And the minute she went back to work, things changed again. I don’t know why this should be so, but it is.
posted by HotToddy at 12:28 PM on September 15, 2021
Also, based on the experience of every woman I know who has done this, there’s about an 85% chance that you will lose respect for her if she’s not working. Ridiculous but true, even for my high-achieving Yale law grad friend. And the minute she went back to work, things changed again. I don’t know why this should be so, but it is.
posted by HotToddy at 12:28 PM on September 15, 2021
I had planned to go back to work only part-time after the baby came. My husband does unexpectedly while I was still on mat leave. THANK GOD I have an employable skill which can earn a good living because I have a lot of single mom acquaintances who are daycare teachers and personal support workers and retail workers and life is hard. All this to say, you never know what’s going to happen and an exit plan is always a good idea.
posted by ficbot at 3:45 PM on September 15, 2021
posted by ficbot at 3:45 PM on September 15, 2021
The #1 concern should be to put in place strong financial protections for her within your marriage as well as for herself. Essential items on your list:
> there’s about an 85% chance that you will lose respect for her if she’s not working
Absolutely this. Consider, for instance, that a lot of people whose spouses are doing unwaged domestic work openly say things like the following without embarrassment or self-awareness:
> Daycare is $500 a week, so HER job would have to be pretty well paid to be worth it (capitalization mine)
(as if daycare is HER responsibility alone, and the wage-earning spouse is entitled to free childcare, so that if SHE can't cover the daycare costs all on HER income, then she isn't allowed to take time off from her unpaid childcare duties to get a job at all.)
> GIVE her some money for her own spending (capitalization mine)
(as if the money belongs to the wage-earning spouse alone, to beneficently dole out as a gift to his wife who has no claim of her own to "his" money.)
None of us are immune to internal attitudes similar to the ones I listed above. We all, in the corners of our hearts, believe some parts of the basic notions that the above statements stem from. It shows up most clearly when WE are the non-wage-earning spouse: our self esteem plummets, we stop feeling entitled to spending the family money on ourselves, we begin to defer to the financial decisions of the wage-earning spouse rather than equally share in them, and we constantly feel like moochers who are not pulling our own weight.
Therapy might help with this, but therapy is not enough. Even wonderful people with the best intentions who love their partners fall into these unconscious traps. Many therapists are not equipped to point out the traps either! Because therapists are part of the same society which has brainwashed them in the same ways too. Keeping this concern at the forefront of your minds, regularly assessing for the impact on both of you, making sure you're working to correct the inherent imbalance of power in a relationship where all the money is accruing to one person's name - all of this will be YOUR job. YOU will have to stay on top of it. There are few who can help you manage this. It will have to be your responsibility.
posted by MiraK at 8:42 AM on September 21, 2021
- - A plan for her to get back into the job market after a bit of a break to recover from her obvious burnout - perhaps get schooling/certifications to make it possible for her to get a better job?
- - Funding her 401k to the same level as yours, ensuring she has equal access & information & decision-making authority over money in your family as you do.
- - Purchasing excellent life insurance and disability insurance.
> there’s about an 85% chance that you will lose respect for her if she’s not working
Absolutely this. Consider, for instance, that a lot of people whose spouses are doing unwaged domestic work openly say things like the following without embarrassment or self-awareness:
> Daycare is $500 a week, so HER job would have to be pretty well paid to be worth it (capitalization mine)
(as if daycare is HER responsibility alone, and the wage-earning spouse is entitled to free childcare, so that if SHE can't cover the daycare costs all on HER income, then she isn't allowed to take time off from her unpaid childcare duties to get a job at all.)
> GIVE her some money for her own spending (capitalization mine)
(as if the money belongs to the wage-earning spouse alone, to beneficently dole out as a gift to his wife who has no claim of her own to "his" money.)
None of us are immune to internal attitudes similar to the ones I listed above. We all, in the corners of our hearts, believe some parts of the basic notions that the above statements stem from. It shows up most clearly when WE are the non-wage-earning spouse: our self esteem plummets, we stop feeling entitled to spending the family money on ourselves, we begin to defer to the financial decisions of the wage-earning spouse rather than equally share in them, and we constantly feel like moochers who are not pulling our own weight.
Therapy might help with this, but therapy is not enough. Even wonderful people with the best intentions who love their partners fall into these unconscious traps. Many therapists are not equipped to point out the traps either! Because therapists are part of the same society which has brainwashed them in the same ways too. Keeping this concern at the forefront of your minds, regularly assessing for the impact on both of you, making sure you're working to correct the inherent imbalance of power in a relationship where all the money is accruing to one person's name - all of this will be YOUR job. YOU will have to stay on top of it. There are few who can help you manage this. It will have to be your responsibility.
posted by MiraK at 8:42 AM on September 21, 2021
This thread is closed to new comments.
posted by arnicae at 7:18 AM on September 15, 2021