How to Make Living on One Income Work

There are many reasons couples may end up living on one income. Some want to be home to take care of their children while others may be dealing with layoff or medical issue. Whatever your situation, living on one income can be tight, but it certainly isn’t impossible. There are, however, some things that you need to think about and give some serious planning before you make the leap into single income territory.


Here are just a few:

• Stop eating out. While eating out is fun, it is also expensive if you do it on a regular basis. Cut back to once a month and you’ll save quite a bit by cooking at home instead.
• Work out a budget ahead of time. While everyone should have a budget, it can be even more important if finances are going to be tight. Sit down with your significant other and figure out what your expenses will be and where you can cut back.
• Have a cushion. If you can, go into a one income situation with a comfortable amount of savings to get you through should any unexpected situations arise. There will likely be a learning curve when it comes to living on one income and you’ll need a little padding to get you through those first few months and to prepare for all those incidental expenses that crop up.
• Buy new only when you need to. If you’re going to live on one income your days of buying everything new may be at an end. That doesn’t mean you can never have new things, but focus on getting them where it really matters rather than just purchasing everything new. Clothes, cars and furniture are available in abundance used, and are often of perfectly good quality.
• Research frugal solutions. There are loads of resources on the web that are designed to help you save money around the house. Spend a little time with your significant other searching through this information to find out if you can apply any of these solutions to your own home and save every penny you can.
• Determine what’s really important to you. If it really means a lot to you to stay at home with your kids—more than say, taking a vacation to Mexico—figure out a way to work your budget so that your priorities are highlighted and the things you can do without are deemphasized. You may have to forgo some pleasures but you’ll appreciate it in the long run.
• Do a trial run. If you know you’re going to be going down to only one income, start living on just that for a few months so that there is less of a shock when the time comes. You’ll be able to work out the kinks while you still have that other income as a backup.

Source: Financial Highway