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We never seen this before. Max, the one to watch for a good scream with Cricket. Yeah! Phone plan, streams, and standard definition. Programming subject to change. Fees, terms, and restrictions apply. I see cricketwireless.com for details. Today's show comes in by request of a listener who writes in and says this, "Joshua, will you please send me a link to the best show that you have for a woman who is wanting to convince her husband that they can make it financially if she stays home?" Well, unfortunately or fortunately, I had to respond back and say, "Well, I don't have that show." But today, I will create it for you.

Welcome to Radical Personal Finance, the show dedicated to providing you with the knowledge, skills, insight, and encouragement you need to live a rich and meaningful life now while building a plan for financial freedom in 10 years or less. My name is Joshua Sheets and I am your host. And today, we tackle this question because, yes, you really can.

Yes, you, no matter what, you really can afford for your wife to stay at home. This question is one that's particularly important to me because it's something that I heard and answered so many times when I was doing active financial planning for individuals. There would be so many people who when I would sit down with them and ask them and talk to them about what they wanted and what they were trying to accomplish, they would say, "Well, we'd really like to be able to afford for my wife to stay at home." Stay at home with the children usually or sometimes stay at home just regardless of the children.

And yet, so many people don't see a way to make this happen. So many people have this desire but they don't think that it's financially feasible. Well, today, my goal is to convince you that no matter who you are and no matter what circumstances you face, it is financially feasible.

That's a tall order, I know, but I'll do my best to at least persuade you in that direction. That said, I want to start by acknowledging that I do not believe that this question or this decision is fundamentally a financial decision. I do not believe that finances are the primary motivator.

Let me tell you a story of two clients that I served when I was working as a financial advisor. The first client was an extremely wealthy, high-income earning attorney. Sat with him in his office, fancy downtown West Palm Beach office, earning in excess of $400,000 a year, approaching half a million dollars a year by the time he brought in bonuses and performance pay, etc.

And we're talking about family and children and I used to, in the course of my financial interviews with people, talk to them about children. And one of the standard questions was, "Do you have children?" "Yes, I do." He had one son and I said, "Are you and your wife hoping to have more children?" And he looked at me and he snorted and he said, "Are you kidding?

We can hardly afford the one that I have." And what was so remarkable about that is anybody who's raising children would look and say, "But you earn $400,000 a year." His wife was also working. She had a business. I think she netted about $60,000 a year from her business as well.

Now, obviously, if they wanted to, they could have more children. But they were looking at it and seeing the problems with being able to afford to have more children. Now, on the flip side, I worked with a client of mine who worked as a public school teacher, earning under $40,000 per year.

And he and his wife had four children and they were able to afford for his wife to be at home with the children, caring for the children during the day. And they were able to do it and live a perfectly reasonable, perfectly comfortable lifestyle without going into debt. It required skill, but they were able to do it.

And I've often thought about those two very different people. And that plus many other experiences and a lot of other financial experience has convinced me that these types of questions are not fundamentally financial questions. They're fundamentally life decisions that you make and then you make the finances work. See, if you start with finances, I don't know the number that you would ever make you feel comfortable for you to be able to have your wife stay at home with the children if that's what you're working towards.

But I do know that if that's what you want and if that's what you're working towards, we can make the financial plan fix that. I believe this applies in some of these most intimate areas. Number one with marriage, I have yet to meet the person who wasn't able to get married because they couldn't afford to.

I've heard – had lots of people say to me and say, "Hey, Joshua, we're going to get married someday, but we just can't afford it." I've never met the person who can't afford it. It doesn't cost anything to get married. About a hundred bucks for a marriage license if you want to get married before the state and you don't even need that if you skip the state license.

You call a bunch of your friends together and you bring someone in and you have a wedding ceremony. It doesn't cost any money to get married. Same thing with having children. I am convinced that the decision to have children and not have children is not fundamentally a financial decision.

I'm not saying the finances don't play the part, but I don't know who can afford to have a child if you start with finances first. And then the same thing with a life decision like your wife staying at home. I know for me and my wife, there is no financial decision that we would ever succumb to or bend to that would make that – make us make a different decision other than perhaps my disability and my inability to work.

