Dropping Down to One Income: How We Are Handling It

Starting in January, we will be dropping down to one primary income. I’m simultaneously excited and terrified! I am excited because it means that Matt will take on more domestic responsibilities, which will free me up to focus more at work. I’m terrified because our budget will be very, very tight. It will actually only work if he consistently brings in at least an additional $1,000 in revenue from educational consulting or photography/videography per month. And it completely depends on whether or not we can strictly follow our Mint budget.

I guess I should have a little more optimism about our ability to follow a budget, since we literally have no other option. We were in a similar situation before Tate was born. I was only working part-time, and we were trying to save up money to build our house. We also had success when we were trying to stick to our $2,000 wedding budget.

I’m feeling better as I remember those examples! I guess the story I can tell myself is that we can follow a budget when we need to. We are less diligent when the stakes aren’t so high.

Our Process of Dropping Down to One Income

Matt and I revisit our budget on an annual basis anyway, so the timing worked pretty well. Matt’s parents were in town and offered to babysit. Instead of doing something fun like a movie or a hike, we headed to a coffee shop to hunker down and plan.

I pulled up our budget. I keep it in a Google Sheet and add a tab (by duplicating the previous budget) for every year. We brought a recent credit card statement with us, so we could check to make sure that our expenses were accurate. For example, our Netflix expense had gone up and wasn’t updated in our budget.

We went line by line to increase our budget if absolutely necessary, reduce it if possible, or eliminate it if we could. For example, we eliminated our housekeeper (she was coming every three weeks).

We have the formulas set up so we can input our earnings. And then it calculates whether we are over or under budget.

Updating Mint

The tricky part of our system is making sure that our budget in Google Sheets matches up to our Mint account 100%. This process is tedious but so worth it!

Next to each item in the Google Sheet budget, I put the Mint category and a little description of which expenses get coded to that category. I have found that using Mint effectively requires that each expense gets coded properly. Mint automatically tries to code them, and we go in and make any adjustments as necessary.

This year, I am going to print and laminate our budget codes and use tape to stick it on our nightstand. I want to make it as easy as possible for us to update Mint daily.

Mint has two options: you can set a budget so it resets each month or you can let it accumulate. Most of our expenses (car insurance, Netflix, etc.) reset each month. Other expenses accumulate since we aren’t likely to use them each month, such as our budget for stamps.

The thing I’m going to try this year is to set up an automatic transfer in my bank account to move that money into a savings account instead of just leaving it in our checking account. I hope this strategy will help us better match our spending to our budgets.

Matt and I are going to keep our personal allowances. He gets his out of the bank in cash each month. My allowance gets automatically transferred from a checking account to a savings account. I’m going to use a different credit card to purchase things using my allowance. When I pay the bill each month, I will transfer the money out of savings back into checking. That way, if I don’t spend it all each month, it will accumulate.

The next five months will be good practice! If we are able to take a Family Gap Year starting in June, it will be imperative that we can stick to a strict budget to make sure our money lasts through the year.