Five Tips for Living on One Income
If your situation has changed and your family is shifting from living on two incomes to getting by on just one, the impact on your finances will be quite significant. Perhaps one of you has lost a job, or decided to go back to school, or take a chance and start a business. Whatever the reason for your family's change in circumstances, there are ways to ease your money worries and stay focused on what really matters--the health and happiness of the ones you love.
Cooperation and clear communication are key to successfully surviving a major change in your family's cashflow.
Note: This article only provides an overview of tips for living on one income. Everyone's situation is different and it would be prudent to seek out additional information and support to help you adjust to your particular change in circumstances. You may find it helpful to talk to a credit counselor, employment counselor, financial planner or other professional for additional guidance.
Living on one income isn't about one partner suddenly having to double his or her salary in order to make ends meet. Nor is it about cutting expenses back so much that you can't have any fun. These five tips on how to live on one income are designed for families who, by choice or through circumstances beyond their control, have to live on one income when they used to live on two.
1. Have an honest conversation about living on one income. Make sure your spouse and kids have a realistic understanding of how your family’s finances are going to change when you start consciously living a lean lifestyle. Living frugally won’t work if everyone isn’t on the same page.
Whether you to or have to live on one income, you must be able to create a household budget that is realistic. Ask for input from the other members of the family about what the priorities should be: Is it more important to have weekends and evenings free to spend together as a family? Or would your kids rather you both work long hours and extra shifts just so you can go on an expensive vacation every year? Living on one income requires making conscious choices about what really matters.
2. Make teaching your kids financial literacy a priority. To live a frugal life as a family and meet all your needs on one income, start teaching your kids how to develop good money habits of their own. Even if your family isn’t planning on adopting a frugal financial mindset, it’s never too early to teach your kids about how to manage their money.
3. Agree as a family to adopt one good money habit a month. What is a good money habit? Keeping your bills organized and setting up proper space to manage your finances. That’s a good money habit. You could also make a commitment to only pay cash for the little indulgences, instead of having the money streaming from your debit card with a latte here, a magazine there. Paying for things in cash is an excellent way to reduce debt and stay within your budget. When the pocket change you budgeted for small purchases each month is gone, that’s it! No more spending until next month. If you want to (or need to) live on one income, then good financial habits are a must.
4. Teach your kids how to understand the difference between wants and needs. If you are serious about living comfortably on one income, then you need to help your kids understand and identify the things that they want versus the things that they need.
5. Spend discretionary funds on experiences, rather than more stuff. Teach your kids that life can be fun, rich, and rewarding when you focus on the quality of life experiences you have rather than the amount of stuff you own.
Successfully living on one income requires clear, honest communication and a commitment to developing better money habits as a family, together. It may seem scary at first to drop experience a change in your cash flow, but you may be surprised at how your life changes in positive ways when you realize how much you and your family already have.
Why is your family living on one income now?
© 2017 Sadie Holloway