Are you preparing to become a stay-at-home parent, dealing with a recent layoff or saving up for a big purchase? Even though it may sound impossible, you can live on only one income and make it work.
Whether you’re single or married, have children or not, these three simple ideas are essential: create a plan, spend less and save more.
Before you think that sounds too easy, let’s break down the specifics:
Create a Plan
Successful single-income families don’t just happen — they require a strategic evaluation. First, create a realistic budget to better manage your money and stick to it. If you need to review it later on, that’s fine, but be sure to get off on the right foot.
Next, stay on top of your bills. Ensure your regular financial obligations are a priority so you don’t end up paying any unnecessary fees or fines. You can also focus your efforts on paying off debt initially, which will free up resources later.
Finally, if you have too many credit cards and loans to keep track of, consider consolidating them at America First. Our low rates and flexible terms will help you save time and money. Plus, having all of your loans in one place will require significantly less mental effort.
If you are moving from multiple incomes to a single income, you’re going need to make significant financial changes. Don’t try to maintain the lifestyle you had with two incomes. Instead, try to make spending sacrifices — such as buying generic instead of brand-name products, or scaling back a planned vacation. It’s much easier to save more when you spend less.
And when it comes to shopping, determine if you really need to go at all. Can you put together some meals using what’s already in your pantry? Do you really need a new pair of shoes? When you head out, always look for the best deal and use coupons or discount codes.
Also, take a look at your housing situation. If necessary, consider moving into a more affordable living space, or refinancing your mortgage to a lower rate. If you already have a reasonably priced home with affordable monthly payments, fix things yourself instead of immediately calling a professional.
Even though you’ll be cutting down on what you spend as a one-income family, you should still regularly save. A rainy-day fund can give you peace of mind if any unexpected expenses or emergencies pop up. America First has just the right tool to help you set aside some funds, too — dedicated savings accounts, which provide competitive dividends on automatic transfers that you can set up.
Additionally, you can actually save money by not working. If just one of you is going to the office every day, that means only one vehicle is commuting — set aside what you used to spend on gas and upkeep. Those at home will also eat out less than someone at an office and the entire family should do the same — leftover food helps create leftover funds.
Whether your single-income status is temporary or permanent, this advice applies for the short term and the long haul. Making a plan, spending less and saving may seem intuitive — because they are. It’s very similar to the “secret trick” to losing weight: diet and exercise. However, putting these principles first, discussing your strategies and writing things down can truly make a difference.