Looks like both Rebecca and Chuck are right on this one. She's right that if he
goes to school full time and works full time, he won't be much help with the
house and daughter. He's right that they probably won't be able to make it on
one and a half salaries without some severe cost cutting.
So let's take a look at the different options that are available to them. First,
Rebecca doesn't say how long the course is. Most are two or four year programs,
so they'll need to be able to live with their strategy for awhile. No matter how
they handle it, Rebecca and Chuck are going to have to adjust and make
Is it possible to cut their budget enough to live on one full- time and one
part-time income? If they're already struggling on both full-time salaries it's
unlikely that they can make it on less than that. Especially when you add in the
cost of education.
Cutting back on groceries and other items is a good idea. But, even in the
unlikely event that they cut grocery spending by 50%, it wouldn't be enough to
bridge the gap. Budget cuts will need to be dramatic. And, probably in the areas
of housing or transportation.
One way to save money would be to move into a cheaper apartment and rent out or
sell their home. That's a big sacrifice, but could cut expenses significantly. A
quick comparison of apartment costs to their current housing expenses will give
them a feel of how much can be saved.
Another way to save would be to sell one vehicle. The cost of car payments,
insurance, depreciation, gas/oil and other maintenance items make owning a car
expensive. Cars.com reviewed the cost of owning and operating some common cars.
They ranged from a low of $7,162 for a Ford Focus to $10,528 for a Nissan Maxima
GXE. So eliminating one car would be significant. Sure, it's going to be
inconvenient. But perhaps a carpool, moped or bike could make it possible.
If they must have two cars, they could trade one for an older, small car. That
would keep costs to a minimum. Collision insurance could be dropped. A small car
would use less gas. They would also eliminate the car payment and might even end
up with some cash from selling the newer car.
Chuck may have already checked out scholarships available to him. If not, he
should investigate the websites that list scholarships. A couple to check are
scholarships.com and finaid.org.
Using part of the savings account to pay off the credit card balance is probably
a good idea. They'll save a little interest each month. And, when an unexpected
expense arrives they can use the card to cover it.
It is quite possible that Rebecca and Chuck can't cut expenses enough to live on
one and one half salaries. In that case they'll need to decide whether to use
student loans or a home equity loan to borrow the shortfall, or to have Chuck
keep working full-time while Rebecca takes the lead at home after work.
Rebecca and Chuck are to be complimented for recognizing a shaky career path and
trying to do something about it. The transition to a new career will not be easy
but should pay dividends for years. According to the U.S. Bureau of Labor
Statistics, about 1/3 of the fastest growing job titles are medical related.
Hopefully that will give Chuck a good career path for years to come.
Gary Foreman is a former financial planner who currently edits
The Dollar Stretcher.com website. If you
need more time or money visit The Dollar
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