These decisions are not fundamentally first and foremost financial decisions. We are so convinced of the importance and the value of our children and the importance and the value of especially my wife's work with our children that if necessary, I would work two jobs. I would work three jobs. We would live in a very low-priced house if that's what was necessary.

We would have one car. We would live on a very basic budget. We would make whatever decision we had to make in order for these things to work. It's not fundamentally first and foremost financial considerations that drive these decisions. These are lifestyle decisions. These are decisions that you make because you see a purpose in what you're doing.

Now, unfortunately, many people have as their highest and best purpose to earn as much money as they can. Now, if pressed, they of course wouldn't admit to that. But when you break it down, many people ascribe their sense of self-worth and their mission in life and their fundamental purpose as having the highest income possible so that they can enjoy that income to the full effect.

If you don't see something different, there's no amount of financial consideration that will drive you there. But my purpose here today is simply to point that out to you and not to make that decision for you. But as this listener said, if you want to make that decision, my job is to make it a little bit easier financially speaking.

Now, I'm going to tell you how to do this. Then I'm going to give you an example and I'm going to come back and give you more light on how to actually make the money work. That was the question I was asked. How could – I got to find it here.

How could a woman who wants to convince her husband that they can make it financially if she stays home do it? So, I'm going to give you the basic process. First, the way that you answer this question is you sit down and you figure out what all of your income is, what all of your income sources are to the dollar, and you calculate any difference that would come based upon your wife staying at home.

Then you calculate any changes in expenses that would occur from this decision, any savings or any additional costs, and then you look to see would there be any other sources of income and you figure out how to compare those things. So, most people don't fundamentally have the data to do this.

If you do, it'll be easy. And I hope that you do because the number one most valuable skill that you can develop to make major improvements in your financial situation is the skill of tracking your actual income and tracking your actual expenses. And by doing that, you will learn about your situation.

You'd be able to do this analysis yourself. Hopefully, you have that data. Do something like look back for the previous calendar year and try to figure out what those numbers are and make some comparisons as you'll hear me do for you in just a moment. But if you don't have that data, then track it and guess at it the best that you can.

If you don't have the data, quick sponsor ad here, and then we're going to go on and I'll give you an actual example. Sponsor of the day today, number one, is YNAB. YNAB is the budgeting software that my family uses and that if your family were using would make this decision really, really easy because you'd have good data.

YNAB stands for You Need a Budget. And it's a really intuitive – it's not intuitive. It's a really useful personal budgeting application that allows you to actually figure out how to handle the money that's in your checking account. It solves the major problem of budgeting, which is to try to figure out what do we do with the money that's in our account.

Tomorrow morning, I'm doing some budget planning with somebody and helping a client of mine, helping them out. The fundamental problem is, "Okay, we got all this money, but what do we spend it on?" YNAB makes that easy because then you go in and you say, "Here's what we're going to spend it on." Try a free 34-day trial of YNAB.

Go to RadicalPersonalFinance.com/YNAB. RadicalPersonalFinance.com/YNAB. Get a free 34-day full access trial to the software. Try it out. Take some of their free online classes so you really understand how it works. And I would bet you – I would wake this bed. You'll probably come up with an extra $1,000, $2,000 by the end of the next year from simply using YNAB if you're not using a budgeting system right now.

It's that good, maybe even more. So RadicalPersonalFinance.com/YNAB. Now, let's talk about my example. Let me run you through the numbers here. And I'm going to use here as an example a pretty hard example of a husband and a wife who are both earning $60,000 per year as wages. I had to make up this example somehow and most people in the United States are not earning $60,000 per year.

Most people are earning less. Some people are earning more. But the median wages are lower than $60,000 per year. But the average income of the Radical Personal Finance listener is higher. The average household income is north of $7,500, $100,000 a year. So I've set myself a tall order here to compare a dual-income household of $60,000 per year per spouse for a total of $120,000.

And I've set myself a challenge of trying to figure out what would happen if we took away half of that income. So this is what you need to do to yourself. You start by putting down on paper at the top of a page your total household income, the gross income, meaning the total amount of money that you earn before any costs are counted, before any taxes are paid, before any insurance payments are taken out, your total gross income.

