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Transitioning From Two Incomes to One

Updated on February 2, 2011

Has the recession effected your family's income?

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Personal Finance, The Hard Way

The day I became a mom is when I actually gave a second passing thought about our family's finances. The day I lost my job when my daughter was four months old, well, that put the "personal" in personal finance.

Because of the unrelenting recession, several people have been forced into a one income scenario. I never thought about my finances seriously until they became personal so the recession is an excellent platform for this- it's serious and it's personal. According to the shockingly high unemployment rates and house foreclosures, it's obvious people are downsizing and transitioning from two incomes to one and/or living off meager unemployment checks.

Note: Even if you have a steady two incomes, it's a great habit and practice to live on one income, and save the other. Folks who do this have ample retirement savings and other benefits as well.

Don't Panic; Plan Now!

When I lost my job, we had no back-up plan, our salaries were equal. I was given only a 2 week notice from my employer about being laid off. Talk about last minute financial planning and no room for errors. Our monthly income was cut in half! Logically we had to reduce our spending by half as well. That can seem like a daunting task so I had to break it down into steps.

Step 1: Look at the past

Begin by printing up copies of your bank statements for the prior 2 months. This enables you to identify needless spending. Between my husband and I, there was a total of $500 a month spent on going out to eat. Starbucks coffee might as well have been a bill, it totaled a consistent $150/month for us. Trinkets and toys for the kids can add up, excessive beauty products seem to pile up in the bathroom, unnecessary technology, home phone, hair coloring, and gas.

Looking at our past spending was eye opening. On our bank statement, I highlighted all the spending I deemed unnecessary. Then my husband looked it over and did the same thing. I knew what I could cut down on and it was important for him to recognize what he could cut down on as well. You have to be a team with your spouse and other family members, such as teens, who have spending responsibility as well.

Step 2: Calculate the cuts

There will be automatic costs eliminated when a spouse loses a job:

  • Not driving to work: less money needed for gas. Maybe one less car.
  • Less money spent on more expensive clothes for work attire is unnecessary.
  • Daycare: Take care of your kids while you're at home.
  • Paying for conveniences because you don't have time to do something yourself; you were always at work.
  • Cooking at home instead of going out to eat because you got home from work too late and too tired.
  • Less income equals more assistance available such as food stamps and other programs.

Rearrange your money:

  • Communicate with banks about your finances as soon as possible. They may help or know someone who can to make your money work for you, and in your best interest. If you or your spouse work for certain companies affiliated with a credit union or you are a federal employee, they can easily assist you with loans to consolidate and get lowered payments on many of your bills.
  • Put a savings account in your child's name. I realized this was a mental trick for me because it was too hard, and not tempting at all, to take money out of my little girl's account. How could I take money from my baby?
  • Arrange your bills to come out of your account or to be paid at convenient and well-planned times of the month. Rent is usually due at the beginning of the month so negotiate other bills later in the month.
  • Prioritize your bills. House, insurances, and car payments are large and necessary bills so always put them first and go down the list from there.

Use Microsoft Excel to create a budget

Step 3: Negotiating, bartering, and selling

The negotiation and bartering process can be fun. One way to do this is by trading services among your friends and family, especially others who are unemployed. An unemployed friend of ours is going to school, but knows a lot about cars and does some of our mechanical work for us. We pay for the parts and he does it free of charge and only asks we be a good reference for him when he applies for jobs. We have a friend who is trying to break into family photography so we got excellent family Christmas pictures free. We've set up exchanges for babysitting services and pet sitting as well.

Suppose you don't have the yard space to grow your own fruits and vegetables, local churches and community places have garden space for you to use. Some churches grow their own gardens and let members, and even non-member, pick produce for free.

I'm always amazed at how many people don't ask others for help or help in exchange for help. You can also exchange money saving tips with your friends and family as well. Right now in this recession, it's almost become "cool" to budget and be cost-savvy so take advantage of it. When times have been tough in the past, bartering and exchanges were a common tool people used to make ends meet. It also creates a sense of community.

