The information provided on this website does not, and is not intended to, act as legal, financial or credit advice; instead, it is for general informational purposes only. Information on this website may not be current. This website may contain links to other third-party websites. Such links are only for the convenience of the reader, user or browser; we do not recommend or endorse the contents of any third-party sites. Readers of this website should contact their attorney, accountant or credit counselor to obtain advice with respect to their particular situation. No reader, user, or browser of this site should act or not act on the basis of information on this site. Always seek personal legal, financial or credit advice for your relevant jurisdiction. Only your individual attorney or advisor can provide assurances that the information contained herein – and your interpretation of it – is applicable or appropriate to your particular situation. Use of, and access to, this website or any of the links or resources contained within the site do not create an attorney-client or fiduciary relationship between the reader, user, or browser and website owner, authors, contributors, contributing firms, or their respective employers.
Credit.com receives compensation for the financial products and services advertised on this site if our users apply for and sign up for any of them. Compensation is not a factor in the substantive evaluation of any product.
In some marriages, one spouse dreams of staying home while the other works. That’s particularly true of parents with young children.
Living on one income is undoubtedly a challenge, but certainly not an unattainable fantasy — even if you don’t make six figures or more.
Here are 10 tips to make a one-income life work for your family.
Get on the same page as your spouse. Dropping to a single income is a major change that requires lifestyle adjustments by both of you. Overspending can quickly lead to money troubles and resentment that could irreparably damage your relationship.
Draw up a new budget that assumes one of you is no longer in the workforce. These are a few of the expenses you may be able to cut completely.
Then there are other line items that you can probably reduce. Maybe you can stretch the time between haircuts now that you’re not in an office every day. Or you may have fewer takeout dinners because you’re home to cook.
Some people suggest taking this new budget for a trial run before you actually quit your job, but that many not be practical for some families. Until you actually leave the workforce, you’re going to need to pay for child care and other work-related expenses.
Now that you have a one-income budget in front of you, what does it look like? Are your expenses far beyond the money your spouse brings in each month? Don’t despair. We’re just getting started here.
Take a second pass on the budget and see where else you can trim. Consider the following.
Look at every line item with your spouse and ask: Do we need this and, if so, is there a way to pay less for it?
Perhaps the best way to free up a lot of money in your budget is to get out of debt. If you weren’t making a $300 car payment or sending $200 to credit card companies every month, wouldn’t it be easier to get by on one income? Think about how you can pay off that debt ASAP. Whether it’s student loan debt or credit card debt, falling behind on payments can affect your credit score. Read this guide to find out how to improve your credit score and then keep an eye on how the changes you’re making may be helping your score by viewing an overview of your free credit report, updated every 14 days, on Credit.com.
Dropping to one car can help you reduce debt and save money. This requires a serious lifestyle change for many families, but it can be worth it.
Getting rid of a car often means:
This strategy can be extreme, but I have friends who make it work. It’s easiest if you live in an area where you can walk to a friend’s house or a local park. It would also work well if you live in an area with good public transportation.
Think twice if you live in a rural area. It’s not good to feel isolated and overwhelmed from being stuck at home all day.
Take careful stock of your current home and future plans. If you have empty rooms and aren’t planning to have more kids, then maybe selling your home and getting a smaller place is a smart choice. Not only can you end up with a lower mortgage payment, but your utility bills and property tax assessments might shrink too.
Chances are, you have plenty of stuff in your house you can sell. Doing so gives you a nice cushion in your bank account before leaving your job. No matter how well you think through your budget, something could throw you for a loop.
Your emergency fund is going to smooth out any wrinkles in your budget. So sell your old, unwanted stuff for top dollar and bank the cash.
What types of insurance does your family get through your employer? How can you replace those policies?
It’s vitally important to avoid gaps in crucial coverage. For health insurance, the federal law COBRA may let you continue your health insurance after you leave work, but the price can be astronomical.
Other options include signing up for coverage through your spouse’s workplace benefits plan or buying medical insurance on a government exchange.
Finding cheap entertainment is another secret to successfully living on one income — no more heading to the mall for no particular reason on a Saturday afternoon. You may also have to skip Disney in favor of day trips closer to home.
Even after you’ve gone through all the steps above, you may find the budget is still too tight to make one-income living work comfortably for your family. In that case, don’t assume that staying home with your kids means you have to forgo earning money completely.
Depending on your circumstances, you may be able to work out a telecommuting arrangement with your current boss that allows you to work from home part-time. Another option would be to find a work-at-home job or use one of these odd and unusual ways to make extra cash.
Finally, don’t overlook other employment opportunities for your spouse. Maybe he or she could find a different job or apply for a promotion that will give your family the money you need to stay home.
Image: Ocskaymark
April 11, 2023
Uncategorized
September 13, 2021
Uncategorized
August 4, 2021
Uncategorized