So option A is a working family of $120,000 per year and option B is a stay-at-home family. Now, the first thing to do is to calculate taxes. And there's a huge savings here with regard to taxes when you drop your income down because under the US tax code system, the more money you make, the higher your tax penalty is.

We have a system of progressive taxation. That means that as your income goes up, you lose more and more of it to taxes, which is why there's a disincentive to make more money from a tax perspective. So the first thing to calculate is what are called your employment taxes.

And many people forget to calculate this, but your employment taxes are your Social Security and your Medicare taxes. Your Social Security tax is 6.2% and your Medicare tax is 1.45%. So if you add those together, you have 7.65% of taxes. For the two-income family earning $120,000, there would be a total of employment taxes paid of $9,180.

$9,180. For the single-income family, that number would be cut in half, $4,590. So there's a savings there of $4,590. If you calculate that number, the reason I'm emphasizing it is that's almost five grand gone not to income taxes, just to employment taxes right off the top. $600 a month.

Sorry, I can't do verbal math. $420 a month if it were $5,000 a year. So $400 a month of employment taxes. Next, let's calculate your income taxes. This is hard to do because there are so many individual situations, but I wanted to give a realistic, thoughtful comparison. So what I did was I used a tool on the TurboTax website called the TurboTax Estimate, their tax caster, the TurboTax tax caster.

And this is a simplified tax tool. And I put in 30 years of age as the age of the husband and the wife, and I put in two children for dependent children. And then I calculated with no other changes, no other deductions, nothing, just using the standard deduction, just that, the difference between $120,000, two-income household with two children versus a $60,000, two-income household with two children.

So first, the two-income household. The two-income household earning $120,000 according to the TurboTax tax caster in 2016 US numbers would pay $12,849 of federal income taxes. So let's call it about $13,000 of federal income taxes. The single-income family earning $60,000 per year would pay $1,756 of federal income taxes, bringing the difference saved to just over $11,000.

What this means is if you add up just the tax savings alone, a difference between $120,000 household income and a $60,000 household income, you'll save $15,683 of taxes. That's 26% of the second household income. For most people, this is probably the biggest savings and the biggest cost. Because when you go from a $60,000 income to $120,000 income, there's a big difference in the percentage of your income that you pay in taxes.

The total tax burden between federal income taxes and employment taxes for the two-income household is 18%. They're paying a total of $22,000 a year of taxes. $22,000 out of $120,000 is about 18%. The total tax burden of the single-income household is 11%. They're paying a total of $6,300 of taxes out of a $60,000 income.

However, the important thing for you to notice is the big cost there is the employment taxes. If we just calculate the tax rate excluding employment taxes, just income taxes, the two-income family pays an 11% tax rate and the single-income family pays a 3% tax rate. So going from $120,000 to $60,000 of wages would lead to a savings of $15,683 per year of taxes.

Now, you still have less income. Get into that next. You still have less income, but it's not quite as much less income as it was. Your income net of tax for the two-income household now is just under $98,000. The next biggest savings for most people is going to be the cost of childcare.

Most people who are in this situation are in the situation and affected by a desire for mom to be at home with the children. This is a major compelling reason for many people who are looking at this. Mom wants to be home with the children, especially be home with the young children.

And younger children have a need generally for childcare. Now, you'll know this childcare cost in your local – in your actual situation. It will vary depending on the age of the child and it will also vary depending on where you live. I live in Florida and so I'm going to use a number of $7,000 per year for two children for a total of $14,000.

I pulled up some data to substantiate my numbers. A Boston Globe article using 2012 data says that in Florida, the annual childcare costs for an infant are $8,300 per year. For a four-year-old, they're $6,571 a year. And for a school-age child, they're $3,822. Obviously, with your school age, you are transitioning some of that cost from coming directly out of your pocket over into a social burden paid for by school taxes.

So the cost savings of $14,000 per year – or there's a cost there of $14,000. Which means the two-income family has an income, net of tax and net of childcare, of $84,000 per year. If we assume that that cost of childcare goes away completely, that means that the single-income family can save that $14,000 and have just under $54,000 of income.

