JUST WHEN YOU THOUGHT EVERYTHING WAS GOING WELL YOU’RE HIT WITH AN ILLNESS THAT WILL FOREVER CHANGE YOUR LIFE.
I’ve been writing about money for much of the past decade but I didn’t always have my act together, financial speaking. In fact, I spent most of my twenties deep in debt, and it took a big, scary, life-changing event for me to have my financial awakening.
I’ll never forget the day when my world changed. It was 2008, and my wife had complained of a headache – a pain behind her right eye, to be exact. She was in excruciating pain and nearly went blind, temporarily, seeing only red spots out of her affected eye.
An ophthalmologist confirmed it was optic neuritis, an inflammation that affects the optic nerve. After prescribing an incredibly high dose of prednisone to bring down the inflammation, the doctor referred my wife to a neurologist who diagnosed her with Multiple Sclerosis. We were devastated.
At the time, we didn’t know much about MS and how this disease would impact our lives. All we knew was that each flare-up of the disease caused nerve damage, which would gradually get worse over time and lead to some form of disability, depending which nerves were affected and how severely.
Here we were, newly wed, living paycheque-to-paycheque, and now faced with a life-changing chronic illness. Prior to being diagnosed with MS, my wife and I talked about wanting to travel the world before settling down to raise a family. That plan changed in a hurry.
Travel was put on hold and instead we decided to have kids and start our family right away. Not knowing what to expect from the MS wildcard, we thought it best for my wife to stay home full-time and focus on her health while also looking after the kids (turns out those two are mutually exclusive!).
My career was on an upward trajectory but, as a sales director for a national hotel chain, I was away a lot travelling on business. I wanted more of a work-life balance so I could be home more for my family and have the flexibility to take time off for the times when my wife’s illness flared-up.
Fortunately, a position came available in the public sector that came with a higher salary, plus more flex-time and vacation days. Best of all, it’s a seven-minute drive from our house and I can walk to work most days in the summer.
We felt pretty good about our work-life balance and our decision to start a family. Now we had to clean up our finances and figure out how to make it all work living on one income.
It’s one of the biggest decisions couples face after having kids: Should one parent stay home full-time or will both parents return to the workforce? The reality is, with increasing consumer debt levels, soaring house prices, and stagnant wages, there are more families these days that are relying on two incomes just to get by.
I’ll be honest; I didn’t think we’d be able to survive as a single income family, but when I did the math I realized we could make it work. Here’s how we did it:
Practice living on one paycheque while you’re still earning two
My wife didn’t just up-and-quit her job as a medical office manager after she was diagnosed. It wasn’t until after we found out she was pregnant with our first child that we put our plan into action.
We still had about six or seven months with two full incomes, plus a year of maternity leave benefits, so we had time to transition into living on one income.
But the key was to recognize this early and start preparing by cutting back on expenses and saving more money every month until we could comfortably live on just one salary.
By preparing early, we started to develop some frugal habits that stuck with us and helped us get use to living on less. The extra money we saved over that period was used as an emergency fund in case something unexpected came up.
Budgeting and tracking expenses
A budget is not for everyone and I know it’s tedious to track every penny you spend. That said, you should monitor your income and expenses for a certain time after any big change in your financial situation. Becoming a single income family definitely qualifies as a major change.
I used a spreadsheet to project our income and expenses over a 12-month period and help us get a big picture view of how our financial situation would change over time. This showed by how much we would need to reduce our expenses to reach our goal. I also started tracking our monthly spending so we could get a good handle on our fixed and variable expenses.
Put Big Expenses on Hold
It’s hard to watch all your friends take expensive vacations and buy the latest gadgets while you drive around in your 10-year old beater and consider camping for the long weekend as your summer vacation. With a bit of patience, though, you can still enjoy some of the finer things.
We lived in a 2 bedroom, 1 bathroom starter home for more than eight years. We knew if we wanted to have another baby we would eventually need to upgrade our house.
Instead of immediately jumping into a bigger home, we took our time and delayed the purchase by over a year, allowing us to save for a bigger down payment. After some serious saving, we ended up building a house that we plan to live in for the next 20 years.
Other Ways to Save Money
With plenty of time to get ready to live on one income, we were able to find several other ways to save money and reduce our expenses. Here are some tips that helped
Plan your meals – The single biggest money saver for us was planning our meals in advance and cooking at home every night. In our twenties we spent well over $1,000 every month on groceries and dining out, and were able to reduce that to $600 a month just by meal planning. Not only did we save money, but also got healthier than ever and actually became pretty good cooks after a few years.
Related: How to meal plan and save money
Shop around – We looked at all of our recurring monthly bills and either negotiated better rates or decided to shop around for better rates elsewhere. We were able to save on bank fees, auto insurance premiums, monthly cable and internet bills, and heating and electricity just by making a few phone calls and asking for better rates.
Make a habit of doing this once a year and you can typically save at least 10% off your bills.
Use rewards wisely – With travel on-hold there was no point saving up all of our Air Miles points for a dream vacation. We started using our rewards cards points to redeem for products like free groceries and gas. Between PC Points and Air Miles earned an extra $50 a month in free groceries and gas.
Monetize a hobby – People have all kinds of skills, such as photography and web design, or they enjoy the dog sitting and selling used items on Facebook or Kijiji. Whatever your skill or hobby is, consider putting more effort into it and trying to earn a bit of money on the side.
Once my blog got more readers I started earning money online through advertising and by doing some freelance writing on other financial websites. Heck, even a few hundred bucks a month pays for our heating and electricity bills. Why not?
Illness Changes Everything
I share this because, sadly, it often takes a major disaster for people to start taking their finances seriously. Don’t wait until you reach rock bottom – you can take control of your money today.
MS can be a brutal disease, both physically and emotionally. Nine years after she was diagnosed and my wife is doing really well, staying fit and eating healthy. She completed her first half-marathon in Calgary last month, running it in a very respectable 2 hours and 2 minutes! If anyone can beat the disease, or at least keep it at bay, I know she can.
Discussion Question: Have you ever had to turn your financial house upside down due to illness or another type of emergency? Please share your experiences in the comments below.
Photo credit: Rob Engen
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