Living on one income is a dream of many. However, they think it is impossible. You can do it – you just need to know how to make it a reality.
Before my husband I even got married, we talked about children and family. We both agreed that we were willing to make sacrifices so that I could stay a home with them. That meant changing things and living on one income. We both wanted for one of us to be there to raise them and be a part of their afternoon when they would get home from school.
As soon as we learned we were pregnant with our first daughter, we started to plan ahead for the day she arrived and I would quit my job and stay at home with her. We thought we had everything covered, but to be honest it was rough.
There were many months when we struggled to pay our bills. We had times when we did not have much money to live on. However, the one thing we both agree with is that it was worth it all. Being a mom is something I waited a very long time to have happen. It was worth the sacrifices we made in order to be there wth them every single day. It wasn’t easy. And, if I had the chance to do it over again, I would not change a thing.
If you are wanting to stay home with your kids or if for some reason you will no longer have your job or be able to work, it can be scary. The first thing that comes to your mind is paying your bills. I get that.
The key to living on a single income is to be intentional with your finances, decisions and the way you look at life.
Work with your partner. If you really want to change to living on one income, make sure your partner is 100% on board. You need to work together and discuss all aspects of the change.
I remember initially always feeling guilty to spend any money because I was not physically earning it as I use to. My husband reminded me that I am contributing though as I am keeping the money we make in our family and not giving it to a day care. I am also doing one of the hardest jobs in the world – raising our children.
Once I got over my guilt, I was able to spend a little here and there (as we had budgeted) and felt much less guilty about doing so.
Plan ahead. If you really want to try to live on one income, then you need to prepare for it. The way we did this was look at what I was bringing into the home from my paycheck. To start, we tried to live on just 75% of what I made. Once we adapted to that amount, we changed it to living only on 50% of my income and so on, until we go to the point of having none of my income figured into our budget.
Adjust your budget. This ties in with the first step – trying to live on less income. You will need to look at your budget and find out which areas you might be able to reduce. You may find ways to cut your wireless bill, maybe you can reduce your cable bill, or you may find other countless ideas. When you have less money to live on, you will have to find ways to make those changes.
One great resource is our post to help you save $12,000 in a year – it is filled with all sorts of great tips and ideas to help you really reduce your spending and find hidden money!
Take a good look at your spending. Chances are that there are line items in your budget you could live without. Perhaps you do not really need to have dinner out twice a week. And, the daily coffee run? Is that needed?
You really need to make sure that you have a budget created which covers your expenses – on a single income. Here are some simple ways to cut items out of your budget, or to even lower what you pay.
Find a way to be content with less. This can be tough. You may have to drive your older car for a few years longer than you were planning on doing, as is the case with us (read more about that here).
Happiness comes from memories and people and not things. Once you can find contentment with having less, you will feel better. Live with what you need and not what you think others feel you should have.
Get rid of your debt. While it may not be completely possible to have all debt paid off before you eliminate one source of income for your household, it is worth doing your best before that happens. This was a mistake that we actually made.
Our debt was more than $35,000. It was a struggle to cover not only our monthly expenses, but also our We had debt – more than $30,000 – when I was no longer working. We struggled to cover the monthly expenses as well as the debt each month. I can’t tell you how many times I had to rob Peter to pay Paul. It was not pretty.
Once my husband and I sat down and agreed to get out from under the debt, we both felt better. It took us 2 1/2 years of a lot of very hard work, dedication and sacrifice, but it was so well worth it. Not having the monthly obligation of debts hanging over our head remove a lot of stress from both of us.
Learn more about How to Get Out of Debt.
Negotiate your bills. In addition to adjusting the budget, you may want to try to actually reduce the monthly bills. You might be able to reduce the credit card interest rates or even the amount of your bills you pay every month! You never know unless you’ve given it a try. Make sure you learn more about How to Negotiate Your Bills.
Live more frugally. This may sound like it goes without saying, but it is important. This is where you take the time to plan your meals and your shopping trip. It may mean moving your shopping to Aldi to save more. Perhaps it means changing to the store brand rather than the name brand for some of the things you use.
If it is important to you to live on just one income, then you may need to make changes to the way you live. Here are just a few things that really can make a difference:
- Drop cable completely and use other options to cover entertainment.
- Start always planning your meals and creating a shopping list (never buy something not on the list).
- Use coupons every time you shop (at the stores where you can).
- Cut and color your own hair.
- Stick with consignment sales or clothing swaps to get kids’ clothes (then sell/trade your kids’ clothes when they outgrow them).
- Learn to cook! You can recreate a lot of restaurant items at home. Check out Pinterest for copycat recipes and then make them yourself at home for much less.
Increase your income. For most, making more money at your job may not be enough (and may not even be possible). That is when it is time to see if there is a way to make money at home. This could be done through all sorts of things including blogging, babysitting, freelancing, or more.
You may want to check out this list of 15 ways you might be able to make money at home for other great ideas.
Still find a way to save. When people drop to one income, it seems savings always moves onto the back burner. Families often look at the regular expenses and make sure those are paid, but don’t forget about savings!
You need to make sure you still build up your emergency savings and that you are continuing to save for retirement (and college if you so desire for your kids).
All too often people forget savings and then, when something happens and they need money, they end up back in debt (or further into debt).
Whether your goal is for one of you to say home with your children or if you are being forced into having just one income, there are things you can do to make ends meet.
For me, there is no greater joy than staying home and being there for my kids. It is worth the sacrifice to make it happen. Best part of all is living a life with no regrets.