$30,000 a year difference here between the two. Single-income family has $54,000 of spendable money. The dual-income family has $84,000 a year of spendable money. But that's not the best – those are the two biggest ones for most people. But that's not the place to stop. There are a lot of other little expenses that could be changed if you wanted them to, if you went from a dual-income family to a single-income family.

A simple and obvious one would be something like commuting costs. I'll tell you this firsthand. I've spent much of my life commuting 30 to 40 minutes to work every single day and to school every single day. Now, I work from home. My wife is at home. We still drive quite a bit because we live in a huge county.

We have friends all over and a very active life. But we've saved a lot of money on gasoline costs, on repairs and maintenance on the car, wear and tear, things like new tires and oil changes, etc. We could save even more if we continued to live as a one-car family.

For a number of years when we had small children, we were a one-car family. At the moment, we're not. But we could save even more. So if we assume that by going from a two-income family to a one-income family, a very reasonable and conservative number – let's say that we're going to save $200 a month of commuting expenses.

I think many families would save that in gasoline alone. That's about $50 a week in gasoline. Many people would save it in gasoline alone. But many people forget about things like tires, things like oil changes, etc. Tires are a big one. So the two-income family would be incurring $2,400 for commuting costs for one of the spouses, for the mom to be commuting to work.

That would be a savings there if she stayed at home. What about things like eating out during the work week? This type of cost is very challenging if you don't have time. Dual-income families with parents don't have a lot of time to do simple things like preparing and bringing a brown bag lunch every day.

You might spend – let's say that you go out to eat two times per week, 50 weeks per year. Two times per week, 50 weeks per year would be very reasonable numbers. That money could be saved by eating at home, about $1,500 per year. Something like work clothing. I'm assuming that if a mom were able to stay at home very conservatively, most professional women would spend in excess of $50 a month on clothing.

Clothing that's appropriate for a professional office environment tends to cost more than clothing that's appropriate for being at home or in the normal marketplace. $50 a month of savings would be about a $600 savings. Another savings, potential savings, would be something like dinners out. My wife and I found that when we were both working outside of the house, we often didn't have the time or the energy to cook and eat at home.

We found ourselves eating out quite a bit. I think many families would find that if they didn't – that they could pretty easily save one meal out per week because mom could have more time and more energy to be able to work and to cook at home. That would be able to save some restaurant food and eating at home would be much less expensive than the restaurant.

So I'm counting that in here for about a $3,000 of annual savings. Then if mom is home from work, there are lots of other little frugal things that could be done that would help to save the family money. Many things that require – one of the worst things about finance, money and the way that personal finances are handled is that the things that require – that save a lot of money often require a little bit more time.

If you have the time to cut up your fruit from scratch in the morning, then you can get your fruit cheaper. But if you need to purchase your fruit pre-cut up, it's going to cost more. There are tons and tons of things that could be saved, perhaps things like lawn maintenance or yard maintenance or house cleaning, et cetera.

But I just added up commuting cost, $200 a month. Work lunches saved, two lunches a week at $15 per lunch. It could include coffee as well. Work clothing saved, $50 a month. Dinners out saved, one dinner a week for a family of four at $60. That's one of the cheap places and just general $200 a month of savings due to frugality.

That would lead to about just under $10,000 per year of savings leaving – and I'm counting that as working cost, $10,000 per year. So now our two-income family has income, net of tax and net of childcare and net of working costs of $74,000 per year. Our single-income family has income, net of tax, net of childcare, net of working costs of $53,000 per year, about a $20,000 per year difference.

What's the point of this analysis, the $20,000 per year difference? I'm not saying that mom being at work and earning more money doesn't bring a net positive financial gain to the family. I think it does for most people. Here in my analysis, I still have $20,000 of extra spendable income in the two-income family versus the single-income family.

What I am saying is given the fact that your wife wants to be at home with the children or you want her to be at home with the children, given that fact, are you willing to give that up for a measly $20,000 per year to work 40 hours per week plus commuting time, to have somebody else watch your children, have somebody else pour into the lives of your children?

