Living on one income as a couple or family can sound scary if you’ve gotten used to a two-income household. But it’s entirely possible to make the transition.Whether you planned for it or were surprised by a loss of income, you can figure out how to make it work.
Moving your family to one income comes with possible benefits that can help you reach all kinds of financial or lifestyle goals. It might mean one parent can stay home to care for children and/or aging parents and the household. Maybe you and your partner will both continue working, but you’ll live on one income and save the other to support your goal of financial independence.
These are some tips that may help you to live comfortably and enjoy living on one income.
Set Savings Goals
If you have time to plan ahead for taking your family down to a single income, start with a solid savings goal. You can use this time to build an emergency fund if you don’t have one, so your family has a cushion. You can also set aside some savings to have extra money available for expenses while you transition your spending habits from two incomes to one.
Use our Savings Goal Calculator to estimate your timeline and determine how much you may have to save each month to reach your goal by saving in a high-yield savings account.
If you don’t have time to plan ahead, savings goals are still vital to your financial health on one income.
You may have to build an emergency fund more slowly if you transition to one income without one in place — just remember that any small amount helps, so figure out how much you can set aside, and do it consistently.
Once you’re living on one income, start your budget with savings goals in mind — even before you look at your spending. Prioritizing paying yourself first ensures you continue to work toward your future goals, even after your household income goes down.
Unless your family was earning a lavish income or you were living very frugally before, you’ll probably have to make some lifestyle adjustments once you start living on one income.
Start by looking at your most impactful expenses: housing, food and transportation. These make up a huge portion of most budgets, and you can’t just cut them out to save money. But you might be able to make changes to spend much less money in any of these categories. Consult with your family to determine:
- Can you (and do you want to) move into less expensive housing?
- Can you cook at home more often to save money on eating out or delivery?
- Can you shop at a cheaper grocery store or choose lower-priced items?
- Can you supplement your grocery budget by applying for SNAP assistance or using a local food bank?
- Can you live with just one car if one person isn’t working? (Or can you live with no cars if no one has to commute for work and you have reasonable access to public transportation?)
- Can you reduce how much gas you use and the wear and tear on vehicles by using your bike, walking, taking public transportation or carpooling to work and activities?
- Can you reduce how much you travel by negotiating remote work, moving kids to a different school or changing some of your family activities?
Once you’ve tackled your biggest costs, look at ways you can change your spending habits in other areas, like clothing and entertainment.
Find Creative Entertainment
Living on one income doesn’t have to mean cutting out all of the fun in your family’s life. Fewer resources might mean major changes, but you can still find ways to bring joy and excitement that cost a lot less money.
- Cut the costs of family vacations by driving instead of flying.
- Opt for free activities, like walks, hikes, bike rides, swimming and yard games to replace costly ones like museums, theme parks and movies.
- Keep an eye on local media for listings of free entertainment and activities, like shows and fairs. Look for the same in surrounding towns and states to plan low-cost weekend trips.
- Visit your local library to check out books, movies, video games and more; and keep an eye out for free activities and events for kids.
- Sign your family up for volunteer activities you can do together, and ask kids for input on causes they care about.
Whether you’re making a conscious choice to live on one income, or life has dealt you an unexpected setback, with a little determination and planning, you may make it work in your favor. Focus, plan, and get creative about finding solutions. If you want your money to do more work for you, consider opening a high-yield savings account.
Quontic Bank cannot and does not guarantee the information applicability or accuracy regarding your individual circumstances. This is not financial advice, nor should it constitute or be construed as instruction for any individual reader, or group of readers, to act or make a decision in any financial capacity. Seeking independent, professional consultation from a qualified and licensed expert is always the optimum avenue in making financial decisions.
Information and interactive calculators are made available to you as self-help tools for your independent use to help you determine how a loan, line of credit, or deposit account may affect your budget and are not intended to provide investment advice. The results offered are estimates and do not guarantee available loan terms, cost savings, tax benefits, etc. Quontic Bank cannot and does not guarantee their applicability or accuracy regarding your individual circumstances. We encourage you to seek personalized advice from qualified professionals regarding all personal finance issues.
Information as of October 6, 2022.