There are sites available to rent stuff, anything really. If you want to make a big purchase like a new iPad, but you want to know if it will be worth it, rent it first. If you need to cut down a tree in your yard, rent a chainsaw (if you can't borrow one). And vice versa, rent out some of your stuff laying around as well. Sites like Zilok and lonables are excellent resources. Selling your stuff on eBay and second-hand stores is another good way to turn "junk" in the garage to money.

Step 4: Get Your Money's Worth

Since every dollar on a lower budget is worth more, you should get your money's worth.

  • Save your receipts: Honestly, I probably return something almost every week. If something doesn't work very well or as promised, I am not keeping it. I used to casually throw these items away or store them with good intentions, but now I return them. As a consumer, I deserve and demand my money's worth.
  • Read product reviews, blogs, or customer comments. Google/search the specific item and find a place that sells it, then check out the customer reviews/comments for it.
  • Coupons are great, but many stores have automatic price reductions if you get their free store card for discounts. Rotate between three stores- one of them will always have what you are looking for on sale.
  • Be aware of size reductions

Many companies have reduced the sizes of their products; Hagen Daz has Buy in bulk

Step 5: A New Lifestyle

It's best not to look at the situation as temporary. The recession is anything but temporary and you won'tĀ benefit from the situationĀ if you anticipate the next bit of extra money you can spend. If you are living paycheck to paycheck, a dedication to changing your lifestyle will improve your mentality and attitude about it. Essentially, adopting a sensible approach to living on less can be viewed as a choice rather than a punishment and will help relieve you from the pressure of keeping up with the Jones'.

The main goal is to maintain a modest lifestyle and not fall into the same predicament down the road. One of the first things people are tempted to do is maintain their former lifestyle of spending irresponsibly, even if it means extending credit card limits and ignoring a budget; champagne lifestyle on a beer budget. More appropriately known in our house as a steak lifestyle on a Bologna budget, only because having steak regularly was the hardest thing my husband gave up, but probably better for his health.

People who don't choose a new lifestyle will only regret it and possibly find themselves in a much worse situation. Don't max out all credit cards before filing bankruptcy or using credit cards to maintain needless spending and old lifestyle.

Your lifestyle overall will improve by:

  • buying more whole foods, buying in bulk, and planning meals ahead of time.
  • People who give up expensive habits such as smoking and take-out food, save money while getting healthy.
  • You can find Chinese or alternative health schools in your area to find discounted alternative medicine and acupuncture. Massage schools offer really cheap, sometimes free massages too.
  • Go vegetarian a couple nights a week and save on the meat portion of your grocery bill.
  • Lower your cable bill and inadvertently watch less TV and get outside more.
  • Parent staying home with child/children can improve and reinforce traditional family values.

I would have been the last person on earth who thought I'd be staying home with my child and learning how to cook. I only knew myself as a fast-paced working girl with goals 100 miles high. Since my layoff (2 years ago), I've enjoyed making the sacrifices to stay at home. I started a wonderful hobby of writing on Hubpages and I learned there is life without triple shot mochas. I am happy with this new lifestyle and making money with my writing. It's all about perspective and resiliency.


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    • izettl profile imageAUTHOR

      Laura Izett-Irwin 

      8 years ago from The Great Northwest

      Thanks Joe!

    • profile image

      Joe Morgan 

      8 years ago

      No problem - I'm glad you enjoyed the article!

      Thanks again for sharing, and helping to spread the word about the single income lifestyle.

    • izettl profile imageAUTHOR

      Laura Izett-Irwin 

      8 years ago from The Great Northwest

      Joe~ thanks. yes I enjoyed your article too. I wanted to know if other people were able to do this effectively. It seems my husband and I are surrounded by friends who both wife and husband work and they are maxxed out financialy. There is a certain freedom about being able to live on one income. And I oculdn't agree more that it's a worthwhile lifestyle. Thanks so much for stopping by and hope it was OK to include your link, but it was a great break-down of living on one income.

