Living on One Income and Living Well
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Living on one income is not as easy as it was in the last century. It requires hard work and determination — and some of these strategies.
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Fifty years ago it was commonplace for just one parent (usually dad) to work. One income was sufficient to pay the family’s bill. Today, there might be a number of reasons why a family would be living on one income.
- Mom or Dad might be laid off from work or unable to find a job.
- Mom or Dad might need to leave the workplace for health reasons.
- Mom or Dad might decide to stay home to care for the children or an aging parent.
- One parent might be in school or other vocational training.
- There might only be one parent in the family. Single parenting is a tough job, not to mention it’s difficult economically.
- You don’t want to rely on two incomes in case of health or economy-related issues arise in the future.
While our family currently earns two incomes, we try as best we can to make it living on one income, mainly because of reason #6. If one of us became unable to work or the economy took a major dive (again), we’d like to be living under our means to be able to weather the storm.
I never expected that our family would be as hard pressed as we were in 2007. We’d been living beyond our means and got ourselves in a mess of trouble. Thanks be to God, we got out of debt.
Getting out of debt and living on one income have been some of the best things we’ve ever done.
Living on One Income
Whether you want to or have to, living on one income doesn’t have to be heartbreaking. Here are some of the things that we’ve learned the hard way to make living on one income possible:
Monthly Accounting Forms
1. Create a budget based on one income.
Create a zero-based budget in which every dollar has a name. Determine all your required expenses and list those. Subtract that amount from your income. Anything left should go toward savings (like an emergency fund) and discretionary spending.
If there’s nothing left, then you need to figure out how to increase your income or reduce your spending.
2. Build an emergency fund.
An emergency fund is a set amount of money that you don’t touch unless you really have an emergency. Dave Ramsey sets a starter emergency fund at $1000. Folks disagree on what your longterm emergency fund should be. We have nine months’ to a year’s worth of expenses socked away in an account we don’t touch. It’s liquid in case we need it, but we don’t touch it. Experts’ recommendations range from three months to a year.
You will have to decide what you need based on your particular circumstances. If you own your home outright and have no debts, you might not need as much as someone with higher monthly expenses. Likewise if you know you could find a new job quickly.
3. Reduce expenses wherever you can.
If you don’t have an unlimited budget — we don’t — then keeping a handle on expenses is almost a full-time job. Costs can creep up when you’re not looking. A couple extra trips can add up. (I’m looking at you, Target.)
As Mad-Eye Moody says, your spending needs “constant vigilance”. You can’t turn a blind eye to your bank account. Sodas might become a special occasion treat — and cause for a picture! — and that’s okay!
Remember there are lots of little ways in which you can cut back that will ease the strain on your wallet:
- Gifts
- Vacation
- Groceries
- Birthdays
- Entertainment
- Baby Stuff
- Cars and Gas
- Clothing
- Home Improvements
- Household Expenses
- Christmas
- School Stuff
4. Enjoy simple pleasures.
You don’t need a ton of money to live a good life. You might need a little creativity, though.
Homebaked always tastes better than store bought — and it’s cheaper, too. Books and movies are free at the library. The park is just around the corner. Second-hand bikes sell for a song. Pinterest is chock full of ways that you can live frugally.
You don’t need to be down in the dumps if your income isn’t soaring. Most of the world doesn’t have all the resources that we do. Chin up, buttercup, you can rock this.
What do YOU think?
What has worked for you living on one income? Let us know in the comments section.
Originally published August 27, 2015.
Any advice for a family with decent but fluctuating income? My husband and I own a successfully landscaping business but our income varies greatly from month to month and nearly stops during winter months. We’ve been “winging” it without a budget for a long time but have racked up nearly 30k in debt between credit cards and personal loans.
How do you manage finances properly when you have no idea what your income will be month to month?
Been there! One of us has been self-employed our entire marriage. This is what we finally figured out: http://lifeasmom.com/2011/02/paying-off-debt-when-youre-self-employed-frugal-friday.html It works to pay down debt, as well as just build savings and manage well.
I live on disability and it isn’t much I also get some child support for my grand daughter but that can’t be counted on every month-by the time I pay my mortgage which isn’t a lot I bought a fixer upper for cheap, utilities, car insurance and 1 credit card I have nothing left thank God I have a mother who makes good money and helps me out when I need it. I have NO money to put in a emergency fund or into a savings for that matter. I love this article and hope it helps people good advice
How wonderful that you are such an invested grandmother! Good job!
We have chosen (for reasons other than financial) not to have a TV. If we want to watch a movie we use our laptop. Whenever we’re tempted to get a TV we think of our original reasons but also the financial. If you have a TV you pay for the TV, the entertainment center, the movies, the cable/dish/whatever, the game console, the games…. it adds up to a lot of money. Since the laptop isn’t quite as much “fun” as a TV is we spend a lot less on new movies or rentals (because we watch only a little.) And we don’t get new video games. We have friends with a Wii so if we want to play we spend time with them. We’ve been married 5 1/2 years and have a 2 1/2 year old son and except for the occasional wish for a Wii we don’t miss it and our pockets (and hearts) have been fuller.
Sounds like a great strategy that fits your family well. Good job!
I love all of your suggestions–our family employs them, too. One of our best ways to keep our one income budget in check is to always eat at home. Eating out is not just expensive, it is often more of a hassle than it is worth. Most of the restaurants we can reasonably afford with two adults and three kids serve food that we can replicate ourselves for a fraction of the cost. Besides, our family likes cooking, so eating “in” is often more of a treat than eating “out.”
Eating in definitely saves money. For our family, with few outside hobbies, restaurants are a little splurge we allow ourselves once in awhile. Food is our family hobby, actually. Plus, I think having a little mad money helps us stay the course.