I had been married four years or so when my wife started tearing up when other’s children were around.  I realized I could not put off starting my family any longer.  It was time to step up and be an adult.  We both wanted to be in a position for “mom” not to have to work if she did not want to so we set up a plan to wean ourselves from two incomes to one.  The plan worked and I thought I would share it with you.

Step 1: Figure out what your lifestyle costs you.  In other words, how much do you spend?  Take an afternoon and add up all of your credit card, checking account and cash expenses for at least 6 months.  Don’t forget to add in things that only get spent once per year like real estate taxes, big vacations or year-end gifts.

Step 2: Figure out what you need to be saving each year for the future.  Notice that I did not say what you are currently saving.  You need to calculate what you should be saving and hope that it is not far off from what you are actually saving.  Add up your 401(k) and IRA contributions, monthly investments to mutual funds, etc. Then, with the help of some software or a good financial adviser, figure out if you have a gap in your savings.

Step 3: See if you can fit the sum of step 1 and 2 into the salary of the parent that will keep working.  For example, let’s say that annual expenses for you are $75,000 and that your annual saving need is $15,000.  That means that your total annual outlay needs to be $90,000.  Can you do it?

Step 4: Test it out.  If you find that you are a little short initially, set up a plan to get on track. The goal should be to get to the point, before quitting work, that you can “save” the take home pay of the partner that will be losing the income while paying the bills and setting aside enough for your future.  Determine your gap and then divide that gap into bite size chunks. For example, let’s say that you still need to use $4,000 of income of the future “stay at home” spouse and you hope to be able to have them quit work in two years.  You can divide the shortage by 8 ($500) and then increase your automatic savings by that amount each quarter.  The result in two years should be that you can live without their income and be confident that you are saving what you need to for your future.

Don’t be discouraged if the gap is too big at first.  Stay positive and set realistic goals to get yourself on track.  After all, stopping work for the right reasons may be more important than the dollars and cents.