    • profile image

      Joe Morgan 

      8 years ago

      I just came across your wonderful hub. Thanks for including my post "Can You Live on One Income?" and for getting the word out about single income families (by choice!) and being a stay at home mom! It's a very worthwhile lifestyle change in my opinion (and my wife's!) ;-)

    • izettl profile imageAUTHOR

      Laura Izett-Irwin 

      9 years ago from The Great Northwest

      People can budget, it's just that they don't until they've lost nearly everything or it's absolutely necessary. THanks for the comment Ddraigcoch.

    • Ddraigcoch profile image


      9 years ago from UK

      It is surprising how many people can not budget. Great hub!

    • izettl profile imageAUTHOR

      Laura Izett-Irwin 

      9 years ago from The Great Northwest

      THank you cd tabor.

    • cd tabor profile image

      cd tabor 

      9 years ago

      very practical indeed...thanks for sharing your insights.

    • izettl profile imageAUTHOR

      Laura Izett-Irwin 

      9 years ago from The Great Northwest

      Y not~ I'm not sure why people feel so entitled. People would rather resort to crime than go without their wants.That's sad. Some end up depressed about their money situation and make it worse by getting addicted to something that costs mroe money. It's all screwed up. Practice a little self-control people!

      Thanks for your comment.

    • Y not profile image

      Y not 

      9 years ago

      Great information..The problem is most people just find it hard to control themselves and end up homeless or resort to crime..

    • izettl profile imageAUTHOR

      Laura Izett-Irwin 

      9 years ago from The Great Northwest

      prasetio30~thanks for stopping by and for your support. Hope the tips help.

      ocbill~ great ideas. I don't have much space but I've thought about doing it at a local church that allows people to utilize their garden space. Cool ideas!

    • izettl profile imageAUTHOR

      Laura Izett-Irwin 

      9 years ago from The Great Northwest

      2besure~ all of what you mention is similar to my situation. Renting does help!

      marymac47~ great idea about growing veggies in containers! thanks for the comment.

      Thank you hitdev!

    • 2besure profile image

      Pamela Lipscomb 

      9 years ago from Charlotte, North Carolina

      I have really been blessed. I have been out of work for a few years, but the up side is that I have had the time to increase my writing income. My husband has a small tree business and he had been getting good work. We also do not own a home but rent so that helps a lot.

    • marymac47 profile image


      9 years ago from Franklin. NC

      Great Hub! We went from my working two jobs bringing in about $1,400 a month to me going to $47.50 a week for about 3 years then to SSDI! My husband is disabled. You certainly learn very quickly what you can do without and unique plans of action for everything you deal with everyday! Ocbil, I grow All of my vegetables and flowers in containers since I cannot get down on my knees and get back up!! Great harvests!

    • ocbill profile image


      9 years ago from hopefully somewhere peaceful and nice

      growing your own vegetables and some fruits will help too if you have the yard space.

    • hitdev profile image


      9 years ago

      Very nice article.

    • prasetio30 profile image


      9 years ago from malang-indonesia

      Another great hub from you, my friend. Thanks AGAIN for entertaining me with your ability to bring new and useful for us. I learn much from you, including this one. I'll follow your tips to maintain my money. Vote up. Have a great day!


    • izettl profile imageAUTHOR

      Laura Izett-Irwin 

      9 years ago from The Great Northwest

      amybradley77~ Thanks for stopping by.

      schoolmarm~ Cutting back is a good challenge and I hope there will be people to come out of this recession who keep the lifestyle and simply live on less. Most people's unnecessary spending equals their needed spending- crazy! Thanks for the comment.

      seanorjohn~ Thanks for the link.

    • seanorjohn profile image


      9 years ago

      Great info and voted up. Money saving has some good tips. Mostly for UK, though.

