Living on one income is a dream of many. However, most think it is impossible and will never work. It can be done – you just need to know what to do 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 a single 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. It took some planning for us to move from two incomes to one. And, while we thought we had everything covered, I’ll admit that we had some rough times.
There were months where we struggled to pay our bills. We had times when we did not have much money to live on after our necessary expenses were covered. However, the one thing we both agree on is that it was worth it. Being a mom was something I waited a very long time to have happen.
It was worth the sacrifices we made in order to be home with them every single day. It wasn’t easy. But, 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 child(ren), or if you will no longer have your job, you need to find a way to move from two incomes to one. It is a scary thought. You may be worried about paying your bills and providing for your family. I get it, as we felt that too.
The thing is, the key to living on one income is to be intentional with your finances, your priority and the way you look at life.
TIPS FOR LIVING ON ONE INCOME
Work with your partner or spouse
The first step in moving from two income to one is to make sure your partner is 100% on board. You need to work together and discuss all aspects of the change.
When my husband and I made this change, I remember feeling guilty spending money. I thought since I was no longer contributing financially, I had no “right” to spend money.
My husband and I had a long talk about my feelings. He reminded me that my contribution was saving money that we would otherwise spend on day care. He also told me that I am doing the job that meant the most to him 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.
Work together and discuss your fears and expectations. You both need to be on the same page if you are going to make a successful transition.
Practice living off of one income
Before you make the cut to your income, practice living on just one income. Yep – practice!!
For instance, when I was pregnant with our first, we knew our goal was for me to stay home with our baby. Around 7 months before I was due, we started using only 75% of what I made and adjusted our budget accordingly.
Once we adjusted to that, we changed it to living on 50%. We continued to use less and less of my paycheck to meet our financial responsibilities. Eventually, our budget worked without my income.
Try to make the slow transition and build up your savings while slowly adjusting your budget and lifestyle.
Adjust your budget
If you are going to make less money, then your budget must be adjusted accordingly.
To start, look at your budget and find out which line items you can reduce or eliminate. Perhaps you can cut back on cable or have dinner out fewer times a month. When you make less money, you have to find a way to reduce your spending.
The other alternative is to replace your income by finding says to save more money. You may find that there are ways you can save as much as $12,000 in a year.
Make sure that your budget works for you on only the income that will continue.
Find a way to be content with less
This is one of the toughest parts of moving from two incomes to one. 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 $37,000. 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.
Read More: How to Get Out of Debt
Negotiate Your Bills
One thing that can help you live on one income is to reduce the amount you owe to your creditors. Reach out and talk with them about a possible rate reduction or even monthly payment amount.
Negotiating your bills may seem like a crazy idea, but you never know what you will happen unless you’ve tried.
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.
Find a way to work for yourself
You may learn that you can’t live on one income. If you are quitting or losing your job, it may be the perfect time to work for yourself.
Many times, parents who stay home with their children will find a way to bring in a little money (in a way that fits into the family schedule. This could be done through all sorts of things including blogging, babysitting, freelancing, or more.
Read More: 75+ Ways to Make Money
Continue to save money
When people drop to one income, it seems the savings account 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). If you don’t have an emergency fund, you will not be prepared when the unexpected happens. Trust me. It will.
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 to live on 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. The best part of all is living a life with no regrets.