Living On One Income
How to Succeed as a One-Income Family
Is financial freedom possible for a family living on one income? Absolutely! Here are some great family money management tips to help you thrive on a single income.
There are many reasons why some married couples live on one income. In some instances, even though both spouses have jobs, the couple chooses to live on one income and use the other to eliminate debt or save for retirement.
One spouse may choose not to work in order to make time for other pursuits such as volunteering or additional education.
Other times, one of the spouses may not be able to work. This could be due to a health issue, the need to care for an elderly parent, or the inability to find a job in the current economy.
Stay-At-Home Mom (or Dad)
One of the most compelling reasons for living on one income is so that one parent can devote more time and energy to raising their children. Although many families are happy to balance two careers with the responsibilities of child-rearing, some feel cornered into that situation because they do not think they could make ends meet by giving up one of their jobs.
Although this is certainly true in some cases, if you feel this way it would be worthwhile for you to consider the following in determining whether you really gain that much economically by keeping both jobs.
- How much do you really make from your job? Be sure to take the net amount after taxes. (To be fair, you should also include benefits like health insurance and employer contributions to retirement plans.)
- What would childcare cost you?
- What are your transportation costs to work and to your childcare provider?
- You should also consider the costs of taking time off of work to care for your children when they are sick and to get them to appointments.
- What are the costs of having lunch at work versus at home?
- Is there a cost to maintain the wardrobe you need for work?
Tips for Living on One Income
Regardless of why you are living on one income, here are some things you can do to cut down on your costs and stretch your single income.
- Live on one income while you still have two salaries. If you are able to plan your transition to single-income living, it will be a good test for you to cut your expenses while both of you are still working to see if you would be able to survive on a single income. You also will get the added benefit of saving more money for later.
- Plan your spending very carefully. Sit down together and do some serious personal budget planning. Both spouses must thoroughly understand how finances in marriage will work on a single income. This personal budget worksheet is an excellent tool to help you create your spending plan.
- Learn to live with one car. Automobiles are expensive to drive and maintain. The working spouse could carpool or take public transportation on at least some of the days. The stay-at-home mom or dad could plan appointments on the days that the car is home.
- Make use of opportunities to adopt a more frugal lifestyle. The stay-at-home spouse may have more time for budget meal planning in order to save money on groceries. He or she may also have more time to shop around at thrift stores and garage sales to reduce spending.
- Look for ways to make supplemental income. Just because one spouse has given up a regular job, doesn’t mean he or she can’t look for extra ways to make money. An occasional part-time job at nights or on weekends will provide a change of pace for the stay-at-home spouse. It also gives an opportunity for the full-time working spouse to spend some alone time with the children.
When our oldest son was born over 25 years ago, my wife and I made the decision to start living on one income. Although we have faced some challenges along the way, we have never suffered financially by making that decision.
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