Tuesday, November 24, 2009

From two incomes to one (1)

Mrs traineeinvestor will make the transition from a full time career woman to a full time stay at home mum when she leaves her office for the last time on Friday. With our children starting school and needing a degree of supervision and support which is difficult to provide through other means, we felt it was the right thing for one of us to take on this role.

What does the shift to a single income mean for our household?

The loss of income. Having run the numbers through the spreadsheet a few times, we have concluded that it should not affect my plans to retire in 2012-2013. If it does, it will only be by a year - because we are so close to hitting our number savings have less of an impact on the timing than return on investments.

Vulnerability to job loss. Clearly, if I were to lose my job we would have no income coming in and would need to live off investments until one of us could find a new job. This does not cause us any concern - if we really had to we could make some significant cuts in expenditure and probably get by indefinitely on our investments.

Boredom. The only thing worse than a bored spouse is a bored spouse who tries to relieve her boredom by going on shopping binges. We have come up with some projects to keep Mrs traineeinvestor busy - both physically and mentally. One of which will be tracking our spending in far more detail than we do at present. There are also some projects around the home which need doing. She is considering doing some further study.

Expenses. We are unsure whether expenses will go up or down and will monitor the situation carefully. In some respects, this is a dry run for my own retirement.

Savings. With time on her hands, we will be looking to get better deals on some of our household expenses. At the moment, we simply do not have the time to search out the best deal.

Portfolio. At the moment we do not keep any money set aside for an emergency fund. Having considered our situation, I see no need to change this arrangement. There will still be enough cash coming in from my job and our investments each month as well as money set aside to pay tax to deal with just about any emergency which could conceivably arise.

Insurance. Our medical insurance is provided by my wife's employer and will cease at the end of the week. I have arranged replacement insurance through my employer but have to pay for it myself. This is a significant expense.

Looking forward to the day when I retire.

1 comment:

Adam D. Robertson said...

Good luck to you. Theses are great talking points. Thanks.