A little over 7 months ago my family took a huge leap of faith. My husband had a good job opportunity in another state. He had been unhappy at his former employer for years and finally had a chance to use his very specialized skills at another company.
What this meant for our family was we BOTH had to leave our former jobs to move and for a time, at least, we would be living on one income. The increase in income he received at his new job, minus the $1,000 a month we were spending on daycare made it feasible, if not comfortable.
I know a lot of my friends have the goal of becoming stay at home parents or working part-time to spend more time with their kids. I thought I’d share some things that helped make this life change possible for our family.
6 Tips for Living on a Single Income
- Reduce debt – I don’t know how people ever get to the point in their life that they have zero debt. That was not realistic for us and was never a goal. We still have student loans and car payments and while we are currently renting we will soon have a mortgage as well. What we don’t have is credit card debt. We have good credit so our interest rates are “good” but it still adds up fast. We used our tax money for 2 years to get our $8,000 in credit card debt completely paid off.
- Build an emergency fund – We would be in a bad situation if my husband, the sole provider for our family lost his job. But we wouldn’t be homeless or anything. We saved a few month’s expenses so we could get by for a little bit if something were to happen.
- Cut out unneeded expenses – When we got engaged we decided to get rid of our cable. We were constantly flipping through channels and never finding anything we wanted to watch. We went down to just Netflix for awhile and eventually added Hulu and Amazon Prime as our budget allowed. Another way we’ve saved money is my husband often drives my more fuel efficient car for his 30 minute commute to/from work instead of his large SUV. Some families may even be able to cut out having a second vehicle. We also gave up traveling for a few years to make our new budget work.
- Make a new budget – Things will probably be tighter financially so it’s important to adjust your budget. We’ve started spending more money on groceries to cook at home and less on eating out and are saving money that way. One thing that worked for our family is a “Spending” checking account for groceries, gas, entertainment, eating out, etc and a “Bills” account. Each payday I take out 50% of the money we need to pay our bills from the Spending account where my husband’s check gets deposited and the rest is leftover for us to use as we need for the month. Also our daycare cost was about 2/3 of my monthly take home pay so eliminating the need for daycare saved our family $1,000 a month.
- Look into your tax withholdings – Next year we will likely get a much smaller tax return but by adjusting our tax withholdings we’ve been able to free up more money on a monthly basis to pay our bills.
- Be a team – My husband doesn’t look at his income as “his”money. It’s OUR money. We both have access to it as needed and we talk about how we spend it. Likewise I care for OUR child, OUR pets, and sometimes OUR home. My homemaker skills definitely still leave something to be desired though!