What's That Second Income Really Worth?
You've calculated how much it costs you to work. What's left over? This is the amount that the second income is actually contributing to your household. What is your REAL hourly rate when all work-related expenses are deducted? Is it worth it? Keep in mind that even if the actual amount you clear from a second income is small, if you rely on that money to make ends meet, you'll have to figure out how to cover the shortfall.
Identify Ways to Slash Expenses
Once you've identified your work-related expenses and calculated how much the second income is really contributing to your finances, you can begin to identify ways to slash your expenses. First you have to track your expenditures to see where your money is going. Don't guess. If you're not currently tracking your expenses, you're bound to be surprised at how much you spend in certain categories.
Your local bookstore has many books on simple living, frugal living, cutting expenses, saving money, and other related topics. "You Can Afford To Stay Home With Your Kids," by Malia McCawley Wyckoff and Mary Snyder, is a good how-to book by two women who have done it successfully and share their methods with their readers. The Internet is also a great source of information and ideas on what you can do to make it possible to stay home with your kids. One of the best sites is About.com's own site for Stay-at-Home Parents.
Once you identify how much (or little) your second income is really contributing to your household, you may realize that it's possible to cut expenses enough to cover the shortfall so that you or your spouse can stay home with the kids.
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