From Surviving to Thriving: How to Live on One Income Easily
Living on one income can seem daunting, especially in today’s economy. With rising interest rates, living expenses, inflation at an all-time high, and absurd health insurance costs, our current situation may make it seem impossible. But I want to encourage you to see it differently. With strategic planning, thoughtful spending, and a positive mindset, you survive and thrive on one income!
I’m very passionate about sharing the tips and techniques we’ve used over the past few years that made living on one income possible. We paid off all our debt, including car payments, student loans, and medical debt from our son’s cancer treatment, all on a single income. If you know anything about our family, you know that our son has been fighting cancer since he was 4 years old, and there have been numerous hospital stays throughout that time when I was away from my other children and my husband had to take time off work to care for our other kids as we had very little help with child care. Our household income was at an all-time low, and had we not worked tirelessly over the last few years before his diagnosis to pay off credit cards and increase our emergency fund, we could have lost everything.
Because of the changes we made to our habits and monthly expenses before his health issues happened, we were able to manage the unpaid leave and unexpected expenses throughout this time.
While most families will not have to face the difficult situations we’ve been in, it’s still a good idea to learn how to live below your means and adjust to living on one income. You never know what could happen, and careful planning and putting extra money away in a savings account are always great ideas.
How to make living on one income easy
When my husband and I first got married, things were tight. We lived with family for a long time because we didn’t make enough money to get our own place. We had 2 young children, I was in school, and my husband was not making much money. Things were tough, and I hated feeling constantly stressed over money, wondering how we’d ever reach our financial goals, buy our own home, or even have enough money to make it to the end of the month.
Then I realized something. If we couldn’t bring in extra cash right away, we needed to learn how to make the money we did have coming in stretch as far as possible while we worked to increase our family’s income. I started looking at our bills, debt, and monthly income and created a realistic budget we could stick to. It wasn’t pretty, and for a good 6 months, we had maybe $10 left after every monthly payment had been pulled from our bank account, and we bought enough Pasta Roni to get through for a little bit longer. It was humbling. We ate more processed junk than I’d like to admit, but it was cheap, kept us relatively full, and helped us pay our bills. Our new budget helped us tell our money what to do instead of wondering where it all went every month.
We’ve had seasons when I worked part-time, and we were a dual-income family, but these were very brief periods of time, as we always wanted me to be a stay-at-home mom and be our kids’ main caregiver.
Since then, our income has increased, our budget has shifted, and we’re committed to revisiting our long-term goals every month to ensure we’re on the same page about them. We’ve learned a lot along the way, good and bad! Today, I’m sharing everything we’ve learned so you can make living on one income as simple as possible.
Related post: How our family of 8 spends less than $1000 a month at the grocery store
Create a realistic budget
The best decision we made as a one-income household was to create a realistic budget we could stick to every month. What good is a budget if it’s too rigid? Telling your money what to do is crucial, especially for a single-income budget, but it has to be achievable, too. For example, our grocery budget is $400 every 2 weeks. We usually spend around $350-$375, but giving our budget a little wiggle room allows for unexpected purchases, price increases, or a little extra cash when items are on sale and I want to stock up.
There are many options for tracking expenses and income, but my favorite is a spreadsheet on my computer. Plus, it’s free! I list all our monthly expenses and bills, as well as subscriptions, money for date nights, birthdays, holidays, and any other upcoming expenses so we can budget for them. Then, I list the due date and the amount due for each category. My husband’s paychecks automatically deduct a certain percentage for retirement savings, so I don’t add this to our budget spreadsheet, but if your paychecks aren’t set up this way and you are at a place where you can afford to save for retirement, I want to encourage you to make it a priority. Even $40 a month is better than nothing, and if you learn how to invest for the greatest return on investment, you can make your money work for you for years to come.
