Households that have one “breadwinner” and one “homemaker” certainly still exist, but they are becoming increasingly rare.
Between 1996 and 2006, the number of dual-income families in America increased 31%, according to the Department of Labor. In fact, among families with children, 59% have two working parents, 2012 data from the Bureau of Labor Statistics shows. In other words, two adults bringing home the bacon is the new norm.
What's more, in a 2013 survey conducted by LearnVest and Chase Blueprint®, six in ten Americans told us they believe you need dual incomes these days to afford your dreams.
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So how do dual-income couples allocate their resources? There isn’t a one-size-fits-all solution, but these four married couples—who live in different U.S. cities and earn different amounts of money—have all found a way to make it work, being mindful of their incomes, expenses and what they value most. We shared their budgets, and we asked Stephany Kirkpatrick, a CFP® with LearnVest Planning Services, to highlight what each family is doing well—as well as ways they can save even more money.
Lisa Kroulik, 45, a freelance writer in Minneapolis, Minn.
Five years ago, I fell into credit card debt, filed for bankruptcy and lost my home when I divorced the father of my two girls (Rachel, 17 and Abby, 14). We lived without health insurance for several months. It was terrifying.
Since then, I have been very focused on rebuilding my finances. Three years ago, I married my second husband, Darrell, 49, and we bought a house together two weeks later. So now all four of us live together, and we finally feel financially stable. It’s Darrell’s first marriage, and he has no debts or dependents to support.
I use Quicken to keep track of our income and bills each month, so I can make sure we don’t fall behind on payments. Darrell works as a manufacturer and makes $50,000. My income fluctuates since I’m a freelance writer, but between my earnings and the child support I receive from my ex-husband, I make about $35,000.
We use Darrell’s credit card to pay for several expenses, from our cell phone service ($252) and cable and internet ($196) to our gym membership ($34), groceries ($600) and restaurant costs ($250). But we make sure to pay them off in full each month. By doing this, we're able to take a vacation every year because we rack up rewards points, which we use on hotels and airfare. Last summer, we traveled to Washington, D.C. for five days.
My daughter Rachel does color guard as an extracurricular activity at school. It costs $250 per season for uniforms and equipment. I was paying for that each year, but she's a senior now, and she recently got a part-time job as a personal care attendant. I’m trying to teach her how to manage money, so she’s going to use her earnings to pay for color guard. I want her to learn that you have to work for things you want. Just because our standard of living is better than it was several years ago, I don’t want her to take that for granted.
There have been some unexpected costs. In February, our HVAC system broke down (it was 25 years old), and we had it replaced. So we’re currently on a $658-a-month plan to pay for the new system. If we complete our payments by the spring, we’ll avoid paying interest.
Money for our retirement ($245/month) and health insurance ($380/month) is automatically taken out of Darrell’s paycheck. We have two cars that are paid off. But we pay $250 a month for gas and about $89 a month for insurance. Our insurance rate is higher because Rachel recently got her license.
Our other monthly expenses include our mortgage ($1,263), utilities ($150), donations to our church and charities ($300), school lunches ($100), random kid expenses ($355), haircuts ($35), clothing ($100), home supplies and other miscellany ($300) and braces for Rachel ($139).
We currently have no debt and have $2,500 in savings (though we're not currently adding to this amount) and $215,184 saved for retirement. I’d like to build up our savings more, so we can have an emergency fund and contribute more to Rachel’s future college tuition.
What Stephany Says: I am so proud of Lisa for making sure that she has health insurance for the whole family now. It's also terrific to see Rachel working and contributing to her color guard expenses! In fact, now might be a great time for Rachel to get a student checking account. And it’s time to shop car insurance rates with other vendors and ask about a good student discount.
The HVAC payment is making things tighter than usual, so Lisa should consider a home warranty to cover other major appliances, which could prevent big costs in the future. (Here’s one place to look.) To prevent a surprise with taxes at the end of the year, Lisa should set aside a little bit of every freelance paycheck just for that purpose. She can also set up her own Roth IRA, and cut back on one to two costs here and there in order to save another $50 a month for retirement right away.
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