Having to start over brings many decisions.

An important one is deciding to stay in or sell the family home.

Can you afford to stay?


Home is where the heart is. In Texas, we say it’s where you hang your hat. Life happens at home—we mark our kids’ growth on door jambs, celebrate birthdays and holidays, and sometimes weep as we say goodbye to someone as that last breath is taken.

How do you decide what to do about the family home when you find yourself single living in your home after what seems like a lifetime living there as a family?

Sometimes the answer comes from emotional places—the kids wish to stay where they have always lived, or we just can’t absorb more emotional upheaval after a dramatic life change too.
Yet many of us should take time to reflect on the expense of continuing to live in our homes once we become single because our household income may change dramatically after such dramatic life changes.

Americans often own homes that they really can’t afford, giving rise to the idiom “house rich, cash poor.” In some states, like California, it is a challenge to not have this problem. Many other cities across the country are much more affordable, yet people still end up owning homes they cannot afford. In 2017 (most recent data), nearly one-quarter of homeowner households fell into this category. Add in renters, and this rate increases to one-third of American households.

How do you know if you are house rich, cash poor? Federal guidelines use the term “cost burdened” to describe this situation, setting 30% of income as the basis to determine someone’s burden—spending more than 30% of your income on your mortgage or rent. The guideline is born from the National Housing Act, which increased the housing-to-income ratio from 10% in 1937 to 30% in 1981. This guideline informs bank lending policy, which is often why someone cannot qualify for a mortgage when their ratio is too high. Fannie Mae will not buy the loans of a cost-burdened mortgage, so banks choose not to make these loans so that they don’t wind up with a balance sheet full of foreclosed properties.
The fed calculates the 30% from gross income, so before you have paid IRS withholding, social security withholding, and even medical insurance deductions. With the U.S. median household income at $68,700 , the IRS tax brackets means half of Americans are paying 22% or more—just in Federal Income Tax. Add in medical insurance and the 7.5% for Social Security and Medicare, and the numbers get worse.

This means that you actually retain less than half your gross income after all your payroll deductions and mortgage costs are subtracted if you follow federal housing guidelines. Those in higher tax brackets keep even less of their income to live on.

You cannot buy groceries from income that is actually required to pay the IRS or insurance premiums. The mortgage payment is due regardless of your ability to buy groceries later in the month. You cannot change the percentage you owe in taxes or to social security, so the only line item you control is the housing line item. The percentage you allocate to housing in your budget matters. The more you allocate to housing the less you have to live on and save for retirement or meet emergency needs.
A symptom of this problem is a low savings rate. 37% of American households do not have enough savings to cover an emergency, like a tire blowout on their car or an emergency trip to the hospital for a kid’s broken leg. It is hard to get a solid financial footing when you are living paycheck to paycheck like this.

This is why one of the first exercises I suggest women do when they find themselves suddenly the single breadwinner is to calculate housing expenses. Add up everything that goes to the home—mortgage, insurance, property tax, services like pool care or lawn care, and even utilities. You’ll want to look at utilities because these expenses will likely go down in a smaller home, especially in places with really hot summers or really cold winters.

If your monthly expenses for the home take a large percentage of your overall budget, then you need to re-evaluate where you live. I suggest you use net income as the basis for all budget decisions—you cannot get out of paying the IRS and Social Security, so just factor that in and use net income.

If you are like me, that means selling the home and moving to a smaller place or a different neighborhood. Women typically earn less than their spouses, and the reduction is compounded when going from a dual-income home to a single-income home.

Your lifestyle will take a hit when you choose to move to shore up your budget. Tell yourself it’s temporary and become a renter for a few years so that you can build up savings, or move across town to the more affordable neighborhood. It really will be okay. It will be hard. You may cry a river of tears as you pack your family home, but you can start the growth marks on the door jamb in a new home and host birthday parties there too. And best of all is that you will start to find that financial stability that we women need to embrace when starting our lives over after such an emotional life change.


Bio Lesley Johnson, Founder of Woman Take Two

Like Caleb and Job, Lesley started a second chapter of life. She now shares life lessons on the road to becoming Woman Take Two. She is the founder of Woman Take Two, a program to help women start life over. After learning from the “school of hard knocks and Southern grit” how to go from homemaker to single business professional, she teaches women how to embrace finance, wellness, and poise in order to start life over from a place of financial stability and peace and in a state of physical well-being. To learn more about her program, visit www.womantaketwo.com.


[1] https://www.federalreserve.gov/econres/notes/feds-notes/housing-affordability-in-the-us-trends-by-geography-tenure-and-household-income-20190927.htm

[2] https://www.census.gov/housing/census/publications/who-can-afford.pdf

[3] https://www.census.gov/library/publications/2020/demo/p60-270.html



Are you interested in being a blogger? Contact us at info@hopeforwidows.org