If you don’t like the idea of a spreadsheet, there are also budgeting apps that can track your expenses, income, and upcoming drafts from your checking account. Here are some excellent options:
Choose a family financial ‘manager’
I tend to be more organized than my husband. (Honestly, that’s just a nice way of saying I’m way more controlling than he is!) I check the account almost daily, ensure that the bills are paid on time, negotiate bills, and research more affordable options. Choosing me to be the financial manager makes the most sense because I already manage these things anyway. We make financial decisions together, but choosing a family member to manage bills and budgeting has ensured that nothing falls through the cracks. This is especially important when living on one income, as there’s less wiggle room for financial mistakes.
Choose a financial manager that makes sense. Discuss financial goals often and ensure you and your partner are on the same page about financial goals.
Track your spending habits
As a single-income household, it’s incredibly important to track where your money is going. Years ago, we made a rule that if we were going to spend over $10, we had to check with the other person if we could afford a $10 purchase. Not because we couldn’t trust each other but because our finances were so tight that $10 could throw everything off. That amount has increased as our income increases, but we still check in before making purchases because we have goals to meet.
If you’ve budgeted $100 for utilities, but the bill is closer to $190, you need to know and adjust your budget accordingly. Budgeting apps are handy for this because they can alert you if you’re over budget, while a spreadsheet can’t. Whatever you choose to use, stay diligent and keep tracking your expenses. This is the only way to know where you’re money is going and how to make it work for you. You can also check your bank statements or credit card statements and see where your money is going.
Game-changing strategies that make living on one income simple
Now that you’ve created a budget, tracked your spending, and chosen a financial manager to keep your finances in check, it’s time to make some big changes and tighten up your spending. If you’re already debt-free, these tips may not apply to you, but if you have any type of debt, whether that’s high-interest credit card debt, student loans, a personal loan, or car payment, keep reading.
Pay off your debt fast
I can’t stress this enough, pay off your debt! It’s one of the best feelings ever to know you don’t owe anyone money. If you can do this before living on one income, even better! Sell stuff around your house that you don’t regularly use, or create a side hustle from that creative hobby you love so much, and get those debts paid off. I’m not going to tell you to never step foot in a restaurant or movie theater again because that’s incredibly unrealistic, and I don’t agree with that advice at all, but it’s okay to cut back on spending for a few months while you pay down debt. It’s worth it, I promise. The sense of relief created by paying off debt is awesome.
Ditch the unnecessary subscriptions
We ditched cable last year and saved around $100 a month. We have one streaming service that costs about $18 a month and we put the rest of that money towards other categories in our budget. It could have been really easy to justify signing up for multiple streaming services because we’d saved so much by ditching cable, but that’s not what we wanted. Instead, we watch old DVDs, play board games, or read books. Look over your budget and see if you have unnecessary subscriptions. If a subscription or gym membership isn’t something you use regularly, ditch it! But if you use it regularly, then that’s something to consider keeping right now.
Change your service provider
Loyalty programs don’t really exist anymore, and shopping around for the best deal is smart! Consider shopping around for cell phone providers, car insurance, homeowner’s insurance, internet providers, and any other monthly services you carry. There’s a good chance you could save money on at least one of them, and the hour it takes to research and chat with a rep is worth it.
Create a minimalist wardrobe
Not only will you cut back on the amount of laundry you’re doing, but creating a minimalist wardrobe is also cheaper. Get a few staple pieces for each season, 2-3 accessory pieces, and 2-3 pairs of shoes, and that’s really all you need. We did this for our children recently, and it’s given me so much peace knowing there’s less laundry I’m responsible for cleaning.
Find cheap or free entertainment
Why is a movie ticket nearly $15 now?! As a large family, going out isn’t financially feasible for us. Spending time together as a family is important, but not when it costs $150+ every time we try. Instead, we make dinner and head to the park, watch a movie on our projector in the backyard, or make homemade pizza and have a game night. Get creative with your sources of entertainment!
Stop viewing shopping as a hobby
Shopping is fun, sure, but not when you can’t afford to do so. I don’t know about you, but going to the store when I can’t afford to purchase what I want isn’t fun. So I don’t do that anymore. Find hobbies that are affordable and fun that don’t make you want to spend excessive money.
