Income vs. expenses
For many families, having both parents working is almost an economic necessity. But you may want to review the income versus the expenses to really see how much you come out ahead.
I know of two families that did just that. They took a close look at the expenses tied directly to the second income.
Both families had similar situations:
Each family had two children under the age of 10, and the mother returned to the workforce after their youngest child was out of diapers. Both women earned the same annual income and had very similar expenses. Mindy was a customer service supervisor for a marketing firm, and Cedara was a caseworker for a social services agency.
They looked at all expenses directly related to their jobs:
- Transportation -- gasoline and car upkeep or bus/subway
- Child care – day care or after-school care
- Clothing -- several outfits worn only for work
- Dry cleaning -- some work clothes required special care
- Food -- morning coffee, lunch, tips, afternoon snack, etc.
- Beauty salon -- hair/nails were done more often because of job
- Miscellaneous -- gift for boss, flowers for sick co-worker, etc.
Both women knew about the major expenses, but they were shocked at how the little things added up week after week -- the morning coffee, the afternoon snack, a dollar here, a dollar there.
They could see their take-home pay (the amount of their check after taxes and any other deductions); however, they really needed to find out what was left of the take-home pay after all of the job-related expenses were added up.
After careful review, Mindy and Cedara both discovered that after taxes and all job-related expenses, what they had left as a net result was less than one-third of their salary! That means somebody with a salary of $15 per hour would realize a net result of less than $5 per hour.
That shocker really got their attention. Mindy and Cedara had some decisions to make.
(Male)
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