Is $20,000 of lifestyle worth it? That's the fundamental question. Now, I think my numbers here are pretty conservative. I tried to make a realistic example of this. I think for many people, we could very easily increase those numbers even more. I think saving $300 a month on commuting costs would be for many families that are like this, six-figure household income, used to living, professional lifestyle.

I think saving $300 a month would be easy, even more. I think that 100 lunches a year, two a week for $15 is probably a lot less than many people. I know when I was having business lunches, it wouldn't be uncommon for me to have more than two a week and it wouldn't be uncommon for me to spend more than $15.

So if it was 200 lunches per week, four lunches per week at $15, that includes coffee, that'd be $3,000 of savings. I think my $50 a month estimate is probably conservative. $100 a month savings could be very easily done. Two dinners out wouldn't be that big of a surprise for $6,000 of savings.

I think easily, someone with the time to focus on household frugality could save more than $2,400 a year, could easily save $400 a month, which would bring the income net of working costs would be just about $12,000 per year. I don't know what your household's numbers are. You have to sit down and look at it.

But if you actually calculate it, you might find, especially with taxes and childcare, you might find that it doesn't cost as much as you think. The specifics of your situation will open up other possible savings or other possible expenses, other possible costs. You'll have to analyze those. At the end of the show, I'll read a short note from a listener who – one of my favorite emails from a few years back who went through this analysis.

And he and his wife were able to find $30,000 per year of savings in their budget by her staying at home, not earning an income. And a big one for them was the fact that they could drop their student loan payments down to – because of an income-based repayment plan and save money on the student loan payments.

And possibly, depending on the income, you might qualify for additional tax credits. You might qualify – that can be very, very helpful, things like retirement savings credits. The earned income tax credit is huge if your income goes down lower. And if you can make that up on the side with savings, you might find that you're spending a lot of time working for wages that aren't particularly helpful.

And then finally, don't forget about the additional freedom and flexibility that can be opened up to earn more income for the household when you don't have to go to a job every day. Now, this will be dependent upon the individual people involved. But I know many people and many listeners who – many women who work as a stay-at-home mom.

And that – the flexibility of being a stay-at-home mom opens up more options for them to be more involved in their family's investments, to be more involved in a side business, to do something that's more related to their children. Something like taking on teaching classes locally, working with local homeschool families in a co-op, earning a little bit of income but offsetting expenses in the other way.

Can do side businesses of various kinds of cottage industries, et cetera. And when all of a sudden now we have that potential with other things that I teach here on Radical Personal Finance about tax savings, being able to purpose some of your current expenses over into business expenses and open up an additional source of revenue.

There are so many potential benefits that could be made that it's well worth your sitting down and calculating your actual expenses. That's the key thing is to calculate your actual expenses. So your homework is make a list of all of your income and all of your expenses right now with the best data that you can put together and then look at each of those line items and try to figure out if my wife stayed at home, what would happen to this area?

Some expenses might go up. For example, in our household with me working from home and my wife being at home all day, we have a higher air conditioning bill than we would if we were both in an office all day and the children were away somewhere. Those types of things would need to factor in.

I'm not pretending that this is easy. That's why I let off the show with saying I don't believe first and foremost that this is fundamentally a financial decision. I would say first and foremost, this is a lifestyle decision. And as the husband of a stay-at-home mom, there is nothing better than being able to see the lifestyle benefits for me and for my wife of her being at home.

You talk about the benefits of early retirement. It dramatically changes your marriage when your wife is not stressed out constantly about her job and then that filters at home. It's dramatically different when your wife is not in a situation where she has to be so pressured by time, where she has time to pursue her own personal pursuits, her own personal work, her own personal hobbies, her own personal leisure.

Don't pretend and don't think for a moment that the work of a full-time mother is in any way easy or is in any way not time-intensive. It's extremely difficult and it's extremely time-intensive. But that doesn't mean that it's not a better lifestyle. And it's made such a difference since my wife came home and stopped working for an external employer.

It's made such a difference in her quality of life and in my quality of life. It opens up so many opportunities and so many options. It's really, really good. I highly recommend it as a lifestyle decision. As I close, let me just read this kind of inspirational email. This came in from a listener of mine a few years ago.

