to School: Cost-Cutting Strategies for Couples Dealing with a Loss of Income
by Gary Foreman
My husband and I both work full time, but my husband
has returned to school to become an X-ray Technician.
He works for United and his income has been cut several
times now. We struggle to make it on both our incomes.
Our two biggest expenses are the mortgage and daycare.
Chuck insists that he will have to work full time in
addition to going to school five days a week. The school
program is designed as a Monday - Friday, 8 a. m. -
5 p.m. program. Essentially, it is a full time job.
I don't think that he could work full time and go to
school full time and still be of any help with our daughter
or the house. He has given me eight weeks to prove that
we can live with only half of his income.
In the last two weeks, we have cut a lot of expenses.
We reviewed our insurance policies and lowered our 401K.
It still isn't enough to make up the difference. We
have about $2,500 left on one car and about $3,000 in
credit card debt. We also have about $10,000 in savings,
$6,000 of that is set aside for his tuition. We really
don't want to touch the savings since it is earmarked
for education. Our monthly grocery bills are about $150.
Where else can we start looking to cut expenses? - Rebecca
Looks like both Rebecca and Chuck are right on this
one. She's right that if he goes to school full time
and works full time, he won't be much help with the
house and daughter. He's right that they probably won't
be able to make it on one and a half salaries without
some severe cost cutting.
So let's take a look at the different options that
are available to them. First, Rebecca doesn't say how
long the course is. Most are two or four year programs,
so they'll need to be able to live with their strategy
for awhile. No matter how they handle it, Rebecca and
Chuck are going to have to adjust and make sacrifices.
Is it possible to cut their budget enough to live on
one full-time and one part-time income? If they're already
struggling on both full-time salaries it's unlikely
that they can make it on less than that. Especially
when you add in the cost of education.
Cutting back on groceries and other items is a good
idea. But, even in the unlikely event that they cut
grocery spending by 50 percent, it wouldn't be enough
to bridge the gap. Budget cuts will need to be dramatic.
And, probably in the areas of housing or transportation.
One way to save money would be to move into a cheaper
apartment and rent out or sell their home. That's a
big sacrifice, but could cut expenses significantly.
A quick comparison of apartment costs to their current
housing expenses will give them a feel of how much can
Another way to save would be to sell one vehicle. The
cost of car payments, insurance, depreciation, gas/oil
and other maintenance items make owning a car expensive.
Cars.com reviewed the cost of owning and operating some
common cars. They ranged from a low of $7,162 for a
Ford Focus to $10,528 for a Nissan Maxima GXE. So eliminating
one car would be significant. Sure, it's going to be
inconvenient. But perhaps a carpool, moped or bike could
make it possible.
If they must have two cars, they could trade one for
an older, small car. That would keep costs to a minimum.
Collision insurance could be dropped. A small car would
use less gas. They would also eliminate the car payment
and might even end up with some cash from selling the
Chuck may have already checked out scholarships available
to him. If not, he should investigate the websites that
Using part of the savings account to pay off the credit
card balance is probably a good idea. They'll save a
little interest each month. And, when an unexpected
expense arrives they can use the card to cover it.
It is quite possible that Rebecca and Chuck can't cut
expenses enough to live on one and one half salaries.
In that case they'll need to decide whether to use student
loans or a home equity loan to borrow the shortfall,
or to have Chuck keep working full-time while Rebecca
takes the lead at home after work.
Rebecca and Chuck are to be complimented for recognizing
a shaky career path and trying to do something about
it. The transition to a new career will not be easy
but should pay dividends for years. According to the
U.S. Bureau of Labor Statistics, about 1/3 of the fastest
growing job titles are medical related. Hopefully that
will give Chuck a good career path for years to come.
Gary Foreman is a former financial planner who currently
edits The Dollar Stretcher.com website. If you need
more time or money visit
The Dollar Stretcher. You'll find thousands of articles
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