Multiple Incomes: Need or Want?

Without a doubt, the cost of living has increased worldwide over the past decades, demanding families bring more and more money home each year. There are necessary expenses, such as rent/mortgage, groceries, gas, car payments, utilities, and insurance, to name only a few. But it’s easy to lose sight of what is necessary and what you can do without: your standard of living.

In order to have a balanced financial life, you must know the difference between need and want when it comes to expenses. All spending is optional, depending on your career path and your level of materialism. The internet is essential for most jobs and lifestyles; a simple fact in our modern society. However, high definition cable with hundreds of channels that are more commercial and programming are not essential. Thanks to online streaming and YouTube, my household doesn’t even have cable anymore. We can get any type of programming we want on the internet, usually for free or much cheaper than the cable company.

Besides things around the house, another crippling expense for Americans is childcare. Whether you hire a licensed daycare or a nanny from Care.com to watch over your kids, you’re going to have to pay a pretty penny, anywhere from 800-1400 dollars a month. Quite possibly more. Some parents may choose to stay home with their children to save money, but the kids could be missing out on priceless social opportunities. At daycare they work with experienced teachers on a daily basis, not to mention everything they learn from their peers (including basic social skills). Even from young ages, kids teach other kids. But for some families, these benefits may simply be outweighed by the cost.

Even with two working parents, families are often forced to live as if they have only one income because child care could eat up an entire take-home salary. Basic numbers would suggest that staying home with the kids makes the most sense, but there are a two sides to consider before leaving a paid job to save a buck. First is the potential career gap that’s created after years off. It may be difficult to get an entry level job if you’ve been out of the loop for five years. If you would have stayed in your field all those years, in theory you’d be in a better paying position now. The second thing to consider is the value you personally place on quality family time. During those five years, an unbreakable family bond can develop, and that can never be given a price tag.

When considering what your family needs and wants, your income plays an important role. Even simple living comes with bills that need to be paid. Striking a satisfying balance between work life and family life keeps everyone happier. All you need to know is where your values are best met.