While putting together our family budget last year, we were looking for ways to save money as we adjusted to single income living. One of the first expenses we decided to eliminate was our home telephone. At $39.95/month, our landline was quickly becoming a cost we could do without. And we’re not alone.
According to a recent report by the Convergence Consulting Group, Canadians will cancel their landline at a rate of 9% a year in 2010 and 2011. It was suggested that 25% of Canadians have already ditched their home phones in favor of using a cell phone.
Why We Cancelled Our Landline
- The Cost – Saving nearly $500 a year sounded like a pretty good deal to my wife and I, and considering we both have cell phones we didn’t really see the point in having the landline any longer. My cell phone bill is paid for by my employer, so it’s just my wife’s plan that we pay for each month (around $65/month).
- The Convenience – We carry our cell phones everywhere, and with technology improving all the time, reception is rarely an issue. Plus, with smart phones like the iPhone or BlackBerry, my wife and I can use BlackBerry Messenger to quickly communicate for free.
- The Inconvenience – Quite frankly it got to the point where the only time our home phone rang, it was a telemarketer or some recorded message telling us to press #1 now because we’ve won a free trip. With our cell phones, besides the occasional wrong number, we aren’t bothered with unwanted phone calls.
Now there are some drawbacks to not having a landline. One being that if there is a power outage and your cell phone battery dies, you won’t be able to make a phone call. But I would hardly say that’s a good enough reason to shell out close to $500 a year for that piece of mind.
For some people, another negative to cancelling your landline and using a cell phone exclusively is that you might end up paying more for your cell phone plans by having to increase minutes or add other features.
Unless you have a good evenings and weekends plan, or don’t call long distance very often, it might be worth it to stick with your home phone. However with the emergence Skype and other VoIP services, you can significantly reduce or even eliminate your long distance charges as well.
It’s been more than three years since we cancelled our landline and we haven’t missed it at all. But now that I think about it, we haven’t “won” a free trip in a while either 🙂
Would you ditch your landline for a cell phone or VoIP service?
When reading some of the comments to our posts I’m amused to see that some responders assume that I’m a man. When it comes to women and money is it generally assumed that women my age are clueless about money and let their husbands control the family finances?
Women and Money
It irritates me to no end when my husband and I meet with sales professionals – whether insurance agents, mortgage brokers, contractors, etc – and they totally ignore anything I say, or even worse, look to my husband for confirmation.
I have dealt with the family budget, savings and investments since my marriage over thirty years ago.
Sure I discuss major purchases and investment goals and holdings with my husband, but he basically gives me free rein because he knows I’m more interested in finance than he is and I have worked for a financial institution for over 25 years.
It’s important for all women to know what’s going on financially in their lives and have some understanding of the decisions made even if they are not interested in the act of building the portfolio.
It’s fine to let their man manage the family investments as long as there is some discussion (even if only a couple of times a year) of strategies, progress and decisions made. It’s a huge mistake for women to plan on a secure financial future by hoping to marry well and live happily ever after.
As a financial planner I’ve seen many cases of women who became widowed or divorced and were paralyzed with fear and confusion, not knowing what to do. Because of lack of involvement and ignorance of their family finances, the pain and grief of personal loss was intensified.
Nearly half of all marriages end in divorce, and women generally live to be about ten years older than men, so widowhood is a strong possibility.
Related: Is A Prenup Really Necessary?
Whether on your own with books or online information, or with the help of a trusted advisor, it’s everyone’s (both men and women’s) responsibility to learn the basics of managing money and taking charge of your financial future.
Make sure you know exactly what your holdings are. Don’t be afraid to ask questions. After all, it’s your life, your plans and dreams we’re talking about and you should know how to go about achieving them.
We have recently made the adjustment to single-income living after deciding that my wife would become a stay at home mom and look after our daughter. Was it a difficult choice? Not really.
While there were many financial implications involved in this decision, the choice ultimately came down to the non-financial benefits that we felt would positively impact our family.
Let’s take a look at some of these financial implications.
Two Income Family or Stay At Home Mom?
- Loss of Income – As the primary breadwinner, I earned approximately 75% of the household income. Losing even a quarter of your income could potentially be devastating to your financial plans. However this was something we felt we could prepare for by adjusting to single income living early and banking my wife’s maternity leave benefits, creating a personal budget, and planning our meals.
- Day Care – The primary costs involved with going back to work full-time would obviously be child care. We checked around at various day care facilities in our area, and the monthly cost of full-time child care would run us about $750.
- Transportation – We would do our best to car pool, but we would at least be faced with an additional $100 in gas each month, especially with these high gas prices. We currently own a 12-year-old second vehicle that we are driving into the ground, but I wouldn’t trust this car to hold up much longer if we were driving it full time again. We would need to consider upgrading this vehicle sooner than later.
- Clothing – Don’t forget about your work attire, which would likely need an overhaul after a year in the closet. Add another $100/month to help get your spouse’s wardrobe back up to par.
- Meals – Due to time constraints from both Mom and Dad working, picking up your child from day care, and trying to keep up with the household chores, you may not be faithfully sticking to your meal plan. Factor in an additional $150/month for dining out, ordering in, and last minute impulse buys from the grocery store.
So financially we were looking at spending about $1100/month for my wife to go back to work rather than become a stay at home mom. After taxes, she would be earning less than $5/hour. That didn’t sound very appealing to us.
Plus, I would be able to claim the $10,320 spousal amount, which is a tax credit that can be transferred to the higher earning spouse if the lower earning spouse has little to no income, and the Universal Child Care Benefit of $1,200/year per child can be taxed in the hands of the lower income spouse.
Aside from the money, what we were really concerned about were our family values. We didn’t want to have someone else raising our daughter during the week. We heard horror stories about how often kids at day care spread germs and were constantly sick. And of course we wanted to share in every part of our daughter’s life while she grows up and reaches those early milestones.
It is certainly a personal choice whether you stay at home with your kids or go back to work. Some women focus on their careers and climbing the corporate ladder, while others dream of being a stay at home mom and raising their family. And as Boomer described in Boom and Bust, some best laid plans get thrown out the window due to unforeseen circumstances.
The point is, there is nothing wrong with either choice, as long as it’s right for you and your values.