Unfollow any accounts on social media that don’t align with your goals
It’s easy to get sucked into the social media craze and feel like you need to keep up with everyone and everything they have. Don’t fall for it! Comparison is the thief of joy. Remember that old saying? It’s still true. Be proud of your home and your goals, and unfollow anyone who makes you feel like your home doesn’t measure up. Many of these influencers are paid to share links for products they are gifted. So, in addition to having multiple income streams compared to you living on one income, they often don’t pay for the products they’re promoting.
Get rid of the second car
I know this tip doesn’t apply to everyone, and that’s okay! We need 2 cars as I have young children at home and teenagers who don’t drive yet. If you can’t ditch the car, that’s okay, but if getting rid of an extra car, plus insurance and registration fees, is possible, this is an excellent way to decrease monthly expenses.
Eat at home
Much like outside entertainment, eating out has become insanely expensive. As a single-income family, it’s not a luxury we can indulge in right now, so we don’t. Learn how to make delicious meals at home, and find another activity for date night or family outings.
Meal plan
The only way we’ve been able to spend less money on groceries and stretch our budget has been to meal plan before shopping. We choose 5-7 dinners and eat those for 2 weeks before repeating the process the next time we shop. Aside from our mortgage payment, groceries are our largest expense, and planning meals in advance has been an incredible way to cut back on unnecessary purchases. Find 20-30 affordable meals you love, and rotate through them until you need to switch things up.
Compare prices as you shop
I like to compare prices between 2-3 local stores before grocery shopping to ensure I’m saving as much money as possible. It doesn’t take much time, and if I can save $15-$20, that’s less money I have to budget for. Additionally, check for use coupons and ask if your store offers price matching.
Bake from scratch
I started baking from scratch in 2022, and I have loved it! Learning how to make my own pasta, bread, pizza dough, and even yogurt has been so much fun. Plus, it’s saved us money and unnecessary ingredients often found in store-bought foods.
Make it yourself
If you can learn how to make something yourself instead of buying it, do it! Learn how to patch a hole in your clothes, start a garden, and make your own sourdough. These are excellent skills to learn, and they’ll save you money.
Create an emergency fund
This tip is non-negotiable. Unexpected expenses are bound to happen, no matter how good your luck is. A medical emergency could come up just like it did for our family and leave you without an income for an unforeseeable amount of time. If we didn’t have our emergency fund set up, I don’t know what would have happened to our home.
The amount you need to save will vary depending on your family size and expenses, but a good rule of thumb is to save at least six months’ worth of expenses in a high-yield savings account. I know this may seem difficult if you’re living paycheck to paycheck, but this should be high on your list of priorities if not the first step when creating your monthly budget. Even putting away $30-$40 monthly will help you reach your goal.
Save for large purchases
Instead of racking up credit card debt, save for large purchases like appliances or home upgrades. Living on one income can make these larger purchases more difficult, but avoiding debt is important. If you’re trying to earn cashback on credit card purchases, ensure you have the money in savings before putting a purchase on a credit card so you can pay it off right away and avoid high-interest debt.
Test run living on one income
If you’re considering becoming a stay-at-home parent, or maybe you’ve decided to step down from a high-stress position and are losing a second salary, try a test run first if you can. Act like a one-income family for a few months before giving up dual incomes and see if it’s manageable for your family. This isn’t always an option for everyone, but if you’re in a place where you can try it first, see if you can change your spending habits before giving up a second income. Additionally, the money you save while on your test run is a great way to pay down any existing debt.
Final thoughts
Living on one income has its difficulties, but with simple habit shifts, one-income families can learn how to thrive instead of just scraping by. Remember to focus on your financial goals, check in with your partner often, and ditch any habits that make reaching your goals too difficult. Whether you choose to embrace all the tips I’ve shared today or only a few, I hope you’re able to see that living on one income is possible with the right attitude!
What’s your favorite tip? Do you have any other tips I should add to the list? Let me know in the comments below!
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