How to Survive a One Income Household (If You're Not the Breadwinner)
Hammer Down Your Monthly Budget
A budget is the cornerstone of personal finance. While it may seem daunting, a budget is nothing more than a written plan for your money. It includes every cent you make or spend that month, from rent and groceries to your coffee addiction.
A good guide for budgeting beginners is the 50/20/30 rule. Half of your income should be fixed expenses, like rent or mortgage payments, insurance, magazine subscriptions, and tithing (if you choose to do so.) Another 20% should be dedicated to long-term financial goals, like paying down debt or retirement. The last 30% is devoted to flexible expenses or things that may change, like groceries, utilities, and transportation expenses.
Build and Maintain an Emergency Fund
One of the biggest stresses on a one-income family can be the threat of an emergency. A bad tooth, a new transmission, or a case of the flu can prove to be devastating when money is tight. While having an emergency fund is important to any household, it can make the difference between an eviction notice and this month's mortgage payment if you have only one source of income to rely on.
An emergency fund should be able to cover at least three months of expenses. This includes housing, food, insurance, transportation, childcare - every bill you would normally have to pay. This can seem like a daunting task, but like any goal, it should be taken one step at a time. The first $1,000 you save in an emergency fund is one of the most important steps you could take to financial security.
Why do you live in a one income household?
Save Money Wherever You Can
As Benjamin Franklin once said, "a penny saved is a penny earned."
If your role in the household isn't earning, your role should be saving the income that is earned. There are plenty of things you can do to stretch your family's hard-earned dollar.
Save Money Online
There are many popular sites dedicated to saving money online. My personal favorites are RetailMeNot and Ebates. RetailMeNot is a coupon site that also has a Chrome extension to automatically apply the best one to your shopping cart. Ebates is different is that gives you cash back for purchases made online from popular brands.
Don't Truly Rely On One Income
Even if there is only one adult working outside the household, it is dangerous for a family to rely on one income alone. Supplemental income can pay help pay off debt, save for your kid's college fund, or provide that much needed vacation.
Investing early and often is the biggest key to wealth-building. Dividends earned from investment accounts allow you to make money without any extra effort.
© 2017 Katleigh Merrier