    • schoolmarm profile image


      9 years ago from Florida

      Wonderful information! A while back I decided to eliminate some of my unnecessary spending and simplify my life. It has now become a lifestyle and to some extent, a hobby for me. Many people dread cutting back and if they would just give it a shot they might find it leads to a more enjoyable and creative lifestyle.

    • amybradley77 profile image


      9 years ago

      This is good advise, voted up. I think we all are looking at more ways to watch our pocket books right now. Thanks for some needed tips and some reminders too. A.B.

    • izettl profile imageAUTHOR

      Laura Izett-Irwin 

      9 years ago from The Great Northwest

      Great point Dave Price! I think we will continue this downsized lifestyle even when our income increases adn teh economy gets better. It's taken some stress off me having to work and I have yet to decide whether to home school my daughter- she's only 3 right now. Thanks for the comment.

      ~You're welcome Joshua Kell.

    • Joshua Kell profile image

      Levi Joshua Kell 

      9 years ago from Arizona

      Great hub. Thank you.

    • DavePrice profile image


      9 years ago from Sugar Grove, Ill

      Great advice - we came to the same point voluntarily when we decided to homeschool the kids, and we've been blessed during this downturn that we were already "downsized".

    • izettl profile imageAUTHOR

      Laura Izett-Irwin 

      9 years ago from The Great Northwest

      A.A.Z~ thanks for stopping by and leaving a comment.

      sameer~ thank you.

      Maggie South~ That's great you took a class about this stuff. People don't take it seriously until it effects them directly, but this is all important to know.

      triplet mom~ I'm learning a lot of people are in this predicament, but it doesn't have to be so bad. Thanks for commenting triplet mom.

    • Triplet Mom profile image

      Triplet Mom 

      9 years ago from West Coast

      Awesome hub as always. Great advice and its also nice to hear of someone with similar experiences.

    • MaggieSouth profile image


      9 years ago

      Excellent hub! Very good advice. I just attended a class this weekend where one of the exercises was to separate "needs" from "wants." Turns out we only "need" very few things (food, shelter, etc) to actually survive. The rest are just extra that we can cut back on or do away with altogether!

    • sameer jamali profile image

      sameer jamali 

      9 years ago


    • A.A. Zavala profile image

      Augustine A Zavala 

      9 years ago from Texas

      Great points on how to survive in this difficult economy. Thanks for sharing.

    • izettl profile imageAUTHOR

      Laura Izett-Irwin 

      9 years ago from The Great Northwest

      Robwrite~ thanks for the nice words. I'm just shocked still that we've made this work for quite a while and I know others can too.

      THanks Winsome~ i've been ealing with eBay for a while, maybe I should write something on it. It's great seeing you here!

      Christopher P~ It's part math and part mental.

      carrie450~ nice to see you. My husband and I have been doing this over 2 years now and the first thought when I got laid off was we'd never make it, but we've been doing good and are so good with our budget, we have a lot more wiggle room for doing things, movies, etc.

    • carrie450 profile image


      9 years ago from Winnipeg, Canada

      Great tips on budgeting izettl. It's surprising how much we can save when we cut back on things we don't really 'need'.

    • Christopher Price profile image

      Christopher Price 

      9 years ago from Vermont, USA

      Lots of good advice Laura. Prioritizing takes on a whole new importance when the money becomes scarce.


    • Winsome profile image


      9 years ago from Southern California by way of Texas

      Fabulous job Izzy! Having had to make those kinds of trimmings I can appreciate what you've done. When I was growing up in Texas, my mom economized by fixing pinto beans (with salt pork) and her secret spices and cornbread and milk. It is my favorite meal still today. I want to become an expert on selling ebay stuff since I have a million books and a huge collection of vinyl records. I wonder if anyone has written a hub on that--hint hint. =:)

    • Robwrite profile image


      9 years ago from Oviedo, FL

      Excellent and very timely information. Well done.



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