If you’re like me, living on a single income and single budget is a dream. It may even seem like a daunting task as you may wonder how one can provide for your entire family with such a small amount. While doing so may be difficult, it is not impossible.
The truth is, it will be tempting to go to the nearest licensed money lender and get lowest interest installment rate on a loan to help support your family’s finances. But with proper budgeting and following these tips, you can become successful in living with one income and debt free at the same time.
Why Would You Want to Live On One Income?
Before anything else, I think it is very important for you to know why you want to do this in the first place. If you are a couple who currently do not have kids, it is the best time to decide whether or not working with one income is something you need to do. It’s to really plan ahead. In most cases, there really isn’t a need to live off one income if you just got married. However, if you are planning to have kids in the future, it is something to think about especially if you want to value time with your children.
If a couple already has kids and both husband and wife are working full time jobs, you may end up missing out a lot in your children’s lives. If your priority are your children, then one of you will need to sacrifice your time by quitting your job and spending time at home so you can spend it with the children and be more involved in raising them.
But is living on one income really doable in this day and age? Yes, but it will take a lot of sacrifice, and lots of planning in order to achieve it. Let’s take a look at some practical ways how one can begin to live off on one income.
1. Work and Plan Everything Out with Your Spouse
One very important thing you have to work on before making the jump to living on one income is to sit down and discuss with your spouse. You and your spouse have to be in full agreement that this is what you want or else it cannot happen. If one of you begrudgingly agrees to this arrangement, it will end up with them not pulling their weight to make this plan successful
and could even cause problems in your marriage. Make sure to sit down and agree on the terms of this arrangement.
Next, come up with a plan. Decide on who will continue on with a career and who will stay home to take care of the household and the children. While traditionally it is the guy that earns the income and the wife that stays home with the kids, it can actually work the other way around especially if the wife has a better career or a better job.
2. Practice Living Off On One Income
The change to living off on one income may cause a strain if you try to do it abruptly. While you are both still earning an income, it is best to begin practicing. Little by little, reduce the expenditures that you have until you are no longer using the income from the person that agreed to stay at home. Start off small let’s say reducing expenditures to 75% of that income. Then once you are settled doing that, reduce it again to 50%, then 25% until you are no longer dependent on the income of the other party.
This will prepare you for the road ahead and allow you get used to a new lifestyle. You also get to save up from the money that you haven’t been spending, which brings me to the next point. Understand the necessity of budgeting to your spouse.
3. Save and Budget
I cannot stress enough how important this is. While both of you are still working, use this time to build a savings fund and an emergency fund so that you have money to spare should there be a need in the future, especially when you are living on one income already. Those extra savings can go a long way. You may encounter times where budget is very tight and your expenses may be more than your actual budget. A savings and an emergency fund can really help you out here.
Make sure to stick to your budget as well. This means that you have live well within your means. Take a look at your expenses and see what you can cut out so that you can stay within the budget. This may mean taking out extra expenses in your household that you may not necessarily need like a cable television or online TV subscription. You may also consider using public
transportation and staying in than going out for dinners frequently. You may find that by reducing expenses that you can actually live comfortably.
4. Get Rid of Debt
Nothing could put more of a burden to your expenses than debt. If you and your spouse have any outstanding debt that you currently have, make sure to start paying it off quickly. Make a plan and get rid of that debt while you still can. Once you move to a single income, paying debts can actually become more difficult and can become a burden. The worst thing would be to look at your budget and see that a majority of your expenses just goes into debt when you could have been spending that money elsewhere. Start now while you can, and try to see if you can come up with a plan to clear your debts faster.
5. Be Ready to Change Your Lifestyle
I covered a bit of this in saving and budgeting but it’s worth stressing this. Because you will live on a smaller income, this means you need to start living well within your means. No more luxury coffee like Starbucks for now. No fancy dining experiences or night out in the town. Start planning your meals accordingly. Be content in not buying brand items when there are cheaper alternatives. All of this can go a long way in making sure you are well within your means. You will be surprised what you can cut out of your entertainment and shopping that you really didn’t need.
Living off one income can be very difficult but definitely doable. You just need to follow these practical tips and you will be on your way in not only being able to provide for your family but also be able to spend time with your kids and be able to raise them yourself.