But he said, "Joshua, I've been wanting to tell you about some exciting changes in our family life, much due to inspiration from your show. After the inspiration to track expenses, our cash flow, taxes, etc., and after reading the book, How to Pay Zero Taxes, I realized that my wife did not need to be working.

She put in her notice one month ago and will begin as a stay-at-home mom on Monday. She is thrilled. Through tax savings, credits, and reductions in income-based payments to student loans, I discovered nearly $30,000 in savings right away for her not working. In addition, we can enjoy more home cooking, slow living, and hopefully less stressful purchasing.

Some example savings. Previous work expenses saved, $5,000 per year. Pay-as-you-earn student loan payments saved, $6,000 per year. Taxes saved, $7,000 per year. Additional savings from being able to qualify for a saver's credit on the taxes, $2,000 per year. Taxes saved from IRA contributions for both, $3,000 per year. Long story short, I discovered savings of nearly $30,000 for her not working.

By the way, I always interrupt this. If you want to get me angry, say to me or say to my wife that she doesn't work. My wife works very hard, so I hate this not working thing. My wife works very, very hard, and being at home is not the point of not working.

It's just simply not working for somebody else and not earning wages in an outside job. So, saving $30,000 for her not working outside the house. Now, instead of three hours of getting the family ready, sitting in traffic and getting to work late, I can wake up at 5 a.m., get on the express bus, and be at work by 6 a.m., getting home much earlier, all while they sleep in, have a casual breakfast, and enjoy life.

Thank you for the inspiration in your shows on stay-at-home parenting. It has made a great difference in our lives. That's the type of thing that's doable. And even there in the last line of that email, he points out there are lifestyle considerations. I can work just with--especially with children.

When you're trying to wrangle children's schedules and whatnot, if you have a two-income household where both of you are responsible to other people for your time and you're trying to figure out your children's schedules, man, what a nightmare that is. But if my wife is at home and she can be responsible for picking the children up or taking them without having to check with me and without having to check with a boss of some kind on her work obligations, it frees me up to be more financially productive.

It frees me up to be able to do things that otherwise I couldn't do. I couldn't go to a conference for three days and be at a business conference if she had to be a single parent at that time and hold down a job. Now, lots of families do it.

I wouldn't do it, not unnecessarily. It's a huge, huge deal. In closing, I do not believe that finances are going to be the fundamental driver of this decision. Either this is important to you and your family or it's not. I didn't even touch on all the psychological stuff. I didn't even touch on the challenges and just the political issues.

There was an article from some recent articles going on in Australia where a lady wrote in the Daily Telegraph, the Australian newspaper, that it should be illegal for a mother to be a stay-at-home mom. She was proposing that it should be illegal for a mother to be a stay-at-home mom because stay-at-home moms are not doing their job for the economy.

And here in the United States, this is starting to come out in politics right now with some of President Trump's proposals about we've got an underutilized resource. There's a whole – man, I could preach for hours on the history of dual-income households and how this happened in society and why it happened.

But I will control my tongue and simply say this. If you have this desire, make a list of all your income, make a list of all your expenses, go line item by line item. See, what would naturally change just simply from your wife being at home? What would naturally change just automatically, something like the tax savings?

And then what could you change if you wanted to to make it happen? Could you get rid of the cable bill? Could you take a slower internet bill? Could you adjust and wouldn't need two expensive phone plans when you can get a cheaper one? There's all kinds of things that you could change.

And then think about the benefits. Think about the relationship that you have with your children. Think about how much more intelligent and more well-adjusted your children would be because they're raised by parents rather than an institution. Do some research on the influence of that on child psychology. Think to yourself what type of life you want when you're older and what type of relationship you want with your children when you're older and what you're doing now to accomplish that.

Count the cost and I hope these financial tips help that make that decision a little bit easier. This show is part of the Radical Life Media network of podcasts and resources. Find out more at RadicalLifeMedia.com. Enrich your life and empower your future at North Orange Continuing Education. Convenient online and in-person tuition-free classes for the whole family.

Visit go.noce.edu today.