Living On One Income
Part 1 - Setting a Clear Budget
There are lots of reasons why families have to live on one income, a new baby, single parent, husband loses his job or simply because one of you wants to spend more time with your children.
Whatever your situation is, living on one income can mean it’s time to cut back, or it can mean that now is the opportunity to slice your spending in half by making a few clever budget changes.
To start at the very basics it is absolutely essential to look at your cash flow, what money is coming in and what money is going out.
The first part should be easy, simply list every penny of income you receive on a regular basis every month.
This might be before you give up a second income to see if you can afford it, or this may be your single income that you are living on now.
You should add a realistic amount for food and other essentials such as diapers for your little ones or any other costs that you have to pay on a regular basis. These are your essential monthly costs.
But don’t worry because there are lots of things you can do to reduce the costs. The first place to start is on the list of items that you made for your essential monthly costs.
Part 2 - How To Save Money And Make It Work
In part one we talked about how to set your budget of monthly expenses. Now It’s time to reduce those costs so living on one income can be a reality.
First, go through your list of monthly bills and see how you can reduce each one. Quite often you can call credit card companies and get a reduced rate. You may be able to switch cell phone providers or find a lower rate.
Many people don’t take advantage of offers that come through the door for cheaper monthly cable or a lower monthly telephone service. Also, one of the easiest fixed costs that you can lower is insurance. Call all the car or home insurance companies and get them to beat each others offer. As long as you are realistically lowering your monthly costs then you are going in the right direction.
Then take a look at your existing credit. If you have good credit then you are in a good position to shop around for a better rate car loan or a better mortgage. If your credit isn’t great then log onto the three credit companies, Equifax, Experian, and TransUnion.
These will give you practical information on how to fix your credit so that you can get those monthly costs down by either consolidating your debts or replacing them with loans over a longer lending period or with a better interest. Again, be careful you don’t end up paying more.
Then have a look at all the things that can buy cheaper, like cheaper gas, cheaper brands of food. There are lots of ways to spend less on the things you buy on a regular basis by finding either sales, coupons or special offers or buying it somewhere else where it’s cheaper.
Then comes the part where you have to look at all the things you can cut out of your budget all together. Do you have any monthly subscriptions or memberships that you don’t really use anymore? Do you spend money on services or products that you don’t really use anymore? Do you really need those expensive brands?
If it isn’t, and you have really tried to squeeze every last dollar out of the costs then you may have to reconsider your situation. You could either start cutting things out of the budget like using only one car, one cell phone, or go back to the income and find ways to increase what’s coming in by finding a better paid job or working from home in the evenings.
Either way, try and be creative in thinking about the ways you could save money so that living on one income is a comfortable step and not a financial nightmare. With a little thought and planning ahead you may be able to get by living on one income easier than you think!
